Question Details

Strength Of Financial Statements
Post a 200- to 300-word response that includes the following information:
 
o    Three strengths and three weaknesses in the financial statements 
o    Trends in net profit, debt ratio as a percentage of total assets, and debt as a percentage of total equity 
o    A review of 2- to 3-year trends and an analysis of positive and negative trends 
o    A confirmation of whether or not the company is discussing what it intends to do to correct negative trends

Strength of Financial Statements
On the basis of financial statements, the appropriate decision can be taken. 
Provides financial position of the company
The management can compere current financial statements with previous statements. 
Weakness of Financial Statements
The financialstatements can be manipulated, so the users of the financial statement can get be cheated. 
Sometimes, the financial statements cannot be untestable.  
It is very time consuming activity
The total net profit of the Microsoft Corporation was $14,569,000 in 2009. On the other hand, the net profit of 2008 and 2007 were$ 17,681,000 and$14,065,000. In 2009, the net income was less as compared to 2008 but high than 2007- net income. In 2008, the company earned more profit in comparison to 2007. But due to recession, the net income of 2009 of the company reduced. 

The debt assets ratio of the Microsoft Corporation was 4.05% ($3,746,000/$77,888,000) in 2009. In 2008 and 2007, there was not any long term debt in the company balance sheet.  Thus the long term debt was only in 2009. The debt equity ratio of the Microsoft Corporation was 6% (3746000/62382000). There was not any debt equity ratio in 2008 and 2007. The overall financial position of the company is sound. There is blend of negative and positive trends due to market fluctuation and volatility. By launching new products, the company can get advantage over its competitor.  Thus the company can earn more profits in coming years. 
	


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