ACCT2005: Annual Report Analysis and Interpretation of Two Companies

This report presents an analysis of the annual reports of Procter & Gamble (P&G) and ConocoPhillips, comparing their key aspects. The introduction highlights the importance of financial statement analysis for decision-making, emphasizing industry characteristics, company strategies, and risk assessment. The discussion section compares P&G, a consumer goods company, and ConocoPhillips, an energy corporation, across several dimensions. It examines their industry strategies (differentiation vs. value creation), accounting policies (US GAAP variations), financial strategies (balanced growth vs. capital allocation), environmental and social practices (sustainability initiatives), and corporate governance. The conclusion summarizes the key differences and similarities between the companies, emphasizing the importance of transparency and strategic alignment. The report references the 2018 annual reports of both companies and relevant academic sources to support its findings. The report is aimed at fulfilling the requirements of an assignment where students have to analyse the annual reports of two companies from different industries and draw a comparison between them.

Running Head: ANNUAL REPORT ANALYSIS AND INTERPRETATION
ANNUAL REPORT ANALYSIS AND INTERPRETATION
Name of the Student
Name of the University
Author Note

1ANNUAL REPORT ANALYSIS AND INTERPRETATION
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Comparison of Key Aspects of Company’s Report with Company in another Industry.......2
Conclusion..................................................................................................................................4
Bibliography...............................................................................................................................5

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Introduction
The financial statement analysis is described as the process of doing analysis of the
financial statements of the organization for decision-making. The effective analysis of the
financial statement includes identifying the industry’s economic characteristics, identifying
companies’ strategies, assessment of the quality of firm’s financial statements, value of the
firm, analyzing risk and current profitability and so on (Crowther, 2018). Hence, under this
assignment discussion will be done on comparison of the key aspects of the report of the
company with the company in another industry. The company taken for analysis will be
Procter & Gamble and ConocoPhillips.
Discussion
Comparison of Key Aspects of Company’s Report with Company in another Industry
Industry and Strategy
The company Proctor & Gamble (P&G) is the American multination company in the
industry of consumer goods. It incorporated in the year 1905 with having focus on providing
the branded packaged goods of consumer all across the world. P&G uses differentiation as
their generic strategy for their competitive advantages. It use to highlights value as well as
quality in their consumer goods. However, ConocoPhillips is the American multinational
energy corporation in Oil & gas Exploration & Production Industry. It is among the six major
companies of oil. The company has the strategy for creating the value by the price cycles
with the help of delivering on disciplined financial as well as operational priorities, which
underpin their proposition of value (Robinsonet al. 2015).
Accounting policies

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In the preparation of the financial statements according to US GAAP, P&G have
certain policies of accounting that requires for having choice between the acceptable methods
of accounting or requires having judgments or the estimation in its application. It includes
goodwill and intangible assets, certain benefits of employee, income taxes and recognition of
revenue. However, in case of ConocoPhillips, the accounting policies of the company
includes consolidation principles and the investments, foreign currency translation, uses of
the estimates, recognition of the revenue, costs of shipping as well as handling, cash
equivalents, investments of short-term, inventories, measurements of fair value, derivative
instruments, Income taxes as well as so on (Static.conocophillips.com.2019).
Financial Policies
In case of P&G, the company strategizes for having clear-balanced top as well as
bottom line growth as well as generation of cash, which consistently helps in delivering total
return of the shareholders in the topmost position of third in their group of the peer. However,
in case of ConocoPhillips, the company is having strategy of $6.1 billion budget of capital,
increased dividend;focus on per share growth as well as $3 billion in the planned share
buybacks for third straight year (Crowther, 2018).
Environmental and Social Practices
In case of P&G, the company launched “Ambition 2030” as their 2030 goals of
environmental sustainability, which embody their commitments towards enabling as well as
inspiring the positive impacts of the world by creating value for the company, partners and
consumers (P&G Annual Report. 2018). In case of ConocoPhillips, the company prepares
annual sustainability reports that provide details on the priority issues reporting for company,
CEO’s letter as well as key matrices of environmental, social as well as governance. The
efforts of sustainability of the company focuses on the advancement of the actions plans for

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the changes in climate, water and the rights of human as well as biodiversity
(Crowther,2018).
Corporate Governance
In case of P&G, the required information of directors, executive directors as well as
corporate governance has been implemented by the reference of sections of 2018 Proxy
statement that is pursuant filed to the 14A Regulation. In case of ConocoPhillips, the
company has posted the Ethical Code copy on the company’s website in section of
“Corporate Governance”
Conclusion
Hence, it is concluded from the analysis that both the companies is in different
industry and doing different operations that are entirely different from each other. However,
one thing is common in between both the companies of different industry is that both are
following the strategy for leading the company, having financial strategy for growth, having
accounting policies in accordance with the country’s requirements and having transparency in
corporate governance and sustainability.

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Bibliography
Crowther, D., 2018. A Social Critique of Corporate Reporting: A Semiotic Analysis of
Corporate Financial and Environmental Reporting: A Semiotic Analysis of Corporate
Financial and Environmental Reporting. Routledge.
Robinson, T. R., Henry, E., Pirie, W. L., &Broihahn, M. A. (2015). International financial
statement analysis. John Wiley & Sons.
P&G Annual Report 2018. 2019. Pg.com. Retrieved 25 August 2019, from
https://www.pg.com/annualreport2018/index.html#/
Static.conocophillips.com.2019 Retrieved 25 August 2019, from
https://static.conocophillips.com/files/resources/conocophillips-2018-ar.pdf