This document provides instructions for an annual report project on analyzing a company. Students are asked to analyze Research in Motion and include: an introduction with company details; industry situation and plans; accounting policies; an interesting topic about the company; a personal evaluation; and recap. They must also complete a financial analysis including common-size statements, ratio analysis covering liquidity, profitability, and market ratios. The analysis should discuss trends and make recommendations to promote efficiency. The project aims to help students learn financial analysis and reporting in a business context.

1. ANNUAL REPORT PROJECT
Curricular Issues:
This course needs to articulate (transfer) to a four-year college
or university. For that reason we work hard to meet university
requirements in our courses. Courses in the 200 level (BUS221)
have writing across the curriculum requirements. Therefore we
do require a paper in this course. I will do my best to make it
as easy for you as possible. Also the universities require our
business and accounting courses take a hard look at interpreting
financial statements. For this reason I have assigned problems
or exercises throughout the semester that deal with this. In
Chapter 13 you will learn all about Financial Statement
Analysis and the homework for that chapter will be to prepare a
financial analysis on Research in Motion. It is important to
note that at the very end of each chapter, and before the
Demonstration Problem for the chapter, you will find a Decision
Analysis section. This will help you a great deal in
understanding how to complete your Annual Report’s financial
analysis.
I strongly advise that you print out the files and information
found in the Annual Report section under Assignments in your
Angel Course. Then, as you work through the individual
chapters you can complete the activities in the final project
rather than waiting until the end of the course. The information
will be more meaningful then. There is no reason to hold off on
starting this project.
Appendix A, beginning on page A-1 in the back of the text,
contains financial statements for four companies: Research in
Motion, Apple, Palm, and Nokia. This semester you are
required to report on Research in Motion. I choose this because
the text has included an entire copy of their Financial Report

2. rather than just the financial statements as the other three
companies have. You can start the report now and also the
financial statement ratio analysis. The Common-size
Comparative financial statement analysis will come at the end
of the semester as a Chapter 13 assignment. As we work
through each chapter and learn to calculate and analyze the
ratios that particular chapter teaches you can complete the ratio
calculations for Research in Motion. The work sheet for this
can be found in this Annual Report folder. I am giving you all
the necessary tools for the final project early on so there is no
reason to procrastinate.
As I mentioned in the Announcement Section of the course, you
will find a Decision Analysis section at the end of each chapter
just before the demonstration problem. Here you will find how
to calculate the ratios and a discussion of the ratios that pertain
to that chapter (how to analyze the ratio.) If you complete this
ratio analysis as you move throughout the text rather than
waiting for the end of the course, it will have more meaning to
you.
For the report itself you will need to research three current
periodicals on your company besides the company’s annual
report found here in the text. “Current” in business is
considered three years. However, it depends on the subject of
your paper. For example, it would be reasonable to go back
further if your topic was the company’s growth over “x” amount
of years, how the company got started, etc. You will use this
information for bullet 4 below.
A business report is written in very concise language. It helps
to have paragraph headings so the information can be easily
found by the reader. I recommend you use the bulleted sections
below for your headings and bullet the items when possible for
an easier read (especially in section I – Introduction and
Summary.)
Information to be included in your report: For the most part,

3. most of this information should be able to be found in the
annual report, business periodicals, or on the company’s
website.
· Introduction and Summary – Identify your company
Name and location of home office
CEO
Last Fiscal Year
Principle Products
Main geographic area
Name of independent auditors
Most recent price of company stock and dividend per share
· Industry Situation and Company Plans

4. Describe the industry and its outlook
Summarize the company’s plans
· Accounting Policies
What are the significant accounting policies relating to revenue
recognition
Cash, short-term investments, merchandise inventory, and
property/equipment.
· Something interesting you researched about the company.
(The paragraph heading for this would depend on the interesting
topic you are reporting on.) The report should be on something
interesting you researched about the company such as its
products, how it got started and grew, personnel aspects about

5. the company, community involvement, international holdings,
etc. and not the financial status of the company. You will be
reporting on that in the financial analysis that you will be
doing.
· Personal evaluation of your findings
· Recap.
Paper format:
1. The paper needs to be 1500 words which equates to 6 pages
double spaced with a two inch top margin on the first page and
one inch top margins on the subsequent pages. There should be
one inch side and bottom margins on all pages. This should not
be difficult if you include all the required information found
above.
2. The paper should contain a cover page (not included in the
required 6 pages.). This would be a standard report cover page
including the name of the paper, your name, the class the paper
is prepared for, and date
3. Use an endnote page to reference periodicals. I won’t require
a bibliography or formal referencing throughout the report.
4. It goes without saying the report should be concise, well
organized, and free of spelling and grammatical errors. (Unlike
a paper written for an English course, business reports eliminate
unnecessary words.) They use shorter sentence structures and
do not have run-on sentences. Keep it simple but specific.
Business people don’t have time to read lengthy reports with a
lot of adverbs and adjectives to “spice” it up.
Using your company to do chapter 13 homework at the end of
the semester
This is not included in the required 6 pages of the report. The
financial statement analysis is a separate part of the report.
(Refer to grading sheet included in the annual report folder.) So
that I don’t have to calculate ratios, common size, and trend

