- Assess your company’s utilization of long-term assets.
- Comment on your company’s asset-replacement policy
- How is your company’s asset-replacement policy impacting its return on assets ratio?
- Compare your company’s asset utilization ratio with that of its two competitors.
- What method of depreciation does your company use?
- What depreciation method do your company’s two competitors use?
- Disclosure of investments and intangibles.
- Review the financial statements for your company to determine if they disclose any of the following:
- Trading securities
- Available-for-sale securities
iii. Held-to-maturity securities
- Investments accounted for by the equity method
- Perform a similar analysis for your two competitor companies.
- Evaluate the use of debt.
- Calculate the following ratios:
- Long-term debt-to-assets ratio
- Interest coverage ratio
iii. Debt service coverage ratio
- Calculate the same ratios for your competitor companies and comment on your company’s relative solvency and use of leverage
- Review Item 7a in your company’s and its two competitors’ 10-K reports and summarize the companies’ disclosure of information on market risk.
- Comment on your company’s comparative use of derivatives.
- Analyze income tax expense and income taxes payable.
- Analyze your company’s provision for income taxes and income taxes payable including:
- The amount of income taxes that would have been paid at the statutory rate and the amount actually paid
- Changes in the deferred tax asset and liability accounts
iii. Changes (if any) in the amounts of income tax carrybacks and carryforwards
- Conduct a similar analysis for your two competitor companies and discuss any differences you find.
- Use of leases
- Review the financial statements of your company and its two competitors to determine if they are using leases as a part of their financing activities strategy.
- Contrast your company’s leasing strategy with those of its competitors.