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   1. Class,

       Can you please discuss with your peers and myself why you feel there are
       different financial statements and why do the perticular items appear on
       each statement? Give your thoughts (Instructors post)
   2. Can any of you tell me who the users are for these financial statements
       and what are they looking for? (instructor’s post)
   3. 1. Balance sheet: details a company’s assets, liabilities, and stockholders’
equity during a specific point in time.
       2. Income statement: details a company’s sales, expenses, and profit produced
       during a specific period of time.
       3. Statement of Shareholders' Equity or Statement of Retained Earnings:
       reconciles the retained earnings number in the balance sheet with net income as
       well as showing to changes in various shareholders’ equity accounts over a year’s
       time.
       4. Statement of cash flows: details the cash flow involved in operating,
       investing, and financing.

These reports can be used by both Internal and external users to determine a
company’s profitability. The reports will allow a company internally to see the potential
for growth due to trending in sales of specific products. This will allow for adjustments
in resources to purchase and increased production and staff. In addition, it will show
externally how profitable a company could be in the future which could attract potential
buyers or future stock holders. (Justins L post)

   4. These financial statements are used by stockholders to analyze a
      company and see if they are worthy of having the investor buy stock in
      the company to get the best return possible for their investment.
      However, for an investor to strategic in the stock market, a person must
      review the financial reports provided quarterly as public record for any
      publicly traded company. Also, investors must think long-term
      investment with any stock options they select. This does not mean that
      certain stocks are not sold or purchased incremently. This just means that
      an investor needs to have more knowledge than just reviewing a
      company's financial statements once to make wise investing decisions.
      That is why having a financial advisor is important because you are
      paying for their knowledge and financial advice with your investments
      as the prime interest to them.

       I am not a financial advisor but have learned many lessons when I did
       not have a professional. My limited knowledge of financial statements
   and what to look for when investing would not be enough to get the
   returns on investment that I have. (Anita’s post)
5. Balance Sheet - financial condition at a particular date
   Income Statement - operating results over a period of time
   Statement on Shareholders Equity -reconciles retained earnings number in the
   balance sheet with net income in addition to changes in shareholders equity
   Statement of Cashflows - effects of operating, investing, and financing activities
   on cash balance

   How are the four main financial statements used to determine a firm’s
   profitability by both internal and external users?
   Internal and external users can evaluate these reports to determine profitability.
   The balance sheet will show whether or not a company liabilities and assets are
   balanced and how much is invested. The income statement will show if the
   company is generating enough revenue to continue business. (Rose D post)

6. The four types of financial statements found in most annual
   reports are balance sheet, which is a snapshot of the firm's
   financial status on a particular date.

   The income statement, which captures the operating results of the
   firm over a period of time.

   The statement of retain earnings, which reconciles the retained
   earnings number in the balance sheet.

   The statement of cash flows, which shows the effects of a
   company's operating, investing and financing activities on its cash
   balance.

   Internal and external users would use the information reported to
   assess the company's financial status and make
   important financial decisions about how to position the company
   in the future in relation to profitability and longevity. (LaToya’s
   post)

				
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posted:10/31/2010
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