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Basics of financial statements

Let's say that our company has assigned you to work on a project plan for a new internal support system. This system will be expected to track financial aspects of your company's existing and proposed projects.

In a proposal to the corporate management can you help me complete the following:
Explain how balance sheets, income statements, and cash flow statements would be used as inputs to diagnose the performance of a project and determine shareholder value.
Note that your proposal would form the basis for developing an automated tracking support system.
The balanced scorecard is a conceptual framework that incorporates
Deepen your discussion by illustrating with examples.

Solution Preview

I provided an overview of what each of these do and how they work. I included some examples, if not specific. Read through this and then ask any questions that might occur to make it clearer.

If you need to understand the value and use of the instruments named I can help you. The balance sheet is a snapshot of the company or project at a specific time. The balance sheet shows the value of the assets, the liabilities, and the shareholder's equity (owner's equity). The assets, or what the company owns, should equal the liabilities and shareholder's equity. Hence the term balance sheet. The assets are usually listed by how quickly they can be converted to cash. Non current assets are those assets that take longer (a year or longer) to convert to cash. Liabilities are either current or long term. Current liabilities are due within a year and long term are due in a year or more.
Income statements show how much ...

Solution Summary

This solution provides an explanation of the basic financial statements and balanced scorecard for companies and projects.

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