2-Asics_solution

2-Asics_solution - ASICS Corp.-Understanding Financial...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ASICS Corp.—Understanding Financial Statements a. ASICS manufactures and sells sporting goods and equipment. The financial statements themselves make no mention of the company’s business, but Note 14 –Segment Information—alludes to it. In the annual report, the company provides more data on lines of business. The segment data indicate that the vast majority of the company’s sales and assets are in Japan, followed by Europe, then the United States. b. The four commonly prepared financial statements are the balance sheet, the income statement, the cash flow statement and the statement of owners’ equity. ASICS uses names that describe the statements: Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Cash Flows, and the Consolidated Statements of Stockholders’ Equity. Also, in the United States, beginning in 1998, companies are required to report and display comprehensive income. Most US companies report comprehensive income as part of one of the four commonly prepared financial statements (for example, in the income statement or statement of owners’ equity), but some report comprehensive income in a separate statement, the Consolidated Statement of Comprehensive Income. As a Japanese company, ASICS follows Japanese GAAP which does not require a statement of comprehensive income. “Consolidated” refers to the fact that ASICS’s subsidiary companies are included in the financial statements. That is, all the companies owned by ASICS are part of a consolidated group for which one set of financial reports is prepared. c. In Japan, public companies like ASICS file annual and semiannual financial statements with their regulators. For fiscal years beginning after March 31, 2004, Japanese firms are required to file quarterly reports. Public companies in the United States are regulated by the Securities and Exchange Commission (SEC). SEC registrants need to file quarterly financial statements. These are made publicly available at www.sec.gov via the SEC’s EDGAR system (EDGAR stands for electronic data gathering, analysis, and retrieval). d. There are potentially many users of these financial statements, including: current and potential shareowners, current and potential debt investors, competitors, suppliers, customers, government agencies such as the tax authorities and the SEC, labor unions, management, employees who contribute to the ASICS pension fund, and accounting students such as yourself. e. Shin Nihon & Co., a public accounting firm audits ASICS. ASICS received an unqualified audit opinion in 2002. An unqualified opinion is the best report a company can receive from its auditors. It means that the auditors have performed their tests and are reasonably sure that the financial statements are free from material misstatement. Note that it does not mean that the auditors guarantee that the financial statements are free from all misstatements or that the company is a good investment. They are merely
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

2-Asics_solution - ASICS Corp.-Understanding Financial...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online