Question

What four financial statements are contained in most annual reports? Who are some of the basic users of financial statements, and how do they use them?
If a “typical” firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without having any qualms about what they were doing? Explain your answer.   Explain the following statement: Although the balance sheet can be thought of as a snap- shot of a firm’s financial position at a point in time, the income statement reports on operations over a period of time.

Answer 1