Reference no: EM132242623 , Length: word count:300
Assignment -
Companies must be aware of the variables that drive the economics of their business, both for their revenues and expenses. Some of these drivers are internal to the company, and controllable (e.g., advertising spending), and others are external, and less controllable, if at all (e.g., interest rates). In good times, management will often credit their fine performance to the decisions they've made about the controllable variables. In bad times, they often point to the uncontrollable drivers to explain disappointing results.
Review FedEx's mandatory Management Discussion and Analysis ("MD&A") accompanying their annual report, for fiscal years 2017 and 2018. (Links may be found in the Resources section in NYU Classes.)
Assume the role of a research analyst, and prepare a report, in your own words, summarizing the part of the commentary in the MD&A of 2017 that discusses the business drivers impacting the expenses of that year. (Search for section with MD&A entitled "Operating Income".)
1. List all the business drivers directly impacting expenses that are actually discussed in the MD&A of 2017.
2. Briefly discuss the four most important factors (in your opinion). What did management say about these drivers for 2017? Why do you consider these drivers the most critical to this company?
3. In looking at the actual results of 2018, discuss whether these four factors had the expected result. (For example, if the MD&A of 2017 suggested that oil prices were a significant cost driver of Fuel Expense, and oil prices in fact increased 20% during 2018, did the related expense actually increase 20% in 2018?)
4. Present a brief side-by-side comparison of the commentary in the MD&A of 2017 to that of 2018. Were the same business drivers discussed? Were they assigned the same importance by management? Discuss any variations you observed, and the possible reasons for management's change in emphasis.
Note - Please Just do Question 2, around 300 words.
Attachment:- Assignment File.rar