Which of the following statements is correct? a. The annual report contains four basic financial statements:...

Which of the following statements is correct?

	a.	The annual report contains four basic financial statements: the income statement; balance sheet; statement of cash flows; and statement of changes in long-term financing.
	b.	Although the annual report is geared toward the average stockholder, it represents financial analysts' most complete source of financial information about the firm.
	c.	The key importance of annual report information is that it is used by investors when they form their expectations about the firm's future earnings and dividends and the riskiness of those cash flows.
	d.	The annual report provides no relevant information for use by financial analysts or by the investing public.
	e.	None of the above statements is correct.

Expert Solution

The annual report contains four basic financial statements: the income statement; balance sheet; statement of cash flows; and statement of changes in long-term financing. (False)
Reason: The annual report contains audited income statement; balance sheet; statement of cash flows; but doesnot contain statement of changes in long-term financing.

Although the annual report is geared toward the average stockholder, it represents financial analysts' most complete source of financial information about the firm.(False)
Reason:?It doesn't represent financial analysts most complete source of financial information about the firm as it may be fraudulent or manipulated by the firm.

The key importance of annual report information is that it is used by investors when they form their expectations about the firm's future earnings and dividends and the riskiness of those cash flows.(True)
Reason:The common investor can use this information to gauge whether it is genuine and form an opinion about the future performance of the company.

The annual report provides no relevant information for use by financial analysts or by the investing public.(False)
Reason : It does provide information about the company's future course of action

Best of luck for future

jeff jeffy answered 2 years ago

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