Financial Statements
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This week I learned about one of the financial statements in more depth. The statement of cash flows is a little similar to the income statement except it focuses on actual cash and is organized by the different business activities to support accurate and consistent financial data. Operating activities outlines the money received from its operations; investing activities communicate the companys investments and the cash coming in and out as part of these investments. Financing activities show what is being spent and being received to fund all of the activities of the company.
I also learned the importance in being able to analyze all of this data through horizontal and vertical analysis. Being able to measure the companys finances over specific periods or even going back through historical data to track trends. There were a lot of ratios that were presented in our resources this week. Although, I understand the importance of the ratios and also why evaluating several of the ratios together give a clear picture of a companys stability; I am concerned that I wont be able to remember all of the formulas for the variety of ratios described.