How do you response to the following discussion post from a classmate. Please pr

Question

How do you response to the following discussion post from a classmate. Please provide support and reference. Thank you for your time and understanding!

What kinds of financial information exist in various places?

There are four core financial statement that could be found is most places; however, there are many types of users (Ross, Westerfield, & Jordan, 2013). Stating this week, I learned that are many different ways of practice depending of what type of business and what financial information data will be deliberate from this reports. The fundamental financial statement are the (1) balance sheet, (2) income statement, and (3) retained earnings statement, and (4) cash flow statement (Walther, 2010). The importance of financial statements is the actual data documented from a particular organization that is communicated internally and externally entities.

- Balance sheet describes: Assets, Liabilities and Equity

- Income Statement describes: Income, Expenses and depreciation (depreciation not an expense)

- Cash Flow Statement describes: Operating, Investing, and Financing activities

- Retained Earnings Statement describes: Changes of Net Profit, capital, and dividends (Ross, Westerfield, & Jordan, 2013).

What is the difference between information found on the internet and other sources of information?

Information found on the Internet is limited and displayed a fragment of the facts. They are other reliable financial search engines such as Google, financials.com, money. msn and Yahoo access are more adequate. With other sources of information we can compare and evaluate data, the more data the better assessment we can conclude since a minor market value information exist.   

What source of information that you found in your research do you find most helpful?

The “Work the WEB boxes” has been most helpful in researching and displaying how financial information relate to a specific company. These sites showed me how the financial data is utilized and reveal the way business made-decisions based in financial data. The questions section also help tremendously. For example, investigating McDonal’s corporation ratios, earnings, financial statements, and how the company currently performed in base of ratios.

How does a website like Yahoo finance help you perform ratio analysis?

I had never interact with yahoo finance website before, my iPhone has been my main source of information when it comes to the stock market. At the beginning, it was overwhelming since exposed a lot of data. Most of the ratio analysis was generally given under the “statistic tab” and easy to recognize. The financial statements were ready available under the “financial tab” and well-presented with extra information that we aren’t cover yet. I was able to calculate ratios without doubt, the website is very helpful!    

Reference:

Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2013). Fundamentals of Corporate Finance (10th ed.). Irwin: McGraw-Hil

Walther, L. (2010, March 06). 1 - The Four Core Financial Statements. Retrieved from https://www.youtube.com/watch?v=7BAcIA5qpEM

Explanation / Answer

On the basis of the limited knowledge I posses, my views on the questions is provided below. Hope it helps.

1. As far as sources of financial information are concerned, the annual reports of the companies help a lot. The companies publish their annual reports with almost everything explained in detail in its annual reports. The balance sheet, income statement ,cash flow statement ,the auditors report are all present in the annual report of the company. With the help of which you can understand the shareholding pattern, reserves , dividend details, loaned capital and every possible liability it owes. Similarly the assets will have all the details of assets the company hold at the end of that year. Profits of the company can be understand by looking at the income statement. It will be useful to check the notes section of each category to have a better understanding of the final figure states in the balance sheet or the income statement. Shareholders usually receive a hard copy of the annual reports and soft copied are published in the company websites itself.

2. I dont exactly know if there will be any difference in the information provided on internet and other sources of it as far as far as financial information is concerned. Use the company website or trusted websites to collect data because accuracy and reliability of such data will be more. If in case you are using information published on internet which are results of some research work, I feel you must first analyse it for yourself before copying and using such result. On the other hand other sources being newspapers, journals ,magazines are really useful and are generally of better quality.

3. In one of my projects (not really a big research) I used data from Yahoo finance and it came to me more handy than any other source. I had to collect share prices for 5 companies for past 5 years, and yahoo finance was the best thing to use as it would have been foolish of me to look into newspapers for the closing prices.

4. I have taken historical data from yahoo finance and taken help to do technical and fundamental analysis however have no experience in ratio analysis. In the site i could find in statistics of the company searched, its return on assets etc., And in financials the income statements etc.

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