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Below is the Daimler Benz (MB)’s 2019 Annual Report prepared under IFRS:Daimler 2019 Annual Report (https://group.mercedes-benz.com/documents/investors/reports/annual-report/daimler/daimler-ir-annual-report-2019-incl-combined-management-report-daimler-ag.pdf?r=dai)Also, below, you can find a hyperlink to the year ended December 31, 2019 General Motors Corporation financial (annual) report prepared under the US GAAP:General Motors Company Annual Report 2019 https://investor.gm.com/static-files/6e1cc515-418e-4c5b-9526-f8ea41e02aef)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:Some of the key differences in the basis of preparation of the two 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.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.Pick one other key ratio in each of the following areas: liquidity; solvency; and 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.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 US reporting only under the US GAAP.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 Eliminates Reconciliation Requirement for Foreign Companies; AICPA Recommends SEC Use International Accounting Standards (Links to an external site.) Why or why not, in your opinion?Reference:Daimler.com. (2019). Daimler 2019 annual report. https://www.daimler.com/documents/investors/reports/annual-report/daimler/daimler-ir-annual-report-2019-incl-combined-management-report-daimler-ag.pdfAICPA. (2020). SEC eliminates reconciliation requirement for foreign companies; AICPA recommends SEC use international accounting standards. IFRS Resources. https://www.ifrs.com/updates/aicpa/SEC_Eliminates_Reconciliation.html (Links to an external site.)United States Securities and Exchange Commission. (2019). General Motors Company annual report 2019. https://investor.gm.com/static-files/6e1cc515-418e-4c5b-9526-f8ea41e02aef
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