Week- assignment
Multinational Operations and Financial Results
Prior to beginning work on this assignment, review Chapter 16 of the textbook and visit The Industry Week U.S. 500 (Links to an external site.) web page. For this assignment, you will analyze and interpret the impact of a firm’s multinational operations on tax rates and financial results.
Choose two companies from the list of The Industry Week U.S. 500 (Links to an external site.) public manufacturers from the same industry. Obtain the 10-K reports for this company for the latest year.
In your paper,
- Determine what method each company is using to record foreign currency transactions and foreign currency translation. Support your determination with citations from the 10-K reports of each company.
- Identify the assets of each company identified as foreign currency derivatives hedges.
- Identify the liabilities of each company identified as foreign currency derivative liabilities.
- Explain the impact on each company’s taxes due to multinational operations.
- Be sure to indicate the direction (positive or negative) of the effect of tax rates in foreign jurisdictions on each company’s effective tax rate.
- Review the information provided and determine how much of each company’s business occurs in non-US locations.
- Identify the non-US locations.
- Identify the most significant non-US location.
- Explain how much of each company’s sales growth in the most recent fiscal year is due to foreign exchange rates using the management discussion and analysis (MD&A) section of the reports and the supplementary schedules.
- Compute the gross profit margin, operating profit margin, and net profit margin for these two firms.
- Compare the margins of the two firms (“Item #8”)
- Explain the impact of each company’s foreign currency and hedging transactions (gains or losses) on the margins of each firm computed in Item #8.
- Compare the margins of the two firms, including the relevant information about the impact of foreign currency and hedging transactions.
- Adjust the earnings of each company to remove the foreign currency and hedging transactions.
- Restate the earnings on both a pre-tax and after-tax basis.
- Recalculate the gross profit margin, operating profit margin, and net profit margin for these two firms based on the adjusted earnings.
- Compare the adjusted margins of the two firms.
The Multinational Operations, Tax Rates, and Financial Results paper
- Must be three-to-four double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the APA Style (Links to an external site.) resource. Within these three to four pages, provide data tables and calculations. These tables and calculations should be approximately 30% of the total work product.
- Must include a separate title page with the following:
- Title of paper
- Student’s name
- Course name and number
- Instructor’s name
- Date submitted
