4: Understanding the Numbers for Better Decisions
It is the management’s responsibility to maximize shareholder wealth as it is based on the organization’s future cash flows. To accomplish this, managers have to understand how to use financial statements for analysis.
In this assignment, you will explain the importance of the statements to the financial reporting process and management decisions.
- Locate the financial statements of a publicly-traded company of your choice by visiting the organization’s Web site or the investor section of the following Web site:
- U.S. Securities and Exchange Commission http://www.sec.gov/.
- Review the information presented in the financial statements of the company you selected.
- Using the company you selected, calculate one ratio for a three-year period from each category located athttp://www.netmba.com/finance/financial/ratios/.
- Describe what the trends you see might mean for your company.
- Compare your company’s ratios with those of the industry it is in.
- Analyze the financial reporting information and the financial health of the company with the help of the calculated ratios. Describe the information you did not see in the financial statements or the notes to the financial statements.
Write a 2–3-page research paper. Apply APA standards to citation of sources.