Describe the content and purpose of the three main financial statements. Balance Sheet What are the balances
Question:
- Describe the content and purpose of the three main financial statements.
Balance Sheet
- What are the balances at year-end for assets, liabilities, and stockholder’s equity?
- Prepare a common-size Balance Sheet. Be sure to properly label and form this financial statement.
- Review the Notes to the financial statement:
- What Inventory Method does the company use?
- What other pertinent information does the company disclose about its inventory?
- What does the company disclose regarding fixed assets and depreciation?
Income Statement
- What is revenue, gross profit, and net income for the year?
- Prepare a common-size Income Statement. Be sure to properly label and form this financial statement.
- Are there any special items on the Income Statement (e.g. Discontinued Operations, Extraordinary items)? If so, describe the event that caused the item and why is this event classified as a special item.
- Review the Notes to the financial statement:
- Describe the company’s policy on revenue recognition.
Statement of Cash Flows
- What are the cash flow totals for operating, investing, and financing activities?
- What are some of the main investing and financing activities that occurred? If there are negative cash flow totals, describe whether this cash outflow has a positive or negative impact on the company’s sustainability. Why?
Management’s Discussion and Analysis (MD&A)
- Highlight 3 interesting topics discussed in the MD&A section of the annual report.
- How does the information presented impact the financial statements and relevant ratios?
Revenues ($M)
$548,743
Profits ($M)
$19,742
Market Value ($M)
$411,690
Employees
2,200,000
Figures are for the latest twelve months ended Oct. 31, 2020. Market value as of Jan. 20, 2021. Sources: Bloomberg; S&P Global.
Key Financials (Last Fiscal Year)
$ millions
% change
Revenues ($M)
$523,964
1.9%
Profits ($M)
$14,881
123.1%
Assets ($M)
$236,495
-
Total Stockholder Equity ($M)
$74,669
-
Profit Ratios
Profit as % of Revenues
2.8%
Profits as % of Assets
6.3%
Profits as % of Stockholder Equity
19.9%
Earnings Per Share (Last Fiscal Year)
Earnings Per Share ($)
5.19
EPS % Change (from 2018)
129.6%
EPS % Change (5-year annual rate)
0.5%
EPS % Change (10-year annual rate)
3.4%
Total Return
Total Return to Investors (2019)
30.3%
Total Return to Investors (5 years, annualized)
9.4%
Total Return to Investors (10 years, annualized)
11%
Financial Statement Analysis
ISBN: 978-0078110962
11th edition
Authors: K. R. Subramanyam, John Wild