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How are Financial Statements Useful to Investors?

Visit the website of your favorite U.S. company. Find the company's financial statements in the section of the website for investors. Post a link to the statements. What did you find interesting about each of the four financial statements, which include balance sheets, income statements, statements of cash flows, and statements of owners' equity? How could the information in those statements be useful to an investor and to a manager?

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Apple's financial statements are always good to use for discussion because they're well organized and thorough. Here is a link to their financial statements: http://investor.apple.com/secfiling.cfm?filingID=1193125-11-282113&CIK=320193

Balance sheet -- Because they are a profitable company and have maintained such profitability, it's always interesting to see the changes in their balance sheet over the past year. In the most recent balance sheet, we can see that Apple made good use of some of their extra cash for their investors, as we see the drastic increase in long term marketable securities increase from 25,391 to 55,618 in a one-year period. This shows really good money management on Apple's part because it shows that extra cash isn't just sitting in the bank not doing anything. Apple is putting their money to work for them, which is increasing the return on investment for investors.

Income statement -- Apple had an increase in revenue that was higher in the past two years than in the past three years. We have a three year listing on their income ...

Solution Summary

Visit the website of your favorite U.S. company. Find the company's financial statements in the section of the website for investors. Post a link to the statements. What did you find interesting about each of the four financial statements, which include balance sheets, income statements, statements of cash flows, and statements of owners' equity? How could the information in those statements be useful to an investor and to a manager?

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