DMBA620 Week 2 Fin Analysis Essay

6. If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends?

A balance sheet gives an overall picture of a company's financial situation by showing the total assets of a business, including liabilities plus equity. Current assets can include cash, accounts receivable, inventory and prepayments for insurance. The balance sheet is used by investors to get an idea of what the shareholders have invested, including

SUMMARY OF STUDY OBJECTIVES 1Identify the sections of a classified balance sheet. In a classified balance sheet, companies classify assets as current assets; long-term investments; property, plant, and equipment; and intangibles. They classify liabilities as either current or long-term. A stockholders' equity section shows common stock and retained earnings. 2Identify and compute ratios for analyzing a company's profitability. Profitability ratios, such as earnings per share (EPS), measure aspects of the operating success of a company for a given period of time. 3Explain the relationship between a retained earnings statement

a. The financial statements I would use are the Balance Sheets, Income Statements, Cash Flow Statements, and Shareholders Equity Statements from the last 2-5 years. In order to better assess the company it would be advantageous to understand the company’s business, industry and their competitors. In addition, to assist in the assessment of the company, it would be helpful to have financial ratios of the company’s competitors and the industry, too.

a.) The income statement, also called the profit & loss account (P & L), is used to illustrate a company’s revenues and expenses over a particular period of time. It shows the net profit and/or loss for the given period (the difference between the business’ total income and its total costs). It also allows shareholders to see the performance of the business and if it has made an acceptable profit.

b) What is the relationship between net income on the income statement and the equity section on a balance sheet?

Datar, S., Rajan, M., (2013). Financial and Managerial accounting, custom edition, Pearson Learning Solutions, Ch. 9

1. This question addresses the effect of Microsoft’s software capitalization policy on its financial statements. Ignore any potential tax effects.

Kimmel,Paul D,Weygand, J, Donald E. Kieso (2008). Accounting. 3rd ed. New York : George Hoffman. Page 1010.

This income statement tells how much money a company has brought in (its revenues) how much it has spent (its expenses) and the difference between the two (its profit). The income statement show’s a company’s revenues and expenses over a specific time frame. This statement

The income statement measures the flow of business activity by comparing revenues to the expenses over a period of time, as opposed to the momentary status of the business at a point in time (Brian P. Brinig, 2011). The income statement is important because it lists the amount of expenses that were incurred to create the revenues of the company. The biggest typical expenses for a company are the cost of goods sold, advertising and promotion, depreciation, wages and salaries, and rent.

According to the Small Business Administration, income statements illustrate the money a company will make after all expenses are calculated in, they are read top down to the bottom and represent the earnings and expenses of a company over a specific period of time (Preparing Financial Statements, 2015). Income statements begin with revenue and expenses are subtracted from it. First, the

The balance sheets provide similar data to the income statement but with a different objective. The balance sheet is used to capture the performance of a business with

The balance sheet is a very detailed imagine of the overall health of a company’s financial system for a specific date or time period (i.e., quarterly, bi-annually, or semi-annually). The major types of expenses that are commonly found on a typical income statement are the assets, liabilities, and net worth of owner’s equity (i.e., stocks or stockholders). An asset is something that the business or company physically owns and also pertains to the liquid cash, accounts receivable, and inventories. A liability by definition is a legal debt or obligation that a company incurs through normal working conditions (Liability, 2015). Items that are found on this portion of the balance sheet would be the accounts payable, deferred revenues, and accrued expenses. The last

The Balance sheet is known as ‘Statement of Financial Position). It is showing the assets, liabilities and capital.