Below please find the year ended December 31, 2018, Mercedes Benz financial (annual) reports prepared under IFRS:

Also, below, you can find a hyperlink to the year ended December 31, 2018, General Motors Corporation financial (annual) report prepared under the US GAAP:

Your client has asked you for some advice about how to compare Mercedes Benz (MB) to General Motors (GM) for the purposes of a potential common stock investment. Your client has also accessed these financial (annual) reports and cannot make “heads or tails” of what they mean and how the results of these two giants in the car industry really compare to each other. Your client has asked you to help by preparing a summary and a financial comparison of one to the other, including some financial ratios which you should choose (which can be liquidity, solvency, or profitability-related ratios) and which are important to your client.

For your initial posting for this Discussion, summarize for your client in plain English with supporting analyses where required answers to the following questions. Please copy and paste in bold type each question into your initial response:

  1. Some of the key differences in      the basis of preparation of the two 2017 financial (annual) reports for MB      and GM. Refer to what you learned in the earlier modules of this course      and what you learned in this module to answer this question.
  2. Free cash flow is important to      your client when deciding whether to invest in the common stock of any      company. Compare the free cash flow using the Statement of Cash Flows for      MB under both bases of accounting to GM. Briefly explain the results and      how they may or may not be comparable to each other as well as why or why      not.
  3. Pick one other key ratio in each      of the following areas: liquidity, solvency, or profitability. Compare the      ratios for the last two or three years for MB under both bases of      accounting to GM. Briefly explain the results and how they may or may not      be comparable to each other as well as why or why not.
  4. Summarize what you learned from      this discussion and exercise about the potential problems that may arise      between foreign firms reporting under local statutory financial reporting      rules, IFRS, and a competitor in the U.S. reporting only under the US      GAAP.
  5. Did the SEC have in the public      interest the decision to eliminate the reconciliation by foreign      registrants of their IFRS-prepared financial statements to the US GAAP?      See this article regarding the SEC’s decision in 2006: SEC      Relieves foreign Companies of U.S GAAP filing Requirements. (Links to      an external site.)
  6. Why or why not, in your opinion?
  • Offer and support an opinion
  • Expand on classmates’ posting

Your posts must be formatted according to APA format.