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Using Financial Information

Using Financial Information. Using Financial Information

You and a business partner are considering the purchase of a firm that has been in business for five years.  Your associate does not have any financial accounting expertise, but recognizes that financial information is central to every organization.  Recently, this associate, who is not familiar with financial statements, asks you a series of questions.  In your own words respond to the following questions that are being asked by your business partner.

  • How does a balance sheet differ from an income statement?
  • What does the term ‘owners’ equity’ mean?
  • What is the difference between fixed assets and total assets?
  • What is the difference between long-term liabilities and current liabilities?
  • How would you describe the difference between a statement of cash flow and an income statement?
  • What can be used to identify a business’ financial strengths and weaknesses?
  • Why should we be concerned with all these financial processes when we can get an accounting firm to handle this stuff while we focus on daily business operations?

This assignment submission must be at least 3-pages, not including APA cover page or references page using the APA Manual 7th ed. Make sure references are formatted correctly not leaving out any information from sources.

Using Financial Information

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