Financial Statements Comparison of Two Companies
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Research and find financial statements for two companies of your choosing. Drawing on information from this course (managerial accounting), write an essay summarizing which of the two is a better investment. Include your reasons, using the course material evidence. Cite the financial statements and incorporate what you have learned from this course.
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Solution Summary
The solution compares two companies financial statements to see which is a better investment.
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Financial Statements Comparison
In order to make a sound investment decision an individual should care evaluate whether the intended option is likely to generate desired returns. Accounting information is important for an investor and also to a potential investor because it can assist in determining whether to buy, sell or hold an investment. Williams et al (2002) provides that accounting is tool through which details about a company is communicated.
Company information is derived from its financial statements that it produces at the end of every financial year. Accounting information is used to determine who well the company is performing before investing in it. Financial information provides actual state of the company and whether the company has a stable base and is capable of providing returns at rates desired by the investor. We can say that the use of financial accounting to make investment decisions is using the past to assist in determining future estimates.
The selected companies that I have selected to compare are Google and Oracle. Google Inc is a company that specializes on providing online tools such as search, it also sells operating systems and platforms but most of its revenue is generated through online advertising (Reuters, 2011). The company has another business segment referred to as enterprise which provides businesses with technological solutions. Since its inception the company has been performing well and this can be attributed to innovation.
The company is Oracle Corporation which is responsible for developing, marketing, and servicing of database and middleware software, system hardware and software applications (Reuters, 2011). The company also offers consulting services in areas such as business ...
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