BUS103: Introduction to Financial Accounting

5a. Locate public company financial statements and read and interpret financial statements

Corporations that sell their stock publicly are required to make their financial reports available to the public. Visit the website of the U.S. Securities and Exchange Commission and click on "Company Filings". Enter the name of any publicly-traded company to access the information they filed with the SEC. An annual report is called a 10-K. This is the 10-K for General Motors Company.

Item 8 of an annual report includes a company's financial statements and supplementary data. The data within item 8 provides the information from which you could determine the company's financial strength utilizing ratios. Calculate the equity ratio and the current ratio for General Motors. Then, find the 10-K for another company of your choosing, find Item 8, and calculate both ratios for that company.

Read about the availability of financial statements in Sources of Information on pages 467-469.

 

Unit 5 Vocabulary

Be sure you understand these terms as you study for the final exam. Try to think of the reason why each term is included.

• Comparative financial statements
• Horizontal analysis
• Liquidity
• Operating assets
• Trend percentages
• Vertical analysis
• Yield