Homework
I. Whether it is for business or personal, expenses are generally broken down into two categories, fixed and variable. Discuss each type of expense as well as the pros and cons for each.
II. Create a personal cash flow statement (note that you can make up numbers if you aren't comfortable using your personal information). Note: A cash flow statement is a management tool; whether it is for your personal management or to manage a business and as such it needs to be complete with a thorough evaluation of all the resources coming in and how they are going to be utilized.
III. Pick any publicly traded company and calculate their Earnings per share (EPS). You must show your work. You can find the financials for any publicly traded company online at sites like yahoo finance or msn money.
IV. Now pick a company in the same industry and compare their financial statements.
1. Compare their EPS (show calculations for the second company), which one is better and why?
2. Calculate both companies' net profit margin. Show calculations.
3. Which one is better, and why. Be specific in your answer with tangible information.
V. Explain one application of how you would use each of the following financial statements to make business decisions and please be specific (I want you to find a use in each one of the statements, not just one of the statements).
Also, don't give me the obvious answer; put some thought into it (i.e. we all know that an income statement will tell us how much profit or loss the company made). I want you to answer as if you were preparing for a meeting with the executive operating committee and they have tasked you to find ways to help the company improve. Hint: use anything and everything at your disposal both in the book and on the web (ratios, comparison to other companies in a specific industry or location, fundamental analysis, etc.). Feel free to set the stage for your explanation; just make sure that you explain it to me.
1. Income Statement.
2. Balance Sheet.
3. Statement of Changes in Financial Position.
4. Statement of Retained Earnings.
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.