Description
Purpose of Assignment
This activity helps students recognize the significant role accounting plays in providing financial information to management for decision making through the evaluation of financial statements. This experiential assignment requires students to use ratios to evaluate and analyze a company's liquidity, solvency, and profitability.
Assignment Steps
Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Commission (SEC), University Library, Library resources: Company Directories and Financials
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.
Select a publicly traded, U.S. corporation with which you are familiar or one where you currently work or have worked in the past.
Research the company on the Internet and download the Income Statement, Statement of Shareholders' Equity, Balance Sheet, and Statement of Cash Flows.
Develop a minimum 700-word examination of the financial statements and include the following:
- Determine the net income for the current fiscal year (FY). Is this income up or down from the prior year?
- Explain the relevance of changes in net income to investors.
- Determine the ending balance in shareholders' equity. Why would organizations such as labor unions be interested in this?
- Determine the total value of assets.
- Discuss the relevance of the total value of assets to potential creditors and why this is important.
- Compute the return on assets. Discuss the relative profitability of the company based on your results.
- Compute the working capital and current ratio. Evaluate the relative liquidity of the company based on your results.
- Compute the debt to assets ratio and the free cash flow for your company. Analyze the results and comment on the relative solvency of the company.
- Discuss how the financial statements are used in your current role or a position you would like to hold. How might these aid you in managerial decision making?
Show your work in Microsoft® Word or Excel®.
Complete calculations/computations using Microsoft® Word or Excel®.
Include the four financial statements along with your assignment.
Format your assignment consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
Attached.
Running head: FINANCIAL STATEMENTS
1
Financial Statements
Name
Course
Tutor
Date
FINANCIAL STATEMENTS
2
Apple Incorporation
Apple Incorporation is an American multinational company which is headquartered in
Cupertino in the United States. The company deals with designing, developing and selling of
consumer electronics, online services as well as computer software. The Apple’s hardware
products comprise of iPhone, iPad, Mac personal computers, iPod, Apple TV and Apple watch.
The consumer software comprises of the iOS and macOS operating systems, iTunes, iLife and
iWork suites. In addition, the online services comprise of iOS App Store, Apple Music, Mac App
Store and iCloud.
Examination of Apple’s financial statement
The net income of Apple Inc. for the fiscal year ended 24th September 2016 was
$45,687,000. The net income significantly decreased during the 2016 fiscal year in comparison
to the net income of $53,394,000 during the 2015 financial year. The income decreased by
$7,707,000 which is 14.43% during the 2016 fiscal year. This indicates that Apple Inc. suffered a
decrease in the net income ("AAPL Income Statement", 2017).
The change in income for the Apple Company is a bad indication for the investors as the
net income for the given fiscal year decreased. Due to the decrease in the net income, the Return
on Investment of Apple Inc. also decreased. This decrease will scare away some of the investors
in the company since they fear low returns and low dividend payout. The demand of the stock
will decrease thus leading a decrease in the market price of the stock. All this will result in a
decrease in the wealth of the investors.
FINANCIAL STATEME...