You should do additional research along with analyzing the 10k.
• The whole idea behind this is to show what you have learned in class – so show off a little!
• I would like you to be an external user of the financial statements
o Investor who runs a mutual fund
o Financial analysist
• State your position up front –
o I am an investor. I currently own 500,000 shares. I am trying to decide if I should hold, sell, buy?
o I am a lender – should I lend?
• Use the tools that we’ve discussed in class and you’ve read in the text to establish your conclusions. Analyze the financial and non-financial information.
• Use ratios, interpret them and use them to support your conclusion. You must show your calculations and explain why the ratio is relevant. Only use the ration calculation that we have gone over – do not use a different version of the ratios.
• You will not be graded on the quantity of ratios that are used. You will be graded on the ratios you use and how you use them. In other words, do not give me 4 pages of ratios and the calculations and expect to get extra credit. I would rather you use a few ratios to support your conclusions than to just through meaningless rations out there. You will be graded on how you interpret them and if they support your conclusions. Do not include a ratio that is not used to arrive at your conclusions. We will discuss this topic further in class.
• Analyze the financial statements, read the notes, read the entire 10k. Comment on accounting issues that you note and the impact on your analysis.
• Obtain non-financial information as you see fit. Visit a few stores. Are they inviting? Clean? Efficient? What about competition? Where else do you see Apple products? What other Apple placement do you see and where?
• Your paper can be as long or short as you believe is necessary. I would expect between 2-5 pages, plus calculations. That is purely a guideline. Do not be fooled by the short length. This is going to require some work to earn any extra credit. Just reading and understanding the 10K and annual report is going to be an undertaking. Your job will be to succinctly state your position.
• It should demonstrate that you have an understanding of the background of Apple, its business operations and activities, its strategy, the executive team, some historical perspective and some future thoughts that you are able to obtain. This information should be used to support your decisions.
• Remember your audience when you are writing. If you are an investor, then you are writing to your team supporting your conclusions. Grammar must be correct. Treat this as a business matter – as if you are writing to your boss or a client – not like you are talking to your friends. You are going to be graded on it – the same way you would if you were at your job. In other words, both substance and the explanation to support the substance are important. This is very important.