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Analyzing Financial Statements for Planning and Cost
Deliverable Length: 700 – 1000 words (not including title page and references)
Assignment Description:
You have recently hired a new assistant, Susan Thompson, who previously worked in a financial accounting office preparing journal entries, which provide you with a recording of the day-to-day activities of the company and financial statements (income statement, statement of owners’ equity balance sheet, and cash flow statement). Although your new assistant has experience with and fully understands financial accounting, she has no experience with managerial accounting.
Part 1
In a memo to your new assistant, Susan Thompson, complete the following:
oKeep in mind that although the income statement, the statement of owners’ equity balance sheet, and the cash flow statement are generated in financial accounting, they are used to develop all of your managerial accounting reports.
oExamples of a few of those reports are the horizontal analyzes, vertical analyzes, and ratios.
Part 2
In a memo to the board of directors, discuss the information found in each of the following financial statements, and describe how accounting information is used by managers for planning and control: