Response to the following problem:
A company's stakeholders often differ in their financial statement focus. For example, some stakeholders focus primarily on the income statement, while others may focus primarily on the statement of cash flows or the balance sheet. For each of the following situations, indicate which financial statement would be the likely focus for the stakeholder.
Choose either the income statement, balance sheet, or the statement of cash flows and justify your choice.
Situation One: Assume that you are considering investing in eBay (capital market stakeholder).
Situation Two: Assume that you are considering purchasing a personal computer from Dell.
Situation Three: Assume that you are a banker for Citigroup (capital market stakeholder), considering whether to grant a major credit line (loan) to Wal-Mart. The credit line will allow Wal-Mart to borrow up to $400 million for a five-year period at the market rate of interest.
Situation Four: Assume that you are employed by Sara Lee Corporation (product market stakeholder) and are considering whether to extend credit for a 60-day period to a new grocery store chain that has recently opened throughout the Midwest.
Situation Five: Assume that you are considering taking a job (internal stakeholder) with either Sears or JCPenney.