Explain the accounting standards and the conceptual framework used when accounting for bonds and other long-term debt instruments.

Select a publicly traded company using the U.S. Securities and Exchange Commission (SEC) EDGAR System (http://sec.gov/edgar/searchedgar/companysearch.html) and submit to the instructor for approval. Please note that each student must research a different company. Once the company selection has been approved by the instructor, obtain the Annual Report (Form 10K) and Proxy Statement (Form DEF 14A) of the company for the immediate past fiscal year. Review these documents in addition to Earnings Releases and other financial information available on the company’s Investor Relations Web site to evaluate the following items.

Financial Reporting

  • Explain the accounting standards and the conceptual framework used when accounting for bonds and other long-term debt instruments. Describe how the accounting process addresses the time value of money and explain disclosures required in the audited financial statements relative to long-term debt instruments.
  • Analyze the company’s short-term and long-term financing strategies, and evaluate risks, limitations, and advantages of electronic commerce applications.
  • Describe capital budgeting tools such as net present value, internal rate of return, payback method, discounted payback and discounted annual cash flows, and explain the impact of the use of these tools on the company’s audited financial statements.
  • Explain the accounting standards and conceptual framework used when accounting for inventory. Describe factors affecting a company’s choice of inventory method and discuss disclosures required in the audited financial statements relative to inventory.

Business Formation and Capitalization

  • Describe the company’s capital structure including common and preferred stock ownership, treasury shares, and additional paid in capital.
  • Discuss the accounting process used to record issuance of stock, explain the differences between intrinsic value and fair value methods, and distinguish between a complex and simple capital structure.
  • Explain the purpose and computation of EPS presented in the audited financial statements.

Economic Conditions

  • Discuss the economic conditions affecting the company’s business and operating results. Describe circumstances giving rise to inflation, deflation, expansion, and recession and estimate their effects on an entity’s short-term and long-term financial position and business operations.
  • Differentiate between various economic measures such as the Consumer Price Index, Gross Domestic Product, Gross National Product and the effect of Federal Reserve Board actions on the national economy. Discuss the relevance of these measures to the company’s business and operating results.

Prepare a 10-12 page research paper (excluding title page, abstract, references page, and appendices containing financial analysis) in APA format that presents the findings of your analysis of the company’s SEC filings. Your paper should also discuss the following:

  • Differentiate the general characteristics, advantages and disadvantages of various business forms such as sole proprietorship, partnership (general, limited, and limited liability), joint venture, limited liability company, and corporation (Subchapter C, Subchapter S).
  • Discuss risks, limitations, and advantages of electronic commerce applications.
  • Explain the role IT plays in financial reporting systems and transaction processing in an electronic environment.

In addition to the SEC Forms, a minimum of five (5) peer-reviewed academic or professional references must be used in the paper

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