Understanding Financial Statements

M 1 Assignment 2: Discussion—Understanding Financial Statements

In this assignment, you will learn to read and interpret financial statements. Understanding the picture these four-document summaries provide of a company’s financial performance is critical to making decisions about its management and its relation to the global economy and financial markets.

Tasks:

• Please put the following income statement and balance sheet terms in the proper order:

Taxes, Interest, gross profit, selling, general and administrative expenses, sales, depreciation, net income, and cost of goods sold, EBITDA.

• Please put the following balance sheet terms in the appropriate category as either short-term assets, long-term assets, short-term liabilities, long-term liabilities, and/or owner’s equity:

Cash, accounts payable, accruals, property, plant and equipment, inventory, accounts receivables, paid in capital, retained earnings, notes payable, mortgage, and accounts payable.

• In terms of McGladrey and Pullen’s “Reading & understanding financial statements,” explain the balance sheet equation in 300 words or less.
• http://linkwizard.next.ecollege.com/pub/content/adee1623-c64c-483c-bdda-e316c1e13a3e/Reading_And_Understanding_Financial_Statements.pdf

• Your initial post should be 750 to 1000 words long and demonstrate critical thinking and analysis. Apply APA standards to all citations of sources.

Submission Details:

• By Friday, March 27, 2015, post your responses to this Discussion Area. Support your assumptions by citing reputable source material used for this discussion in APA format.

Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation

Make sure your writing

• is clear, concise, and organized;
• Demonstrates ethical scholarship in accurate representation and attribution of sources; and displays accurate spelling, grammar, and punctuation.