Advanced Accounting Individual Simulation Exercise Requirements:
- The purpose of this exercise is to demonstrate your ability to obtain useful information from public filings with the SEC. In this exercise, you will utilize the SEC.Gov web site as well as any other information that an individual company might provide to its investors and other stakeholders or that may be generated by external organizations (for example brokerage firms). The exercise will result in a short paper that you will provide your results. You will need to use the Department of Accounting writing guidelines for this individual exercise.
- The company that you will use is Dana Incorporated, formerly known as Dana Holding Corporation with a ticker symbol of DAN (NYSE).
- Using the recently filed Form 10-k (February 18, 2016), develop a table that has key financial metrics of Dana compared with three of its competitors. Two ways to identify competitors would be to use the search by “SIC code” feature or to use the list of companies used as peers for executive compensation analysis as shown in the proxy statement. The proxy statement (Def 14a) was filed around March 11, 2016.
- After reading some of the risk factors and other information about Dana and its competitors, identify and provide your analysis of the competitive advantages and disadvantages that Dana has in comparison to the peer companies you selected in a table format.
- Please describe any hedging arrangements that the company uses.
- If you were the new chief executive officer of Dana and wanted to grow the company via acquisitions, what would be the amount you would allocate for making acquisitions? Please explain why.
- During 2016, a number of Form 8-ks were filed regarding material events. Please describe several of them. Also, please provide some of the debt covenants that the company must adhere to as indicated in their Form 10-k filing. Some of the covenants changed during 2016, what was one of the more significant changes.
- Use the proxy statement from the prior year dated, March 11,2016 (Form Def 14A) and answer the following questions:
- The proxy statement requires an advisory vote from shareholders on the executive compensation. Should this vote be not supportive of executive compensation, what should the company do.
- Final Paper:
- Your paper should not exceed six pages double spaced (expectation is three to 4 pages) and should follow Department guidelines (for example, 12 point font). If you use double spacing, obviously the pages numbers will increase proportionally which is fine. You will need to have a table for comparing Dana to its peer competitors. Since you will be pulling items from public filings that are clearly marked, you will not need to prepare an appendix for referencing.
- A rubric is provided for scoring. A critical element of this paper is you critical thinking about Dana, its processes, its financial condition and its peers.
Grading Rubric for Advanced Accounting Individual Exercise
|5 points- Excels at usage of SEC.Gov in obtaining relevant information||3-4 points – adequate usage of Sec.Gov and provided some material about the case||2-0 points – Used Sec/Gov and pulled some information from the site for the case|
|5 points – Provided thoughtful analysis of comparisons of case company to its peers||3-4 points – provided basic analysis of case company to its peers||2-0 points – provided limited analysis about peers compared to case company|
|5 points – Provide thoughtful analysis about the questions of the case||3-4 points – Provided basic thoughts case questions||2-0 points – provided some limited thoughts about the case questions|
|5 points – Presented well-reasoned analysis on items from the proxy statement and the Form 8k||3-4 points – Provided some commentary about proxy statement and Form 8k items||2-0 points – Provided basic information about the proxy statement and Form 8k items|
|5- points – Provided a concise, well thought out paper that uses appropriate grammar and spelling; captured the reader’s interest||3-4 points – Provided a concise paper that was presented in an organized manner and had few grammar or spelling issues; provided interesting information for a reader||2-0 points – Prepared a paper that was basic in approach and had some errors in grammar and spelling; did little to engage the reader|