Devry BUSN115 Week 7 Homework

BUSN 115 Week
7 Homework
Review the following information found in Chapter 17 of the
textbook.

Figure 17.5, Very
Vegetarian—Balance Sheet, dated December 31, 2012
Figure 17.7, Very
Vegetarian—Income Statement, dated December 31, 2012
Figure 17.8, Very
Vegetarian—Statement of Cash Flows, dated December 31, 2012

You are contemplating investing in Very Vegetarian or possibly
purchasing the company outright. Based on this information, as well as the
financial statements provided in the textbook, answer the following questions in
a two- to three-page paper. Your paper should use APA style.
Why is it advisable to evaluate the company’s financial
statements? What key information would you seek to understand about the
financial statements? Why? (8 points)
It appears that Very Vegetarian financial statements follow a very
strict form. Why must accounting reports be prepared according to specific
procedures (GAAP)? Is it permissible for businesses to be allowed some
flexibility or creativity in preparing financial statements? Why? Why not? (7
points)
What value do financial ratios offer investors in reviewing the
financial performance of a firm? (8 points)
Why is it important to understand that financial ratios can differ
from industry to industry? (7 points)
Include APA style reference information as in-text citations and
at the end of your paper. (5 points)