REQUIRED: Identify the errors in the notes and correct them. Specifically: - If a wrong statement is made in a sentence, provide a correct sentence. - If there is a wrong result of a calculation, do the calculation by yourself and provide the correct result. - List the corrections in the order the errors appear in the notes. - Number your corrections consecutively, i.e. 1., 2., 3. etc.

General company information Company: adidas AG - Accounting period end date of the most recent financial statements: 31 December 2020 Background research - adidas prepares its consolidated financial statements in accordance with IFRSs as adopted by the EU. A competitive advantage can only be achieved with a corporate strategy of differentiation. Managers' accounting choices may be influenced by their incentives, e.g. not to violate accounting-based debt covenants. - An example for a conservative accounting policy is to overestimate the depreciable life of PPE. - Turnover ratios allow to evaluate a company's investment management. When forecasting the financial statements of adidas, one should assume that profitability tends to be mean-reverting. According to the findings of Francis, Olsson and Oswald (Journal of Accounting Research, 2000), the forward earnings multiple generates more accurate value estimates than the discounted free cash flow model. If we assume a competitive equilibrium after the final year of the forecast, the sum of the discounted abnormal profits in the discounted abnormal profit model is zero. According to Demirakos, Strong and Walker (Accounting Horizons, 2004), analysts frequently use earnings multiples to value a company but rarely use the discounted abnormal profit model. - adidas has a long-term credit rating from Standard & Poor's of A+, and this indicates that adidas has a low default probability. - adidas could acquire another company in order to penetrate new markets. General company information Company: adidas AG - Accounting period end date of the most recent financial statements: 31 December 2020 Background research - adidas prepares its consolidated financial statements in accordance with IFRSs as adopted by the EU. A competitive advantage can only be achieved with a corporate strategy of differentiation. Managers' accounting choices may be influenced by their incentives, e.g. not to violate accounting-based debt covenants. - An example for a conservative accounting policy is to overestimate the depreciable life of PPE. - Turnover ratios allow to evaluate a company's investment management. When forecasting the financial statements of adidas, one should assume that profitability tends to be mean-reverting. According to the findings of Francis, Olsson and Oswald (Journal of Accounting Research, 2000), the forward earnings multiple generates more accurate value estimates than the discounted free cash flow model. If we assume a competitive equilibrium after the final year of the forecast, the sum of the discounted abnormal profits in the discounted abnormal profit model is zero. According to Demirakos, Strong and Walker (Accounting Horizons, 2004), analysts frequently use earnings multiples to value a company but rarely use the discounted abnormal profit model. - adidas has a long-term credit rating from Standard & Poor's of A+, and this indicates that adidas has a low default probability. - adidas could acquire another company in order to penetrate new markets