Financial Accounting Assignment
This project involves an in-depth analysis of a publicly traded company, and a comparison to its peers in the industry. The two companies we are comparing are: Cisco and Alcatel-Lucent. Use the 10k 2015 annual report to answer these questions: each question must be 3-4 sentences long.

Company Background

A. What is the ticker symbol of your company? Identify the stock exchange(s) where your company stock trades.

B. Read the auditor’s report included in the annual report of the company and explain its purpose. Identify the name of the auditing firm.

C. Explain the major operations of your company. What products does it sell and/or services does it render? Identify the major competitors of the company.

D. Using the Wall Street Journal or Internet to record the closing price on Friday,

1. How does current year’s sales revenues and net income (i.e., earnings) compare with that in previous years? Compute the annual growth rate for the last five years for both sales revenue and net income. [For example, if revenues in Year 1 and 2 are 100 and 125 respectively, the growth rate from Year 1 to Year 2 is 25%]. What earnings trend do you observe and what factors may be causing this trend?

2. Calculate the gross margin percentage (Gross Profit divided by Net Sales) for each period presented in the income statement. What trend in gross margin do you observe and what factors may be causing this trend?

3. Where are the resources of your company employed? Figure this out by calculating a percentage of the total assets for each asset displayed in the balance sheet. The total should equal 100%. What are the three largest individual assets as a percentage of the total? Why do you think the company needs to have these assets as part of their business?

Profitability:

What is your assessment of the profitability of your firm in the most recent year? How does your firm’s profitability compare with that of the competitor?
Compare the cash flows from operating activities for your firm with the net income for the most recent year. What factors have contributed to the difference between these two numbers?
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