Up
Guide - Part 1
Guide - Part 2
Guide - Part 3
Guide - Part 4
Guide - Part 5
Guide - Part 6
Ratio Analysis
EBIT & EBITDA
Print Version

Guidance for Performing Financial Analysis
 

 Part 5.  Perform an ethical audit of the company (no more than 2 to
             3 minutes):

 a.  An ethical audit examines the company's social responsibility policies as well as its public ethical reputation. Determine any ethical issues that result from the nature of a company’s products, operations, governance structure or competitive environment.

 b.  Gather relevant facts needed to analyze the ethical issues relevant to the company’s annual reports and form predictions of future outcomes from the company’s ethical choices.

 c.  Executive compensation: Information of executive compensation is usually included in Form 10-K. Related information may be presented in the proxy statement.
bulletFor your firm’s highest paid executive, total the dollar amounts paid for salaries and bonuses that were received in each of the last three years. If this amount seems high, you might want to compare this to the executives of your company’s competitors.
bulletDoes the trend in stock returns match the trend in compensation being paid to the company’s top executive?
  1. You might want to compare the increase or decrease in executive compensation to the stock performance graph near the end of the proxy statement.
  2. You can also compare your company’s stock price performance to the S&P 500, NASDAQ average or the Dow average.
     
    3.