Week 2 Discussion
Balance Sheet Analysis
discussion questions for Weeks 2 – 4 are designed to help teach you to
derive meaning from financial statements. Each week you will select a
line item and use Variance Trend Analysis to make some initial
assessments about how the company is performing. Collectively, as a
class we will seek to find the “story behind the numbers.”
Let’s start applying what you have learned to a real-life Balance Sheet.
and post a screen shot of a Balance Sheet from the investor relations
section of the website from the latest fiscal year for one of the
- Pick a Balance Sheet line item from the following list:
- Accounts Receivable
- Property, Plant, and Equipment (PP&E)
- Accounts Payable
- Long-Term Debt
- Total Equity
- Retained Earnings
- What does this line item measure and why is it important item for Management to understand this number?
the Balance Sheet, identify the Current Year and the Previous Year
closing amounts for your line item. Share these with the class using a
data table similar to the below:
Jack’s Toy Shop
- Answer the following questions:
- Has the amount for the line item increased or decreased, and by how much (dollar and/or percentage)?
- Is this a “good” thing or a “bad” thing for this company?
- What might this mean for the organization?
- What might management do to improve this line item?