Problem: Answer the following questions based on the 2010 annual report of Danaher Corporation at the link below:
https://www.sec.gov/Archives/edgar/data/313616/000119312511044412/d10k.htm
The financial statements are on pp. 62-104 of the annual report, and all questions can be answered within those pages.
For each answer, specify where (name of financial statement, number of footnote, or page number) you found the answer. Some answers may be found in more than one place.
*Any calculations must be shown explicitly in the Word document. .
Question 1. What firm audited the financial statements? What type of opinion was issued?
Question 2. With regard to amortized intangibles:
a. What are the main types of asset being amortized?
b. What is the trend in amortization expense 2008-2010?
c. Is this trend expected to continue?
Question 3. With regard to US defined benefit pension plans:
a. What was the funded status as of December 31, 2010?
b. What effect did acquisitions have on funded status in 2010?
c. Why is the service cost for 2010 so low?
Question 4. What amount, if any, of treasury stock did Danaher purchase in 2010?
Question 5. Did Danaher incur any restructuring expenses in 2010? What, if any, was the amount of outstanding restructuring liabilities at year-end?
Question 6. What was the major non-operating cash outflow in 2010? In summary, what was acquired for this cash?
Question 7. Does Danaher have 100% ownership of all consolidated subsidiaries?
Question 8. Did Danaher have a LIFO liquidation in 2010? Was the effect material?
Question 9. What was rent expense for 2010? What is the amount of rent commitments for 2011?
Question 10. Describe briefly the stock split on May 11, 2010. Reconstruct the journal entry used to record this event.
Question 11. Explain briefly why there is a negative amount for "accounts receivable" in the operating section of the 2010 statement of cash flows.
Question 12. Compute the debt/equity and debt/tangible net worth ratios for 2009 and 2010. Comment briefly.
Question 13. Describe briefly the Apex Tool joint venture. What impact did formation and operation of this firm have on Danaher's 2010 net income?
Question 14. With regard to the approximately $2,048 million of accrued expenses as of December 31, 2010, what is the largest component? What does that tell us about Danaher's operations?
Question 15. Compute Danaher's gross margin, operating margin, and return on sales for 2008-2010. Present your results in tabular form. Comment briefly.
Question 16. With regard to stock-based compensation:
a. What is the after-tax expense for stock options for 2010?
b. What method is used to determine fair value of stock options?
c. Describe briefly the vesting requirements for restricted stock.
Question 17. What is the amount of product warranty expense for 2010?
Question 18. In the calculation of basic and diluted earnings per share, the numerators differ, as well as the denominators. Explain briefly why the numerators differ.
Question 19. Compute return on operating assets for the firm as a whole, and for each operating segment, for 2009 and 2010. Comment.
Question 20. In what overseas market does Danaher do the greatest volume of business?