Explain the importance of financial statements to access the reality of their respective business financial status and performance.
- In your own words explain the importance (and contents) of each statement in assessing the financial status of a company. Explain the information each these independent, financial statements provide to the various stakeholders such as management, shareholders and public alike? Include examples and evidence of your own research.
Describe and highlight some of the discrepancies that can appear or deliberately be omitted in these statements. For example the inclusion (or exclusion) of assets, market capitalization, owners’ equity, and particularly (1) non-financial health of the company, (2) what the customers are thinking, and (3) what the competitors are planning. Include examples and if possible, evidence of your own research.