Financial Statement Analysis tells you if your company is on the right track. Are you growing, making more money? Find out why the Liquidity, Leverage, Profitability, and Cash Flow Ratios are so important to a company's survival? List at least '1' for each category, describing how it is calculated, and what it means.

Which areas of a financial statement do you think outside investors care more about when performing a financial statement analysis? In other words, where in the financial statements should you spend the most time researching if you were planning a multi-million dollar investment into a public company? Why would you focus so much on that area?

You are evaluating your company's recent operating performance and are trying to decide on the relative weights you should put on the income statement, the balance sheet, and the statement of cash flows. Discuss the information each of these statements provides and its role in evaluating operating performance.

What is your primary objective in choosing a company in which to invest money? What key items or relationships will you look for in each financial statement that will help you decide in which company to invest?

Discuss how financial markets could help to finance the growth of the business. Discuss with examples.

The balance sheet contributes to financial reporting by providing a basis for all of the following except Group of answer choices evaluating the capital structure of the enterprise. assessing the liquidity and financial flexibility of the enterprise. determining the increase in cash due to operations. computing rates of return.

Emerson Electric is engaged in design, manufacture, and sale of a broad range of electrical, electromechanical, and electronic products and systems. The following shows Emerson's net income and net income before extraordinary items for the past 20 years (in millions): Net Year Income Y1 $201.0 Y2 237.7 Y3 273.3 Y4 300.1 Y5 302.9 Y6 349.2 Y7 401.1 Net Income before Extraordinary Items $201.0 237.7 273.3 300.1 302.9 349.2 401.1 Net Year Income Y8 $408.9 Y9 467.2 Y10 528.8 Y11 588.0 Y12 613.2 Y13 631.9 Y14 662.9 Net Income before Extraordinary Items $408.9 467.2 528.8 588.0 613.2 631.9 662.9 Emerson Electric Net Year Income Net Income before Extraordinary Items Y15 $708.1 Y16 Y17 Y18 1,018.5 Y19 1,121.9 Y20 1,228.6 1,228.6 788.5 907.7 $ 708.1 904.4 929.0 1,018.5 1,121.9 Emerson has achieved consistent earnings growth for more than 160 straight quarters (more than 40 years). PROBLEM 2-14 Earnings Management Strategies

Below is an equation that breaks down the concept of Return on Equity into its components (individual parts). ROE = Net income Sales Net Profit margin Sales Total assets Asset turnover ROA X Total assets Total equity Equity multiplier Using this equation, explain briefly how a company can improve its Return on Assets (ROA), and the impact of this improvement on its Return on Equity (ROE). Is an improvement in ROA that the only way that ROE can increase?

Explain the financial statements that are critical for understanding the company’s ability to earn profits and generate cash in the future.

Indicate whether the following are true or false. Financial statement analysis is used by insiders and outsiders to identify strengths and weaknesses. Time series analysis compares one firm to another. If you want to determine the gross profit earned on each dollar of sales, use the operating profit margin ratio. The earnings per share ratio is used to predict the amount of cash dividends.      Discounted cash flow values an asset based on the future value of cash flows associated with that asset