Project Overview
The objective of the project is for you to improve your understanding of accounting concepts and become familiar with the contents of a company’s annual report, Form 10-K filing with the Securities and Exchange Commission (which is also refe
ed to as an annual report) and a proxy statement for Cisco Systems, Inc. which is a publicly-held company. This project involves your preparing written answers to the questions below based on the information provided in these documents. You will do this project on an individual basis and submit your written report to the Assignment Tool Drop Box in Blackboard by Sunday, May 12, at 10 p.m.
Grade
The project is worth 25% of your course grade.
Selected Company: Cisco Systems, Inc.
Obtain a copy of the SEC Form 10-K XXXXXXXXXXannual report and the Definitive Proxy Statement Form DEF 14A XXXXXXXXXXfiled with the SEC.
To access these documents, go to https:
investor.cisco.com/financial-information/sec-filings/default.aspx Select the 10-K XXXXXXXXXXand proxy statement definitive (DEF 14A dated 10/24/18). I recommend downloading the files and not printing, as thee documents are very lengthy.
Report
Your report is expected to have a professional appearance as would be expected in most business settings. Presentation is important. The first page should be a memo to me with three sections: 1) Purpose of this assignment 2) Sources used 3) Conclusion – What is your opinion of the company; Would you invest in this company? Following the memo answer the questions on pages 2 and three of these instructions. State the question followed by your answer. To facilitate the instructor’s review and your class discussion, you must cross-reference your answers to the sources used including the document name and the page number. For example
Section I. Background information
a. Name of the company: Cisco Systems Inc. (See SEC Form 10-K, cover page).
You may use other sources, however, be sure to cite those sources in your answer. Also, you may want to compare your company to its prior year(s) and/or its competitor.
Page 2 of 3
Questions
Include in your report the answers to the questions listed below. Also, remember to include the source of your answer, by indicating the document (SEC Form 10-K, or Proxy Statement) and page number. Please be specific and concise.
I. Background information
1. Name of the company
1. Fiscal year covered by the annual report
1. Stock exchange where shares are traded and stock ticker symbol
1. State of incorporation
1. Describe the company’s business(es), e.g., types of products manufactured.
II. Management and Audit report
1. Who are the company’s auditors?
1. What opinion did the auditors issue?
1. Did the auditors examine all the evidence supporting the amounts and disclosures in all of the financial statements? Explain.
1. What is the auditor’s responsibility for the financial statements?
1. What is management’s responsibility for the financial statements?
1. Under the Sa
anes-Oxley Act of 2002, reports on internal control are required. Did the company’s management acknowledge its responsibility for establishing and maintaining adequate internal control over financial reporting? What is the auditor’s opinion on the effectiveness of the company’s internal controls?
1. What was their internal control system designed to do?
1. In accordance with what standards did the auditors conduct the audit?
III. Profitability
1. What is the net income for the year covered by the report? How does net income compare to previous years? Why did net income increase or decrease?
1. When is revenue recognized?
1. What effective income tax rate is the company experiencing?
1. What are the extraordinary gains or losses if any? Explain.
IV. Assets
1. What is the company’s largest cu
ent asset?
1. What items are classified as cash equivalents?
1. What are restricted assets? How much restricted assets reported in the fiscal year 2017?
1. What was the balance at year end for Allowance for Doubtful Accounts for accounts receivables?
1. What categories of inventory does the company report on its balance sheet? What inventory accounting method(s) does the company utilize?
1. What are the company’s depreciable assets? What method(s) of depreciation does the company use?
1. What kinds of intangible assets does the company have?
1. How much goodwill is on the balance sheet and how is it defined?
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V. Liabilities
1. What is the company’s major liability?
1. How much does the company owe within the next fiscal year?
1. How much long-term debt is due and payable? How much of the long-term debt is due within the next fiscal year?
VI. Stockholders’ equity
1. What are the different classes of stock issued by the company?
1. How many shares of common stock were issued? What is the par value of the stock?
1. What were the number of shares and cost of the treasury stock held by the company at year-end?
1. Were cash dividends paid? When? Who makes these decisions?
1. For the cu
ent period, what does the Statement of Stockholders’ Equity tell you about Retained Earnings and Treasury Stock?
VII. Earnings per share
1. What is the amount of basic earnings per share (EPS) being reported?
1. Have EPS increased or decreased since the prior year? By how much.
VIII. Business segments
1. How many business segments does the company have?
1. If applicable, what are the revenues for the largest business segment?
1. If applicable, what is the income of the smallest segment?
IX. Cash flows
1. How much cash was provided by operating activities?
1. What is the major investing activity occu
ed during the period?
1. What is the major financing activity occu
ed during the period?
1. What was the net change in cash during the period?
X. Proxy statement only
1. Briefly describe the issues that the stockholders voted on at the annual meeting of the shareholders.
1. What are the standing committees of the Board of Directors?
1. How often are Directors elected and what is their term of office?
1. What were the audit fees charged by the outside audit firm? What were the other non-audit fees?
1. What was the total compensation of the highest paid executive? What was included in the compensation?