Chp2_ReviewAnswers

Chp2_ReviewAnswers - Chapter 2 Introduction to Financial...

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Chapter 2 Introduction to Financial Statement Analysis Answers to Chapter 2 Review Questions 1. Firms disclose financial statements to communicate financial information to the investment community. 2. Anyone interested in a firm can look to the financial statements for information. This includes: Shareholders: checking the profitability and performance of the firm. Lenders: looking for information about the credit-worthiness of the firm. Suppliers: will this firm be a dependable customer? Competitors: seeking sales and profitability of the competition. Management: how well are we running the firm? 3. The 10-K filing includes the balance sheet, income statement, statement of cash flows, and statement of shareholders’ equity. These statements are verified by independent auditors and signed by the management and directors of the firm. 4. The purpose of the balance sheet is to show the financial position of the firm at a specific point in time.
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Chp2_ReviewAnswers - Chapter 2 Introduction to Financial...

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