Financial statements can provide a wealth of information about a given organization. These statements provide information about the company’s financial position, cash flows, operations, performance and changes in the financial position. This information may be used as part of the decision making process for employees, shareholders, investors and competitors. Based upon these financial statements, key ratios are used to provide additional insight as to the financial health of a given company. Being familiar with financial statements can increase financial literacy. For this discussion, Citigroup’s (Citi) financial statements will be reviewed.
I chose Citi because as an employee, I want to know that my employer is financially solvent. For example, in October 2014 GT Advanced Technologies went bankrupt after signing a lucrative multi-year deal with Apple. On October 3rd the shares closed at $11.05 and dropped to $0.80 on October 6th (Williams, 2014). In reviewing the financial statements, I can boost my financial intelligence and gain more insight as to where Citi’s money comes from, where it went, and where it is now. In conducting financial statement analysis, the statements reviewed are the income statement, balance sheet, and statement of cash flows. The income statement shows how much money Citi made and spent over a period of time. It shows the cost of expenses associate with earning revenue. For example, Citi’s net income for 2015 was $17.2MM (Citigroup, 2016). In comparing this over the past four years, the net income shows fluctuations and that 2015 had the highest net income since 2011. Citi’s operating margin for 2015 was 33.39% which means for every dollar of sales, 33% of it was profit (Yahoo ...
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... and changed its mix of businesses and assets (Citigroup, 2016). It is important to note, that within the financial services industry, many banks have struggled to comeback from the financial crisis in 2008- 2009. Citi’s financial statements is evidence of its efforts to regain momentum despite the negative impact of its Banamex scandal.
My recommendations for continued success for Citi is to stay true to our mission which is to “serve as a trusted partner to our customers and clients by responsibly providing financial services that enable growth and economic progress” (Citigroup, 2016). This speaks to the company’s commitment to its employees, shareholders, clients and the communities we serve. US News and World Report ranked Citi as one of the top ten banks of 2016 (Sisolak, 2016). More evidence that Citi is on the right track to recovery and increase potential.
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