In: Accounting
Review the 10k reports from Microsoft and Apple in 2018-2019, write a few paragraphs about which company you would rather invest in maybe give a a few reasons why you choose this company with possible financial information and non-financial information in it. Thank you :)
there are three main areas where financial accounting helps with decision-making:
Investing Decisions
Fundamental analysis depends heavily on the accounting data that is recorded on a company's financial statements, including the balance sheet, income statement, and cash flow statement.. Each of the financial statements for publicly traded companies are created and reported according to the financial accounting standards set forth by the Financial Accounting Standard Board (FASB) and submitted to the Securities and Exchange Commission (SEC).2
Investors and analysts use the information from financial statements to make decisions about the valuation and creditworthiness of a company, allowing them to set price targets and determine if a stock's price is fairly valued or not. Without the information provided by financial accounting, investors would have less understanding about the historical, current, and prospective financial health of stock and bond issuers. The requirements set forth by the FASB create consistency in the timing and style of financial accounts, which means investors are less likely to be subject to accounting information that has been filtered based on a firm's current condition
Non Possible Financial Information :
Nonfinancial Data and Investment
The focus of any business decisions is usually profit and loss. How much will it cost us? What are the potential rewards? What's the risk of loss? However, there are also times when nonfinancial information is required for an investment decision.
Nonfinancial data is also important for internal decision making. Cutting employee benefits and bonuses might improve your bottom line in the short term, but if it damages employee morale and loyalty, it'll hurt in the long run.
Examples of Nonfinancial Information Benefits
Measuring whether sales revenue rises or falls between this quarter and the last is simple. Measuring customer loyalty, employee commitment or environmental impact takes more work, but it offers rewards:
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