Management Discussion and Analysis

Management Discussion and Analysis Section (MD&A)

Management discussion and analysis section (MD&A) is the yearly company report The company management provides a review of how their company performs financially. They also talk about the future aims. This report is vital for analysts and investors. The investors utilize this report to discover if their company is worth to invest into. This research paper analyzes the management discussion and analysis of the companies Silicon Graphic International (SIG) and CRAY Inc.

Financial Statements Discussion in MD&A

MD&A sections have to include the financial statements discussion. SIG and CRAY provided their financial statements. Both companies have the previous year’s financial data comparison. The MD&A of SIG and CRAY also shows the overall financial position as well as the results of the operation. The overall information demonstrates whether the company has improved or worsened its performance compared to the previous year. In this case, both companies have a forward-looking statement. It helps give a look at how the company will perform in future.

Business Summaries and Reports

The two companies have also included their business summaries. This piece of documentation talks about the SGI and CRAY companies. The reports also contain the balance sheet and consolidate statements of operations, stockholder equities, comprehensive losses, and cash flows. There is also a section for significant events. SGI shows the results of operations for 2014, 2015, 2016 while CRAY has only included the 2016 results in their MD&A. The previous year’s results show how the company performed the last year. It also shows the financial highlights. Operating expenses, segment operating performance, liquidity and capital resources, and critical accounting policies and estimates are also included. Overall, the management discussions and analyses of CRAY and SGI include forward-looking statements, a summary of 2016 results, market overview and challenges, key performance indicators, revenue and gross profit expenses, liquidity and capital resources, and critical accounting policies and estimates.

Forward-Looking Statements and Company Projections

CRAY’s and SGI’s both having included a forward-looking statement is important since it helps in showing future projections expected by the companies. However, that may differ because of the risks. The overview and executive summary show the primary operations of the companies. It also shows the customers of the companies. The market overview also highlights the trend in the industry. Key performance indicators have also been included in the MD&A of the two companies. Some of the key performance indicators include cash flow, operating expenses, and revenue. The key performance indicator section will help the investor make an informed decision.

Relevant Information for Investors

The management discussion and analysis section must contain relevant information that will help investors make a decision on whether they should invest in the company or not. However, there is some information that has been included in the Silicone Graphic International corp. (SGI) but not in the report made by CRAY Inc. The two companies chose to report different information in their management discussions and analyses because of their natures of business. The significant event is redundant and it will not provide useful information. Therefore, it should not be included in the MD&A report. The critical accounting policies also should not be necessarily mentioned in the report. Another part that should not be included is the MD&A is the retirement benefit obligation just as the new accounting pronouncements. Information that is required should be one that will enable the investors to make a decision on whether their investment in the company will be beneficial to them or not.