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"You are required to choose two multinational comp...

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"You are required to choose two multinational companies based in two different countries and access their most recent annual reports. Choose companies that place copies of their annual reports on their website. The annual reports are normally located within the "Investor" or "Investor Relations" section of their website. Do not choose companies from the banking or services industry. You are required to review the annual reports of these companies and answer each of the following questions: 6 If you were to invest in only one of these companies, which one would you choose, relying solely on the information provided in the financial statements and the management discussion section of the annual report? Justify your answer. 7 Review the management discussion section of the annual reports and summarise the general content of each. Do you find such information important for investors' decision? 8 Briefly, review the footnotes to the financial statements and address each of the following questions: 8-1 List the major accounting policies for each of the two companies and cite any differences and or similarities. Do you think that such differences may impact economic performance of both? For example: capitalising versus expensing of expenditures. 8-2 Are the financial statements prepared in accordance with international accounting standards? If not, which standard setting body's rules and standards do they follow? 8-3 Do the companies provide financial information about the industry and geographic segments in which they operate? If so, summarise the information provided. Do you consider the disclosed segmental information useful and why? What other segmental information would you like each company to disclose and why? 8-4 Do these companies provide information about their contingent liabilities? Do you believe that this information should be reported in the body of the financial statements or do you believe that it is sufficient to have this information disclosed in the footnotes? Explain. 8-5 Do the footnote disclosures provide any information about the companies' executive and management compensation packages? How about the fees of the auditor? Explain. If not, would you like to see this information provided and why? 8-6 Do these companies provide any information about their share prices and dividends? If so, answer the following questions: 8-6-1 What is the number of their outstanding shares? 8-6-2 What is the total market value of each company at year-end? 8-6-3 Calculate the ratio of price per share/earnings per share at year-end. 8-6-4 Calculate the ratio of price per share/book value of equity per share at year-end. 8-6-5 How do you interpret the two ratios calculated above?"

 

Paper#2822 | Written in 18-Jul-2015

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