MGT-660 Topic 7 DQ 2.docx - How do you plan to use...

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How do you plan to use financial statements in your projected financial statement analysis? Provide rationale for your approach. Financial statements are utilized in financial analysis to help make decisions. Financial statement analysis can help to understand a firm’s financial situation. Through analyzing financial statements over reporting periods, trends and projections as to where the firm will be in the future can be identified. The three main financial statements every firm uses are the balance sheet, income statement, and cash flow statement. These statements provide transparent reporting to portray the value of firm to its current and future stakeholders. The balance sheet shows a firm’s financial worth by showing the firm’s assets, liabilities, and shareholders equity. Short- term assets can assist in telling a firm’s operational efficiency, liabilities assist in showing the amount of debt a firm has, and shareholder’s equity tells a firm about capital investments. “The

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