Week 3 Appendix E (Online text) - THE ANNUAL REPORT...

Week 3 Appendix E (Online text)
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Unformatted text preview: THE ANNUAL REPORT SPECIMEN FINANCIAL STATEMENTS: PepsiCo, Inc. Appendix A The financial information herein is reprinted with permission from the PepsiCo, Inc. 2005 Annual Report. The complete financial statements are available through a link at the book’s companion website. Once each year a corporation communicates to its stockholders and other interested parties by issuing a complete set of audited financial statements.The annual report ,as this communication is called, summarizes the financial results of the company’s oper-ations for the year and its plans for the future.Many annual reports are attractive,mul-ticolored, glossy public relations pieces, containing pictures of corporate officers and directors as well as photos and descriptions of new products and new buildings. Yet the basic function of every annual report is to report financial information, almost all of which is a product of the corporation’s accounting system. The content and organization of corporate annual reports have become fairly standardized. Excluding the public relations part of the report (pictures, products, etc.), the following are the traditional financial portions of the annual report: FINANCIAL HIGHLIGHTS Companies usually present the financial highlights section inside the front cover of the annual report or on its first two pages. This section generally reports the total or per share amounts for five to ten financial items for the current year and one or more previous years. Financial items from the income statement and the balance sheet that typically are presented are sales, income from continuing operations, net income, net income per share, net cash provided by operating activities, dividends per common share, and the amount of capital expenditures.The financial highlights section from PepsiCo’s Annual Report is shown on page A-2. A1 • Financial Highlights • Letter to the Stockholders • Management’s Discussion and Analysis • Financial Statements • Notes to the Financial Statements • Management’s Report on Internal Control • Management Certification of Financial Statements • Auditor’s Report • Supplementary Financial Information In this appendix we illustrate current financial reporting with a comprehensive set of corporate financial statements that are prepared in accordance with gener-ally accepted accounting principles and audited by an international independent certified public accounting firm.We are grateful for permission to use the actual fi-nancial statements and other accompanying financial information from the annual report of a large, publicly held company, PepsiCo, Inc. LETTER TO THE STOCKHOLDERS A2 Appendix A Specimen Financial Statements: PepsiCo, Inc....
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