For Part 4 -- please useBooz Allen Hamilton Holding Corporation
buad5107-m3-ccs-4 BUAD 5107: Module 3 Module 3: Module Submission (60 points) Introduction Form 10-K is an annual report that publicly traded companies with more than $10 million in assets and 500 shareholders are required to file with the U.S. Securities and Exchange Commission. This sophisticated report is available to the public through the Internet. Those who are new to accounting might be surprised to discover that the scope of the 10-K includes much more than financial statements. For example, the 10-K includes information related to the , , , , compensation. Many databases include information from the 10-K for purposes of analyzing industries and segments of the economy. This Module Submission has multiple objectives: you will become acquainted with important sources of information such as Form 10-K; you will apply the analytical approach required when probing financial disclosures; and the particular focus of the Submission provides a deeper understanding of the topics of inventory and fixed assets that are included in this module. (Note: Career coaches often recommend that MBAs interviewing with a publicly traded company scan 10-K in preparation for the interview.) Farmer Brothers Company was selected for this Submission because their business model is not complex and their success in business depends in part upon inventory management and the effective use of fixed assets. Farmer Brothers Company is publicly traded, and their fiscal year ends on June 30th. Part 1, 2 and 3 of this Submission are focused on researching 10-K disclosures to answer specific questions. Part 4 of this Submission is open ended so that you can focus on a 10-K that aligns with your interests. BUAD 5107: Module 3 Part 1 (30 points) Access the 10-K report filed on September 11, 2019, for the fiscal year ended June 30, 2019. There are many ways to access a 10-K report. One way is through the website for the Securities E C ( . ). S FILINGS pull-down menu select C F S . W F B . Y be taken to a page detailing all the filings; type 10-K F T page, and the filings will be resorted so that the 10-K filings are at the head of the listing. Open D 2019-09-11 and then select 10-K. Scan the 10-K filing submitted by Farmer Brothers for the fiscal year ended June 30, 2019, to become familiar with the contents and the way in which the 10-K is organized. Then respond to the following questions. Your responses should be concise. 1. (6 points) What does Farmer Brothers do? 2. (12 points) On pages 3 and 4 of the 10-K for their fiscal year ended June 30, 2019, Farmer B Reduce Costs and Compete More Effectively. ( : DSD ) F B big market. If they fail to control costs, they will fail as an organization. For a company like Farmer B , , . 2.A Based on the disclosures provided in the section Reduce Costs and Compete More Effectively, to utilize fixed costs more effectively. 2.B Based on the disclosures provided in the section Reduce Costs and Compete More Effectively, manage variable costs more efficiently. 3. (12 points) With regards to Property, Plant, and Equipment: 3.A What method(s) of depreciation did Farmer Brothers use in their 10-K filings? BUAD 5107: Module 3 3.B What useful lives did they assign to their depreciable assets? 3.C F B . E . Part 2 (12 points) F , F B 10-K filing for the fiscal year ended June 30, 2015. This 10-K was filed on September 14, 2015 (2015-09-14). During the fiscal year ended June 30, 2015, Farmer Brothers used the LIFO method of accounting for inventory. On page 26 of the 10-K filed for the 2015 fiscal year, the company : A , 4.9 LIFO quantities in cost of goods sold in the fiscal year ended June 30, 2015, which reduced net loss J 30, 2015 $4.9 . 1. Precisely explain the meaning of the sentence quoted above. In other words, what information is being conveyed by this sentence? 2. Is $4.9 million a significant amount in relation to the net income reported by Farmer Brothers for the fiscal year ended June 30, 2015? Explain. Part 3 (8 points) F , F B 10-K filing for the fiscal year ended June 30, 2018. This 10-K was filed on September 13, 2018 (2018-09-13). During the fiscal year ended June 30, 2018, Farmer Brothers changed their method of inventory accounting from LIFO to FIFO. In Note 3, on pages 79 and 80 of the 10-K, the Company describes the impact of their decision to change their method of accounting for inventory. While Generally Accepted Principles of Accounting (GAAP) allow a company to change accounting methods, the company must satisfy certain carefully stipulated disclosure requirements. If a company changes from LIFO to FIFO as Farmer Brothers did, the company must restate financial statements from all previous years included in their 10-K to reflect the new FIFO method of accounting so that comparisons from year-to-year are consistent and not affected by an underlying change in the choice of the method of accounting. In the case of a change in inventory accounting from LIFO to FIFO, the company must increase (or decrease) the carrying value of the inventory account to reflect their new method of accounting and they must also make a corresponding adjustment to the opening balance of retained earnings. BUAD 5107: Module 3 1. For the fiscal year ended JUNE 30, 2017, by how much did the dollar value of inventory previously reported on June 30, 2017 under the LIFO method change as a result of the C FIFO ? 2. Did the change result in an increase or a decrease in the book value of the inventory reported as of June 30, 2017? Part 4 (10 points) Select a company that filed a 10-K and consult their most recent 10-K filing. If you work for a publicly traded company, you may wish to select this company. Or, you may wish to select a competitor, or a major supplier, or a company in which you might invest. The choice is yours. 1. Why did you select this company? 2. Briefly (150 words or less) discuss one fact related to either inventory accounting or plant and intangible asset accounting for the company you selected. 3. B (150 ) 10-K that you believe has significance to investors and/or creditors who are stakeholders in this company.