Question

In: Finance

Rank the following in order of importance and why . Income Statement, the Balance Sheet, and...

Rank the following in order of importance and why .

Income Statement, the Balance Sheet, and the Statement of Cash Flows

Solutions

Expert Solution

Ranking in order of importance is as follows-

A. Statement of cash flows- Statement of the cash flows is reflecting the ability of the company in order to generate the cash and it is also reflecting the liquidity on the part of the company in order to repay the creditors so it will be reflecting the solvency of the company in the long run and the ability of the company to survive through various economic scenario as the company will be having an adequate reflection of the cash as it is always said that cash is the king in overall business. Businesses which are generating higher amount of cash can survive and sustain through longer period of time and they can sustain through adversities.

B. Balance sheet- Balance sheet of the company will be reflecting the Assets and the liabilities of the companies and it will be reflecting the overall ownership of the Assets and the liabilities of the company along with the capital structure of the company so it will be providing the adequate idea about the strength on weakness of the company at a particular point of time

C. Income statement- income statement of the company is related to income and expenses of the company within a short span of time and it will be reflecting the profits of the company within this short span of time and it is not highly preferred by investors because it is not reflecting much of the information about sustainability of the company and it is just focused upon a profit statement in a certain period of time.

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance sheet of Whole Foods Market Inc. WHOLE FOODS MARKET INC. Consolidated Statement of Operations Fiscal Years Ended (in millions) Sept 25, 2016 Sept 27, 2015 Sales $15,724 $15,389 Cost of goods sold and occupancy costs 10,313 9,973 Gross profit 5,411 5,416 Selling, general and administrative expenses 4,477 4,472 Pre-opening expenses 64 67 Relocation, store closures and lease termination costs 13 16 Operating income 857...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance...
Analyzing, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance sheet of Whole Foods Market Inc. WHOLE FOODS MARKET INC. Consolidated Statement of Operations Fiscal Years Ended (in millions) Sept 25, 2016 Sept 27, 2015 Sales $15,724 $15,389 Cost of goods sold and occupancy costs 10,313 9,973 Gross profit 5,411 5,416 Selling, general and administrative expenses 4,477 4,472 Pre-opening expenses 64 67 Relocation, store closures and lease termination costs 13 16 Operating income 857...
Explain the importance of the balance sheet and income statement in financial decision making. Describe the...
Explain the importance of the balance sheet and income statement in financial decision making. Describe the difference between average and marginal tax rates. Identify the sources and uses of cash represented on the statement of cash flows.
4) List the order in which the balance sheet, statement of retained earnings, and income statement...
4) List the order in which the balance sheet, statement of retained earnings, and income statement are prepared. Briefly discuss why this order is necessary.
Put the following income statement and balance sheet terms (general ledger accounts) in the proper order...
Put the following income statement and balance sheet terms (general ledger accounts) in the proper order for properly prepared financial statements: Taxes, interest, gross profit, selling, general and administrative expenses, sales, depreciation, net income, cost of goods sold, EBITDA. Put the following balance sheet terms (general ledger accounts) in the appropriate category as either short-term assets, long-term assets, short-term liabilities, long-term liabilities, and/or owner's equity for properly prepared financial statements: Cash, accounts payable, accruals, property, plant and equipment, inventory, accounts...
Income Statement and Classified Balance sheet
    Harvey Specter started his own firm, Specter Co. on .July I, 2011. The list of different Account titles with respective balance  (each account has a normal balance) at September 30, 20l3 as follows                                        Specter Co.                                            List or Accounls                                                              ...
Comparing Income Statements and Balance Sheets of Competitors Following are selected income statement and balance sheet...
Comparing Income Statements and Balance Sheets of Competitors Following are selected income statement and balance sheet data from two retailers: Abercrombie & Fitch (clothing retailer in the high-end market) and TJX Companies (clothing retailer in the value-priced market). (a) Express each income statement amount as a percentage of sales. Round your answers to one decimal place (example: 0.2345 = 23.5%). Income Statement ($ millions) ANF TJX Sales $3,469 $21,942 Cost of goods sold 1,257 Answer% 16,040 Answer% Gross profit 2,212...
Comparing Income Statements and Balance Sheets of Competitors Following are selected income statement and balance sheet...
Comparing Income Statements and Balance Sheets of Competitors Following are selected income statement and balance sheet data from two retailers: Abercrombie & Fitch (clothing in the high-end market) and TJX Companies (clothing retailer in the value priced market), for the fiscal year ended January 30, 2016. (a) Express each income statement amount as a percentage of sales. Round your answers to one decimal place (ex: 0.2345 = 23.5%) Income Statement ($ thousands) ANF TJX Sales $3,518,680 $30,944,938 Cost of goods...
Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows Assume the following are the...
Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows Assume the following are the financial statements of Nike, Inc. Consolidated Statements of Income Year ended May 31 In Millions 2011 2010 Revenues $ 21,862 $ 20,014 Cost of sales 11,354 10,214 Gross profit 10,508 9,800 Demand creation expense 3,248 2,356 Operating overhead expense 4,345 3,970 Total selling and administrative expense 7,593 6,326 Interest expense (income), net 4 6 Other (income) (33) (49) Income before income taxes 2,944 3,517...
Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows Assume the following are the...
Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows Assume the following are the financial statements of Nike, Inc. Consolidated Statements of Income Year ended May 31 In Millions 2011 2010 Revenues $ 21,862 $ 19,014 Cost of sales 11,354 10,214 Gross profit 10,508 8,800 Demand creation expense 2,948 2,356 Operating overhead expense 4,845 3,970 Total selling and administrative expense 7,793 6,326 Interest expense (income), net 4 6 Other (income) (33) (49) Income before income taxes 2,744 2,517...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT