FINANCIAL STATEMENTS | Analyzing and Interpreting Financial Statements
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FINANCIAL STATEMENTS | Analyzing and Interpreting Financial Statements | | This paper will demonstrate my understanding of financial accounting and why generally accepted accounting principles (GAAP) are important. I will discuss how financial statements are used in the marketplace. I will describe each financial statement and tell what it reveals about the business. I will explain how the statements are linked and show examples. I will explain the notes to the financial statements. I will also explain why ratios are used and why they are important. | Keiser UniversityDr. Bunney SchmidtACG 501 | Monica Holmes | 4/14/2013 |
INTRODUCTION Financial statements are the output of the accounting cycle. Financial statements are a way to communicate financial information that can be used to make decisions in regards to where the company is heading. Financial statements are a way to help organizations know whether to invest, lend, or grant credit to a company. The stakeholders of a business use financial statement information for planning, and evaluating business activities. The results reported in the financial statement may help companies determine certain decisions from a human resource prospective such as benefits, bonuses, hiring, and downsizing. Financial statements serve as a critical role in organizations because it tells a story of a company’s life cycle. Financial reporting provides information that is useful in making investments for company growth as well as credit decisions. Financial reporting provides material that is valuable in obtaining cash flow projections. Financial reporting provides facts regarding assets of an organization, the claims to those resources, and changes in those resources. There are several questions that financial statements can answer such as is the business profitable, is the operating activities of the business generated sufficient cash flow, and has the business grown since the previous year.
FINANCIAL STATEMENTS | Analyzing and Interpreting Financial Statements | | This paper will demonstrate my understanding of financial accounting and why generally accepted accounting principles (GAAP) are important. I will discuss how financial statements are used in the marketplace. I will describe each financial statement and tell what it reveals about the business. I will explain how the statements are linked and show examples. I will explain the notes to the financial statements. I will also explain why ratios are used and why they are important. | Keiser UniversityDr. Bunney SchmidtACG 501 | Monica Holmes | 4/14/2013 |
INTRODUCTION Financial statements are the output of the accounting cycle. Financial statements are a way to communicate financial information that can be used to make decisions in regards to where the company is heading. Financial statements are a way to help organizations know whether to invest, lend, or grant credit to a company. The stakeholders of a business use financial statement information for planning, and evaluating business activities. The results reported in the financial statement may help companies determine certain decisions from a human resource prospective such as benefits, bonuses, hiring, and downsizing. Financial statements serve as a critical role in organizations because it tells a story of a company’s life cycle. Financial reporting provides information that is useful in making investments for company growth as well as credit decisions. Financial reporting provides material that is valuable in obtaining cash flow projections. Financial reporting provides facts regarding assets of an organization, the claims to those resources, and changes in those resources. There are several questions that financial statements can answer such as is the business profitable, is the operating activities of the business generated sufficient cash flow, and has the business grown since the previous year.