What happened to assets, earnings, dividends, and cash flows during the financial year?
Accounting practice in the United States follows the generally accepted accounting principles (GAAP) developed by the Financial Accounting Standards Board (FASB), which is a nongovernmental, professional standards body that monitors accounting practices and evaluates controversial issues. The Securities and Exchange Commission (SEC) requires all publicly traded companies to periodically report their financial information.
A publicly held corporation must publish an annual report that contains the balance sheet, income statement, statement of cash flows, statement of stockholders’ equity, and other financial information for analysis.
The following table lists descriptions of the major financial statements and reports that a firm publishes. Identify the correct statement or report for each description.
Description
Statement or Report
Explains the changes in a company’s stockholders’ equity over the accounting year. Balance Sheet, Statement of Stockholders equity ,income statement,Statement of cashflows, anual report
Provides details about the flow of funds from operating, investing, and financing activities. statement of cashflows,balance sheet,income statement, anual report,stockholders equity
Is issued once a year by a corporation and contains basic financial statements and an analysis of past performance and future prospects. Statement of CashFlows, Balance sheet, Income Statement, Anual Report, Statment of Stockholders equity
Has three segments that when analyzed together give an idea of what the company owns and what it owes. Same drop-down choices as previous question above!
Gives details about the firm’s sales, costs, and profits for the past accounting period. Same drop-down choices as above from previosus question
Accountants focus on creating financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance. Indicate which financial statement you would refer to when answering the questions in the following table:
Balance Sheet
Statement of Cash Flows
Does the firm generate enough internal funds to support anticipated investment, or does additional outside capital need to be raised?
Can the firm meet all its short-term obligations using its current assets?
The annual report is very important for investors, because the information contained in the annual report:
A: Helps investors forecast expected earnings and dividends.
B: Shows the prices at which each investor purchased the company’s stocks and bonds.