Jorge Martinez is thinking about buying an existing printing business and has been carefully studying the records of the business to get a good handle on its historical financial performance. Jorge heard that you are taking a class in entrepreneurship and asks you, “What suggestions do you have for me to make the best use of this financial information (i.e., three years of audited income statements, balance sheets, and statements of cash flows)?” What suggestions would you give Jorge for making the maximum use of the financial statements?
Answer to relevant QuestionsCasey Cordell is the owner of a digital photography service in Madison, Wisconsin. The company has been profitable every year of its existence. Its debt ratio is currently 68 percent, its current ratio is 1:1, and its ...Toward the beginning of this case, the following statement appears: “Almost all small businesses experience cash flow shortfalls.” What is cash flow? Why is cash flow so critical to an entrepreneurial firm’s success? ...What is the purpose of an income statement? What are the three numbers that receive the most attention when evaluating an income statement? Why are these numbers important? How valuable do you think online forums and Q&A sites, such as those mentioned in this feature, can be to someone who’s trying to learn the “business” aspect of starting a business? In what ways do lenders and investors lend legitimacy to a firm?
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