Assignment: Discussion-Understanding Financial Statements

In this assignment, you will learn to read and interpret financial statements. Understanding the four financial statements provided in the lectures and reading for this week and dealing with a company's financial performance is critical to making decisions about its management and its relation to the global economy and financial markets.

Tasks:

• Put the following income statement and balance sheet terms (general ledger accounts) in the proper order for properly prepared financial statements:

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

• Put the following balance sheet terms (general ledger accounts) in the appropriate category as either short-term assets, long-term assets, short-term liabilities, long-term liabilities, and/or owner's equity for properly prepared financial statements:

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

• In terms of McGladrey and Pullen's Reading & understanding financial statements: A guide to financial reporting, explain the balance sheet equation in 300 words or less. Incorporate this explanation into your complete initial post.

Submission Details:

• Post your responses to this Discussion Area. Support your assumptions by citing reputable source material used for this discussion in APA format.

• Respond to at least two of your classmates' posts on two different days. While responding, share any real-world experiences involving what these concepts mean to you as far as their role in decision making is concerned. Provide substantive comments by contributing new, relevant information or quotes from course readings, Web sites, or other sources; building on the remarks or questions of others; or sharing practical examples of key concepts from your experiences-professional or personal.

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

Do the following when responding to your peers:

• Read your peers' answers .

Provide substantive comments to at least two peers on a minimum of two different days by

o contributing new, relevant information from course readings, Web sites, or other sources;
o building on the remarks or questions of others; or
o sharing practical examples of key concepts from your professional or personal experiences

• Respond to feedback on your posting and provide feedback to other students on their ideas.
• Make sure your writing

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