Friday Jan 24 at 1:17pm
Prior to beginning work in this discussion thread, pages 51 through 80 of “Understanding Corporate Annual Reports: A user’s guide” were reviewed. The topic of voluntary disclosures in corporate annual reports – more than meets the eye, and integrated performance report were focal points to the piece. Stanko & Zeller (2003) had an enlightening discourse related to operations and net sales. They examined ways in which growth rates should be viewed realistically viewed and analyzed. For instance, Home Depot and Lowe’s were shown to be growing at reasonable range of 20% annually in the article. However, when Enron came into the market the business was able to rise from $40M to $100M in just one year. Stanko & Zeller (2013) advise to be leery of numbers like these. They are a red flag and are indicative of an unreasonable growth rate above 150%. “If it looks too good to be true, it probably is” (Stanko & Zeller, 2013, p.76). It is important to not only be able to review an AOR with a critical mindset but also to create them ethically as well. While it can be second nature to want to generate an AOR with the best foot forward to gain investor and stockholder satisfaction, it should not be altered in a way that is misleading or unethical to them. These learnings regarding AOR in the short and long-term in the real world are extremely relevant. As we have seen in the history of Enron, executives sacked millions of dollars off the record all while showing inflated profits to shareholders (CNN Library, 2019, par. 3). Low-level workers also suffered great losses as they were urged to participate in stock for their retirement prior to the company going under and robbing them of hope for the future (CNN Library, 2019). Depending on performance in the TriCorp Simulation (2016), it may be important to disclose not only success but losses with honest aspects of outcome. In addition, there is opportunity to show room for improvement/momentum. The key takeaway is to be able to be a reflective analyst when reviewing AOR’s and to generate them with ethical behavior in mind.
Ashley Johnson
References
CNN Library. (2019, April 25). Enron Fast Facts. Retrieved January 24, 2020, from https://www.cnn.com/2013/07/02/us/enron-fast-facts/index.html
Stanko, B., & Zeller, T. L (2003).Understanding corporate annual reports: A user's guide. Hoboken, N.J.: John Wiley & Sons.
TriCorp Simulation (2016). Growing your business - A management simulation. Retrieved from https://ashford.trisimulation.com/Simulation
Yesterday Jan 26 at 3:19pm
The annual operating review gives businesses the opportunity to review (at a high level) their progress throughout the year. This also gives leadership the high-level overview they need to make operating decisions for the future. This review also gives the business the opportunity to update their SWOT analysis and business strategy, where needed.
As market demand continues to grow, HISCO must invest heavily into production and maintain capacity for the increased demand. We saw in Q3 that Redex lost 2.15k in sales due, likely due to lack of capacity to keep up with their market demand. If HISCO can continue to up production capacity, they will likely gain some of the customers that Redek lost. As it stands after Q3, HISCO has 31.29% unit market share, and they are firmly in second place overall, amongst three other competitors.
As time continues, my major concern is going to be ability to keep pace with quality engineering, research and development, and ability to keep up with market demand (as mentioned previously). In any new industry, market demand is going to increase at a rapid pace, and companies must be ready to meet that demand if they wish to succeed. Also, research and development investments, while low this year, should be upped significantly next year to keep ahead of Redek (the current market leader).
The things HISCO did will this year were to enter the European marketplace first. This set HISCO up to be the market leader in Europe for the foreseeable future. Another thing we did well was to invest $100,000 in the solar panels for our building. This not only set us up to save on our lease in the long-term, but it also helped solidify our position as a good global citizen, along with our recyclable paper upgrades made in Q1.
Bujaki, M., & McConomy, B. (2010, May).Voluntary disclosures in corporate annual reports — More than meets the eye.CMA Management, 84(3), 14-16.
Stanko, B., & Zeller, T. L (2003).Understanding corporate annual reports: A user's guide. Hoboken, N.J.: John Wiley & Sons, Inc. eBook., Database: eBook Collection (EBSCOhost).