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ADIDAS: Analysis of 2020 Annual Report The aim of this assignment is for you to get a better understanding of how annual reports are structured and an understanding of the types and different sources of information and the depth of information that can be found in an annual report

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ADIDAS: Analysis of 2020 Annual Report

The aim of this assignment is for you to get a better understanding of how annual reports are

structured and an understanding of the types and different sources of information and the depth of

information that can be found in an annual report. By the end of this assignment, you should

have learned what your company does (business model, revenue streams, particularities of the

industry), how the company has developed over the last year(s) and where its risks / opportunities /

strengths / weaknesses lie – in comparison to peer companies. Overall, you should have a fairly good

feeling about whether you would want to invest in this company or not.

 

In working on your assignment, please make sure to:

 

• read your company’s annual report 2020,

• consult relevant IFRS guidance and IFRS literature (or other legal texts & commentaries) on

your assignment topic, if necessary.

• In analysing your assigned topic – if applicable / as far as possible – provide context

information that can be deduced from different sources in the annual report (e.g., when

analysing the cash flow statement, locate information on the underlying facts/circumstances in

other areas of the annual report).

• Provide your analysis according to academic standards (structure, form, etc.), and carefully

reference your sources (e.g., paragraphs of the relevant IFRS, pages in the annual report, and

all other literature and sources that you considered; do not use Wikipedia or other webpages

as a source, if you find relevant literature online you can of course site the literature itself).

• Your paper should be between 10 and 12 double-spaced pages.

 

Questions:

 

1) Analyse your company’s streams of revenue and profit. Identify at least one question that is

relevant when determining revenue in accordance with IFRS 15 (describe this accounting

question at hand and how the company addressed this accounting question, e.g., multicomponent,

definition of ordinary activity, principal-agent etc.). Which are the most relevant

categories of expenses and why? How did these expenses develop compared to the previous

year? Explain the background and evaluate this development.

 

2) Identify the main performance measures (GAAP as well as alternative performance measures,

APM) used by your company. Explain these measures in the context of your company’s

business model. How did these performance measures develop compared to the previous

year? Discuss advantages and disadvantages of APM compared to “IFRS performance

measures”. Compare your company’s performance measures and with two other comparable

companies (explain your choice of peer companies).

 

3) How did operating, investing, financing cash flows develop compared to the previous year?

Identify the main drivers of the development for each of these cash flows. How did free cash

flow develop? Interpret and discuss your findings. Compare your results to two other

comparable companies (the same as for (2))

 

4) Analyse your company’s goodwill. If possible, find out how the goodwill was acquired and

which CGUs it is attributed to. Describe the “asset” that the goodwill represents. Analyse the

recoverability of the goodwill as of the balance sheet date. Explain your approach in analysing

the recoverability of the goodwill.