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Annual Report Canon U.S.A., INC. Charee Turner ACG2021.080. Executive Summary. Though Canon’s growth is suffering with the rest of America’s economy, it’s still growing. This company will survive and thrive through it’s struggle. http://opd.usa.canon.com/html/ciw/investor_relations/index.html.

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executive summary

Executive Summary

Though Canon’s growth is suffering with the rest of America’s economy, it’s still growing. This company will survive and thrive through it’s struggle.

http://opd.usa.canon.com/html/ciw/investor_relations/index.html

part a introduction
Part A. Introduction
  • Chief Executive Officer - Yoroku Adachi
  • Corporate Headquarters – Lake Success, New York
  • Ending date of latest fiscal year – December 31, 2004
  • Products include: Color and black-and-white copiers, printers, image filing systems, facsimile machines, cameras and lenses, camcorders, semiconductor, broadcast, and optical equipment, flatbed scanners, medical, and other specialized industrial products
  • Though Canon, INC. is worldwide, their subsidiary, Canon U.S.A., INC. has sales and support offices throughout the Americas.
part a audit report
Part A. Audit Report
  • Ernst & Young. The Board of Corporate Auditors of Canon Inc. is made up of four auditors, two of whom are external auditors with no personal associations, capital affiliations, business connections, or other types of interest with or in Canon Inc. In accordance with the Board of Corporate Auditors’ auditing policies and their assigned duties, the auditors attend board, management, and various committee meetings, receive business reports from the directors and others, carefully examine documents related to important decisions, and conduct strict audits of the company’s business and assets
  • Though growth is expected, it will be slow moving due to the economic strains the US is currently experiencing.
part a stock market information
Part A. Stock Market Information
  • As of October 5, 2005 at close, the stock price was $54.61/share of common stock.
  • Between October 2004 and October 2005: High - $56.06 and Low - $47.29
  • $0.63
  • December 31, 2004
  • If you have stock in Canon already, hold it. If you have the money to invest, don’t. This company’s recovery will take a little longer for an investment to be profitable.
part b industry situation and company plans

Part B. Industry Situation and Company Plans

The industry for Canon U.S.A., Inc. is moving up but at an extremely retarded rate. Due to the economic strains in America, investors are wary of future events. However, Canon continues to push on with new technologies http://www.canon.com/technology/index.html and developments http://opd.usa.canon.com/html/ciw/investor_relations/index.html in order to keep the industry moving, even if it is at a snail’s pace.

part c income statement

Part C. Income Statement

Multistep Income Statement Format

The increase of these amounts show that Canon is growing as a whole, but at a relatively slow rate.

part c balance sheet

Part C. Balance Sheet

In millions of yen

The largest increase was in Assets, the next largest in Stockholder’s Equity. Liabilities considerably less of a change. This is how I would see my own company run, had I one.

part c statement of cash flows

Part C. Statement of Cash Flows

Cash flows from operations are more than net income for the past two years.

The company is not growing through investing activities, i.e., buying property, plant and equipment and other long lived assets.

The company’s primary source of financing is stock sales.

Overall, cash has increased over the past two years.

part d accounting policies

Part D. Accounting Policies

The company and it’s domestic subsidiaries maintain their books of account in conformity with financial accounting standards of Japan. Foreign subsidiaries (which would include Canon U.S.A., Inc.) maintain their books of account in conformity with financial accounting standards of the country of their domicile.

part d accounting policies continued
Part D. Accounting Policies (continued)
  • Topics of the Notes to the Financial Satements
    • Basis of Presentation and Significant Accounting Policies
    • Basis of Financial Statement Translation
    • Foreign Operations
    • Marketable Securities and Investments
    • Trade Receivables
    • Inventories
    • Property, Plant, and Equipment
    • Finance Receivables and Operations Leases
    • Goodwill and Other Intangible Assets
    • Short-term Loans and Long-term Debt
    • Trade Payables
    • Employee Retirement and Severance Benefits
    • Income Taxes
part d accounting policies continued12
Part D. Accounting Policies (continued)
  • Topics of the Notes to the Financial Statements (continued)
    • Common Stock
    • Legal Reserve and Retained Earnings
    • Other Comprehensive Income (Loss)
    • Net Income per Share
    • Derivatives and Hedging Activities
    • Commitments and Contingent Liabilities
    • Disclosures about the Fair Value of Financial Instruments and Concentrations of Credit Risk
    • Supplemental Cash Flow Information
part e financial analysis liquidity ratios
Part E. Financial AnalysisLiquidity Ratios
  • Working Capital – 1,248,987 mil yen
  • Current Ratio – 2.27
  • Receivable turnover – 6.07
  • Average days’ sales uncollected - 60
  • Inventory turnover – 37.6%
  • Average days’ inventory on hand – 971

In my opinion, inventory is being held for too long. Something needs to be done to increase sales.

part e financial analysis profitability ratios
Part E. Financial AnalysisProfitability Ratios
  • Profit margin – 9.9%
  • Asset turnover – 1.02
  • Return on assets – 10%
  • Return on equity – 16.8%

The return on equity is fine, but I would like to see a higher return on assets and a larger asset turnover.

part e financial analysis solvency ratio
Part E. Financial AnalysisSolvency Ratio
  • Debt to equity 2004 - 53.9%

2003 – 61.9%

Debt to equity has decreased almost 10%. This is the mark of a growing business.

part e financial analysis market strength ratios
Part E. Financial AnalysisMarket Strength Ratios
  • Price/earnings per share 2004 – 15

2003 – 19.8

  • Dividend yield 2004 – 1.1%

2003 - .81%

The stock has become more valuable and the dividends more profitable.