investment or project and decide which of them qualify as good uses of the money stockholders have invested in the firm * Make financing decisions * Decision of how to pay for the investments * Make short-term cash needs * Ensure that the firm has enough cash on hand to meet its obligations from day to day Goal of
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Depot, Inc. fiscal year for 2011 ended on January 31, 2012, and their 2011 10-K report was produced to the Securities and Exchange Commission thereafter. After review of the key financial statements, it was found that the balance sheet, income statement, cash flow statement, and stockholders’ equity statement remained consistent over the documented years. All figures reported below are in millions except for per share values, ratios, and percentages. The balance sheet reported on Home Depot’s
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the business is run in a reasonable and responsible way. What developed out of those needs are financial statements. Guided by the government, and pushed by market forces, businesses decided that a few standard documents would be required to provide clear and concise records of financial activity. The primary financial statements are: Balance Sheets, Income Statements, and Cash Flow Statements. * Balance Sheets * Provides detailed information about a company's assets, liabilities, and
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Understanding Financial Statements Maryanne M. Rouse, University of South Florida Source: Instructor’s Manual for: Wheelen, Thomas L. and J. David Hunger (2008) Concepts in Strategic Management & Business Policy, 11 ed. Pearson Prentice Hall. The following pages contain a paper by Maryanne Rouse of the University of South Florida. It can be very useful to those students who need to improve their knowledge of financial analysis, ratios, etc. You are free to make copies of this paper to give your
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Exercise 14.1 Selected information taken from the financial statements of Maxum Company for two successive years follows. You are to compute the percentage change from 2010 to 2011 whenever possible. Round all calculations to the nearest whole percentage. 2010 2011 a. Accounts receivable…………………………………………… $126,000 $160,000 b. Marketable securities………………………………...……….. - 0 - 250,000 c. Retained earnings………………………………...…………… 80,000 (80,000) d. Notes receivable……………………………………
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Financial Statements 1. List the components that comprise a typical financial statement. a. Income Statement i. Reflects Net Income and Net Loss ii. Is a moving picture of operations during the period b. Statement of Owners Equity iii. Changes in owners equity during a time period iv. Increases from Net Income v. Decreases from Withdrawals and Net Loss c. Balance Sheet vi. “Statement of financial position”
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1. Investors use the information to assess whether or not they want to put money into the company. Equity investors look for an indication of stability and the potential growth. Debt investors are concerned with the firm's ability to generate cash to make interest .Vendors who supply the firm on credit look for its ability to pay its bills in the short term. Management uses financial information to pinpoint problem areas for improvement in operations. 2. Financial information about
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an organization, various ratios such as the profit margin, return on assets and return on equity can be used to analyze the profitability. Liquidity on the other hand simply refers to the ability with which the company’s assets can be converted into cash. This is always calculated and analyzed using various ratios of liquidity (Palepu, & Healy, 2008). Debt analysis of a company simply refers to analysis of the company’s debt in relation to the assets of the company. This is done using debt ratio analysis
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industry. On the other hand, if companies want your investments they must provide accurate, substantial evidence to show that you will make the right investment if you invest in them. Therefore, publicly traded companies publish their financial statements in their annual reports which investors can analyze use to make an investment decision. The Walt Disney Company is an entertainment company that is well known worldwide. The company was founded in Burbank, California in 1923 and became a public
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EPA * Cost & Revenue Determination * Job costing * Process costing * ABC * Sales * Assets & Liabilities * Plant and equipment * Loans & equity * Receivables, payables & cash * Cash Flows * From operations * From financing * From investing * Decision Support * CVP analysis * Performance evaluation * Incremental analysis * Budgeting * Capital allocation * Earnings
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