As an outsider, we may not get detailed data about every single investment that companies have made. However, we can roughly assess a company's overall financial performance using a measure very similar to ROI (a very simple financial statement analysis).

1) Select a manufacturer, which must be a public company so their financial statements are publicly available (unless you own a firm and are willing to use the data).

2) Find the company's Net Income and Total Assets by the end of the fiscal year 2020 and 2019, respectively. Many companies publish their financial statements on their websites. Simply Google them and you should be able to find the numbers.

3) Calculate the return on assets (ROA) as Net Income/Total Assets. Compare the 2020 and 2019 ROA. What do you see in the change of the company's financial performance?

4) Don't forget to cite the source of the data!

Answer rating: 100% (QA)

Answer Investors should use the abundance of information supplied in a companys financial statements to aid in their evaluation of the company as a possible investment When examining a financial state... View the full answer