Financial Analysis Essay

A company’s creditworthiness, accuracy of their tax returns, and profitability can be determined through an analysis of their financial statements. Financial statements utilized to make long-term decisions by performing financial analysis to further understand their performance/disposition as well as to examine their financial health. Managers and investors review financial statements such as the income statement, the balance sheet, the cash statement of cash flow and the retained earnings statement. All four of these financial statements are inter-related and serve of great importance in making rational financial decisions by the managers of the company, investors, and creditors. Financial statements enables business leadership to analyze various investment opportunities/projects facing a company and to give department heads an understanding on how to meet the objectives. In addition, company principals sift through financial statements to choose competent business partners with whom they can work and make money for the business (McGraw-Hill, Financial Statements and Business Decisions Chapter 1, 2010, p #3, para #1) . The use of financial statements serve as a key factor in helping companies establish the performance as well as the future potential for the company (Using Financial Statements for Decision Making http://weebly.com/using-financial-statements-for-decision-making.html). Financial statements are another form of communication for managers, investors, creditors, and their competitors concerning the company’s overall financial well-being. A company’s financial statements also reflect the history in the financial information of the entity. The financial history is still important because in order to solve a p...

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...rent new products and open up new markets with stronger business practices.

If I were to encourage people to invest into this company I would start off by self-promoting the company by using effective marketing skills/suggestive selling. I would go out and execute demonstrations on the products that the company is trying to sell or pass out brochures which will give the potential investors a walk through about the company’s values and its goals. I would come up with a well-developed business plan and present it to potential investors explaining how I intend to make the company profitable. In addition, I would include the company is going to manufacture the product, how fast the company will become profitable and what will be the investors return. The more creative I am in ideas and the information I can provide, most likely the company will receive investments.