FINAL QUESTIONS CLARIFICATIONS

Q1. What is meant by the term "finance" as it was used in this course?

KEEP IN MIND THAT A ONE TO TWO SENTENCE ANSWER WILL BE DEEMED AS AN UNDERGRADUATE RESPONSE. YOUR ANSWER SHOULD TELL ME WHAT YOU LEARNED IN THIS COURSE. SEE Merrill Lynch Response Center. How to Read a Financial Report.{The Google Sites page).

1.1 Define the term "financial statement" and, provide a copy of a financial statement from a company (a printout of a balance sheet and an income statement from Google Finance. Yes, the terms have to be defined and described).

NOTE THAT YOU WERE EMAILED A COPY OF "Merrill Lynch Response Center. How to Read a Financial Report". THAT OR THE BOOK WILL HELP YOU.

1.2 What is meant by the term "historic perspective" as it relates to a financial statement? Provide a copy of such a perspective from Google Finance.

-> IN GOOGLE FINANCE, SELECT YOUR FIRM (NEXT TO THE "GET QUOTES" BUTTON AT THE TOP LEFT).

-> TYPE IN THE NAME OF THE FIRM THAT YOU WANT TO GET THE FINANCIAL STATEMENT FOR.

-> LOOK AT THE LEFT COLUMN CALLED "COMPANY" AND SELECT "FINANCIALS"

-> SELECT THE "INCOME STATEMENT" TAB. COPY AND PASTE IT INTO AN MS EXCEL SPREADSHEET AND FORMAT IT AS APPROPRIATE.

->SELECT THE "BALANCE SHEET" TAB. COPY AND PASTE IT INTO AN MS EXCEL SPREADSHEET AND FORMAT IT AS APPROPRIATE.

->SELECT THE "CASH FLOW" TAB. COPY AND PASTE IT INTO AN MS EXCEL SPREADSHEET AND FORMAT IT AS APPROPRIATE.

-> NOW THAT YOU HAVE SOME HISTORICAL INFORMATION ON THE COMPANY'S BALANCE SHEET, INCOME STATEMENT AND CASH FLOW, STATE HOW, FROM YOUR PERSPECTIVE, HAS THE COMPANY PERFORMED? THIS IS NOT A TRICK QUESTION. YOU MUST TAKE THE FINANCIAL DATA AND INTERPRET IT FROM A FINANCIAL PERSPECTIVE IN PLAIN ENGLISH.

-> HOW WOULD YOU EXPLAIN THE COMPANY'S PERFORMANCE FROM A FINANCIAL PERSPECTIVE? DO NOT EXCEED A PAGE.

1.3.1 Present a Simple Balance Sheet as depicted in Figure 2-1

->FROM YOUR FINANCIAL STATEMENT, FILL IN THE TITLES AND TOTALS FROM THE BALANCE SHEET WITHIN THE BOXES TO MAKE THE BALANCE SHEET EQUATION "TOTAL ASSETS = TOTAL LIABILITIES' FOR THE MOST CURRENT AS OF DATE.

1.3.2 Depict the % of total sales as depicted in Table 2-2

->CALCULATE FROM SPREADSHEET

Q2. What is an investor, an investment and where does an investment appear within the financial statements?

-> INCOME STATEMENT ON YOUR SPREADSHEET.

-> SELECT "3 MONTHS ENDING" (COLUMNS) FOR:
- THE MOST CURRENT DATE - A YEAR PRIOR TO THE CURRENT DATE

-> CALCULATE YOUR PERCENTAGES. NOTE THAT YOU WERE NOT ASKED TO "INTERPRET" ANYTHING.

Q2.1 How do investors use financial statements (e.g. what is some of the information that investors "glean" from financial statements?

-> TIE YOUR ANSWER TO THE SPREADSHEET YOU HAVE CREATED TO PROVIDE 'REAL WORLD CONTEXT".

Q2.2 Where (be specific) would an investor find this information from the financial statement that you used from Google Finance in the prior questions?

->YOU ANSWER SHOULD REFERENCE YOUR SPREADSHEET.

Q3. From the financial statements you are using from Google Finance in the prior questions, what kind of debt is the company using?

-> FROM SPREADSHEET.

Q5.1 For the company whose financial statement you are using from Google Finance for the prior questions, how does its revenues relate to its operating costs and profits?

-> THE SPREADSHEET SHOULD IDENTIFY THIS. IF YOUR PRIOR ANSWER IS TOO 'TEXTBOOK" THEN YOU WILL HAVE TO DESCRIBE THIS IN GREATER DETAIL FOR THE COMPANY WHOSE FINANCIAL STATEMENT YOU ARE USING.

Q6.1 Where, in a company's financial statement, does the "rating" affect the company?

-> THE SPREADSHEET SHOULD IDENTIFY THIS. IF YOUR PRIOR ANSWER IS TOO 'TEXTBOOK" THEN YOU WILL HAVE TO DESCRIBE THIS IN GREATER DETAIL FOR THE COMPANY WHOSE FINANCIAL STATEMENT YOU ARE USING.

Q7. If an individual earns $25,000 a year and wants to save 5% of her pay, what would be the fiscal impact of opening a 401(k) versus and non-401(k) savings instrument?

-> PUT YOU ANSWERS ON A SPREADSHEET WITH THE PROPER FORMULAS AS THE DOCUMENT THAT WAS EMAILED TO YOU CONTAINS.