6. analysis’ for a lot of different time periods I ask that you use
the financial statements for Research in Motion that are found
in Appendix A in the text. This is an exercise focusing on the
“how to” not using the most up-to-date financial information.
Prepare a common-size/comparative Balance Sheet and a
Comparative Income Statement. The format for them can be
found in Chapter 13 and the financial statements for Research in
Motion can be found in Appendix A. Complete a brief
paragraph for each statement and discuss pertinent information
you observed regarding the accounts.
Prepare a Ratio Analysis that includes:
Liquidity Ratios
Working capital
Current ratio
Acid test ratio if possible
Receivable turnover
Average days’ sales uncollected

7. Inventory turnover
Average days inventory on hand
Profitability ratios
Profit margin
Asset turnover
Return on assets
Debt to equity
Return on equity
Market ratios
Price earnings ratio

8. Dividend yield
These ratios and their descriptions can be found in the related
chapters of your text and inside the back cover of the text.
Prepare a brief explanation (three paragraphs one covering each
group of ratios: Liquidity, Profitability, and Market) about the
financial situation of the company, the performance of stock
over this semester, and your recommendations as to the
feasibility of purchasing the stock. Also make a
recommendation as to what you think the company needs to do
to promote better efficiency and effectiveness or maintain its
current performance level.
For your reference, you might want to print out the grading
sheet I will use to grade the final. Make sure that everything on
the grading sheet is covered when you turn in the paper and the
analysis.
Enjoy!
Annual Report Project Grading Sheet:
Students name:
Business people like to find information in a report easily.
Business reports typically organize the information in a
structured format using paragraph headings, topic headings,
bullets, etc. I recommend that you use the individual grading
sections included here as paragraph headings or topic headings
for your report and bullet the information for example in the
Introduction Summary or other areas where it makes sense.
Possible Pts

9. Pts Awarded
Introduction Summary – Identify your company
10 pts
_____
Name and location of home office
CEO
Last Fiscal Year
Principle Products
Main geographic area
Name If independent auditors
Most recent price of company stock and Dividend per share
Industry Situation and Company Plans

10. 10 pts
_____
Describe the industry and its outlook
Summarize the company’s plans
Accounting Policies
10 pts
_____
What are the significant accounting policies relating to revenue
recognition
Cash, short-term investments, merchandise inventoried, and
property
and equipment.
Research something interesting to research about the company.
100 pts
_____
Conclusion/Recap

11. 20 pts
_____
References cited
10 pts
_____
Paper format
15 pts
_____

12. Financial Analysis (Turn in separate from the report.)
100 pts
_____
This is the homework for Chapter 13 Assignment
Total Points
275 Pts
_____
Research in Motion Limited
Common-Size Comparative Income Statements
For Years 2008, 2009, 2010
February 27, 2010
February 28, 2009
March 1, 2008

16. Analysis:

18. Research in Motion Limited
Common-Size Comparative Balance Sheets
For the years 2008, 2009, 2010
2010
2009
2008

21. Analysis:
Your name:

22. Company Name:
Comparative Ratio Analysis
These are the ratios I want you to do and the format I want them
completed in. If you have problems using this form please feel
free to create your own. Remember to refer to the Decision
Analysis in each chapter to help you complete the analysis
portion of the sheet. Also, remember the accounts that are
included in each ratio and address how they may have changed
from year to year especially if the ratio has changed
substantially. Then make recommendations as to how managers
might address any issues they might find.
This ratio analysis is grouped into three sections: Liquidity
Ratios, Profitability Ratios, and Market Ratios. Unlike the
assignments in the individual chapters, for this assignment you
will analyze the company from these three perspectives taking
into account all the ratios included in that each particular group.
In the real world you would compare these ratios to a market
standard found in the RMA or another publication however,
access to these on-line cost money. In the classroom we used
the RMA from our campus libraries. So the best we can do
here is compare one year to the next.
This is a sophomore level college class and the assignment is
worth 100 Points so you will be expected to put some effort into
this analysis. The Financial Statement Analysis that goes with
this assignment can be found in another file called Stmt
Analysis File. Together they will be worth 100 Points. You
might want to complete that file first as it may provide some
insight into what is going in the accounts for this ratio analysis.
Year?
Year ?

23. Liquidity Ratios:
a. Working Capital:
b. Current ratio
=
=
c. Acid-test ratio
=
=
d. Accounts receivable turnover
=
e. Inventory turnover

24. =
=
f. Days’ sales in inventory
=
=
g. Days' sales uncollected
=
x

25. =
Short-term credit risk analysis:
Comparative Ratio Analysis
Company Name:
Part 2
Year ??
Year??
Profitability Ratios:
a. Profit margin ratio
=
b. Total asset turnover
=
=

26. c. Return on total assets
=
=
d. Debt to Equity
_________________ =
_________________ =
e. Return on common stockholders' equity
=
=
Profitability Ratios Analysis:

27. Market Ratios:
a. Price-earnings ratio
=
=
b. Dividend yield
=
=
Market Ratios Analysis
Recap of the company’s financial position and recommendations
you may have for the future.

28. =
�
=