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In: Accounting

Internet Case 20.4 – Using the SEC EDGAR Database (MUST POST FIRST) Initial Post – As...

Internet Case 20.4 – Using the SEC EDGAR Database

(MUST POST FIRST) Initial Post – As an employee, write an internal memo to your manager addressing the following:

Visit the home page of The Securities & Exchange Commission at the following address: www.sec.gov

Use EDGAR to locate the most recent 10-K by researching an automotive company of your choice on the Internet and examine its consolidated income statement.

WRITE A MEMORANDUM INCLUDING

1. In the most recent year reported, what percentage of the company’s total revenue was from financial services?

2. In the most recent year reported, what was the company’s gross profit as a percentage of automotive sales?

3. How might the company’s sales mix (e.g., trucks, cars, sport utility vehicles, etc.) influence its profitability?

Solutions

Expert Solution

MEMORANDUM

To     : The Manager

From :   Employee

CC      : Others

Date   :    21-September - 2018

Sub    : Analysis of 10-K filed recently by General Motors for FY 2017

After careful study of form 10-K recently filed by General Motors with SEC, which is available with www.SEC.gov the following data is compiled:-

A. Percentage of Company’s revenue from Financial Service

As per 10-K filed by the Company, out of total revenue of $155,488M for FY 2017, revenue from financial services was reported as $13,121M which is 8.43% of total revenue.

B.Gross Profit from Automotive segment as a percentage its sales

The company has reported a gross profit of $19,038M from it’s automotive segment in FY 2017 which is 14% of its sale of $133,307M from the segment

C.Impact of Company’s sales mix

The Company has reported an unfavourable mix impact on it’s profitability for FY 2017 associated with the Chevrolet Malibu, Volt and Spark, partially offset by full-size trucks and SUVs and a reduction in rental car activities

I shall be glad to provide any further information or clarification in this regard.

Signed


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