B describe the roles of the key financial statements (statement of financial position, statement of comprehensive income, statement of changes in equity, and statement of cash flows) in evaluating a company’s performance and financial position;

Question 1

Key financials

Answer 1

IS: Profits> R g > E’s through T = Shareholder loyalty

CI: OE chngs less shareholder trans (Issues, Buybacks, Divs)

BS: A=L+OE in T

OE: = Paid-in Capital + RE. Amounts and sources of OE change through time

CF’s: Cash inflows and outflows. Payments and receipts.

Question 2

What to look for in a balance sheet

Answer 2

Improved liquidity, solvency, and position.

Question 3

4 most common changes to OE

Answer 3

+Income, Paid in Capital

-Buybacks, Dividends

Question 4

CF stmnts

Answer 4

CFO (normal),

CFI acquire or sell PPE, Subs or segments> securities (investments in other firms)

CFF (issue or retire debt and equity securities + divs)

evaluating liquidity, solvency, +CFO> CFI> CFF

running a business depends on CFO