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CCC2 CONTINUING COOKIE CHRONICLE
(a) The balance sheet reports the assets, liabilities, and stockholders’
equity of a company at a specific date. The income statement presents
(b) By looking at the balance sheet and the cash flow statement and
calculating liquidity ratios we can measure a company’s short term
ability to pay its obligations. Liquidity ratios include the calculation of
(c) By looking at the balance sheet and the cash flow statement and
calculating solvency ratios we are able to measure a company’s ability
(d) By looking at the income statement we can determine if Biscuits is
profitable. If revenues earned by Biscuits exceed expenses incurred,
then Biscuits is profitable. Profitability ratios can measure a company’s
(e) By looking at the balance sheet we can determine if Biscuits has any
debt. By looking at the balance sheet and cash flow statement and
calculating solvency ratios we are able to determine whether a company
CONTINUING COOKIE CHRONICLE (Continued)
(f) By looking at the statement of cash flows we can determine whether
Biscuits has paid any dividends to its shareholders.
(g) Be aware that financial statements of Biscuits provide a historical
perspective of what has already taken place. The financial statements
may prove to be a good indicator of what will happen in the future but
