ACC 561 ACC/561 Week 1 Financial Statement Review - 78002

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Select an American corporation. Visit its website and download the Income Statement, Statement of Stockholders Equity, Balance Sheet, and Statement of Cash Flows. Complete the Financial Statement Review Worksheet. Submit the completed worksheet, copies of the downloaded financial statements, and a link to the website.
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Financial Statement Review

What is the net income for the current fiscal year? Is it up or down from the prior year? Why would this information be important to investors?

The net income of the Intel Corporation in 2013 was \$ 9,620 and it was lower than prior year. The net income in 2012 was \$11,005. This information is important for investors because it would help them to make decision about whether they should invest in the company or not. There is slight decrease in the net income of organization in 2013 as compared to 2012 so the investors may look for an organization that has higher net income as compared to prior year.

What is the ending balance in stockholders’ equity? Why would a labor union potentially be interested in this information?

Stock holder’s equity represents the cash that are invested in the company by the owners of the corporation. The owners of corporation are also known as shareholders.  The ending balance in stockholders’ equity was \$58,256.  This information is important for labor union because if there in a rise in the stock holder’s equity then the union negotiators would use it as an evidence of improved or sustained profitability and would demand for increase in benefits and wages of employees (Demand for accounting information, n.d).

What is the total value of assets? Why would this information be important to a potential creditor?

The total value of assets was \$92,358. Businesses often rely on loans or credit accounts to launch or expand. Lender looks at the financial statements when the organization applies for loan. The bank looks at the assets of the organization when they review the credit-worthiness.  Creditors in particular want to see that organization is capable enough to take on new obligations and they would be able to provide the loan back (Kokemuller, n.d).

What is the total cash flow from operation?

The total cash flow from operation was \$20,776.

What financial statement user would find this information most important?

Operating cash flow uncovers the true profitability of the organization. This information is important for the investors as it helps them gauge what’s going on behind the scenes (Schmidt, 2013).

References

Demand for accounting information. (n.d). Retrieved June 8, 2014 from http://userwww.sfsu.edu/sjhsieh/ACCT303%20Chapter%201%20Homework%20Solutions.pdf

Intel. (n.d). Retrieved June 8, 2014 from http://www.intc.com/financial-statements.cfm

Kokemuller, N. (n.d). Why Creditors Are Interested in the Total Assets of a Company. Retrieved June 8, 2014 from http://smallbusiness.chron.com/creditors-interested-total-assets-company-78242.html

Schmidt, M. (2013). Cash Flow Statement. Retrieved June 8, 2014 from http://www.investopedia.com/articles/investing/102413/cash-flow-statement-reviewing-cash-flow-operations.asp