According to the textbook,
the income statement measures the success of a company’s operations for a
given period. The income statement is important to investors and
creditors, because it determines the profitability, investment value,
and creditworthiness of a company. Specifically, the income statement
helps investors and creditors predict the amounts, timing, and
uncertainty of future cash. Income statement preparers can make such
informed predictions by analyzing a company’s financial statements,
calculating the price-earnings ratio, and reviewing notes to the
financial statements on the income statement.
order to complete this assignment, use the Internet to research and
review financial statements for Exxon and Chevron for the years 2012 and
Write a five to six (5-6) page paper in which you:
- Compare and contrast the limitations and usefulness of the single-step income statement and the multi-step income statement.
the gross profit, operating profits, and net income of both Exxon and
Chevron for 2012 and 2013. Of the two (2) companies, speculate on the
main reasons why one (1) company may have been more profitable than the
each company’s price-earnings (P / E) ratio and price-to-sales ratio
(PSR). Identify primary estimates or assumptions that could result in
overstated earnings, and use the ratio data to compare the quality of
each company’s earnings.
notes to both Exxon’s and Chevron’s financial statements. Next,
identify at least two (2) notes pertaining to the income statement, and
explain the main way in which the notes in question could influence your
decision to invest in each of the companies. Provide a rationale to
justify your decision.
- Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
typed, double spaced, using Times New Roman font (size 12), with
one-inch margins on all sides; citations and references must follow APA
or school-specific format. Check with your professor for any additional
a cover page containing the title of the assignment, the student’s
name, the professor’s name, the course title, and the date. The cover
page and the reference page are not included in the required assignment
The specific course learning outcomes associated with this assignment are:
the functions and the main sections of the four (4) primary financial
accounting statements: the income statement, the statement of retained
earnings, the balance sheet, and the statement of cash flows.
the main sections of the four (4) primary financial accounting
statements: the income statement, the statement of retained earnings,
the balance sheet, and the statement of cash flows.
- Use technology and information resources to research issues in intermediate accounting
- Write clearly and concisely about intermediate accounting using proper writing mechanics.