Denise settled on a nail salon in her town. She is ready to perform due diligence. The current owners have provided her with a set of their financial statements and the tax reports for the last several years. It’s been a while since Denise took accounting; can you tell her whether she would be likely to answer the questions below in the balance sheet, the income statement the statement of cash flows or the tax returns?
a. What are the tax rates for this business?
b. How much money does the shop bring in?
c. Does the company have a positive cash flow?
d. How much is the equipment in the salon worth?
e. Will I be taking on much long-term debt?
f. How much is depreciation?
g. How much has been spent in advertising?