Learning Engagement #7Learning Engagement, Week 7:
What are the objectives of financial statements?
What are the limitations of financial statement analysis?
Discuss the need for comparative analysis and how it affects decision-making in the workplace?
Identify 3 different tools of financial statement analysis, describing each in detail with an example of the tool illustrated
PROFESSOR’S GUIDANCE FOR THIS WEEK’S LE:
Managerial Accountants develop financial statement analysis for a variety of reasons. Internally, the results of current operations are compared against benchmarks to determine if the company is on track to meet its goals. Further, we can use analysis to look beyond our company to our competitors and to the industry. Along with the Management Discussion and Analysis, supports the company’s business operations in a quantifiable way.
We can use these metrics as well if we are seeking to invest with a company. Different ratios can be calculated to measure areas of liquidity, profitability, and solvency—the overall health of the company. But, we need to understand how these metrics are defined and calculated. A company that uses FIFO inventory valuation can provide much different results than a company that adopted the LIFO inventory valuation. So before you produce comparative company or industry results, you need to get a good understanding of the policies and practices of that company!
1. Please make sure that you read the relevant chapter from the textbook
2. Watch the YouTube videos for this week and additional course material provide
3. Ensure that you can communicate your point of view clearly and without ambiguity. Provide one example to strengthen your point of view in the main discussion.
POST YOUR 300-400 WORD
OFFER AT LEAST TWO 100-200 WORD COMMENTS (REPLIES) TO POSTS FROM YOUR PEERS’ DISCUSSIONS
YOU WILL BE GRADED USING THE FOLLOWING RUBRIC AND STANDARD