Annual Report Analysis

1: Annual Report Analysis ,Overview A critical financial accounting skill is the ability to read, analyze, and make actionable decisions from any financial statement. Business leaders gain valuable information from the annual reports of direct competitors, companies that operate in similar fields, and companies in which they are considering an investment or partnership. Instructions You are the CFO of a leading investment bank searching for a secure digital workplace platform for communications among employees. Your CEO has narrowed the field down to two infrastructure firms and is requesting your analysis and guidance. She has asked you to do a financial review of recent results from Citrix Systems, Inc. (NASDAQ: CTXS) and Blackberry, Ltd. (NYSE: BB). You have decided to organize your work into TWO components: Part A: Financial Analysis Snapshot of key data from the annual reports Part B: Executive Memo and brief Video Presentation of your analysis Part A: Financial Analysis Snapshot • All work is to be completed and submitted in the attached Excel template. • Go to the Investor Relations section of each company’s website and download their annual reports. You may need to download more than one report to get all required historical data. • Use the Annual Reports/10K to populate the Excel template. o Some entries simply require finding the respective line item amounts, while others will require calculations (these are indicated in in template). o Note that some historical data and ratios have already been provided in the template. JWI 530: Financial Management I Assignment 1 © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course guide is subject to change based on the needs of the class. JWI 530 – Assignment 1 (1222) Page 2 of 5 Part B: Executive Memo and Video Presentation Present a synopsis of your analysis in an executive memo you would feel comfortable turning in to your CEO or to Jack. You may organize the memo as you see fit, but it must follow the principles of good business communication. To support your executive memo, record a brief video presentation highlighting the key points of your findings. For your executive memo, answer the following questions: 1. Profitability/Net Income Margins • What are the after-tax net income margins (i.e., net profit margins) for both companies? • How do they compare? • Who achieves the higher net income margin? Why? Tip: Analyze the major cost structure line items in the income statement (COGS, SG&A, interest, other, and taxes) as percentages of net sales, so you can identify reasons for better net income margins. Identify and comment on the differences. You may not know why a particular cost item like COGS is higher or lower, and that’s okay. Your CEO only wants to know which cost-structure items are higher or lower for each company. 2. Accounts Receivable Management