Financial Statement Review

ACC/561 Version 5

University of Phoenix Material

Financial Statement Review
What is the net income for the current fiscal year? Is it up or down from the prior year?
Why would this information be important to investors?
McCDonalds Net Income for theyear 2014 is $4,747.80. In 2013 the net income was $5,585.90.
For 2014 the net income was down by $838.1. This means it is down by 15% in 2014. The
dollar amounts are in millions.

The net income is important to investors because theyu want to know the profitability of the
past and current years. They would used this information to decide whether to buy or sell their
stock. Investors commonly look at a company's profitability history to assess the risks of
investing in such company(Avenir, n.d).

The Consolidated Income Statement for McDonalds has the following sections that are
extremely important for investors:
1. Earnings per share
2. Dividends
3. Average Shares Outstanding

What is the ending balance in stockholders equity? Why would a labor union potentially be
interested in this information?

The 2014 ending balance of McDonalds $12,853.4. In 2013 the ending balance is $16,009.7

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Financial Statement Review

ACC/561 Version 5

and then in 2012 the ending balance is $15,293.6.

The unions are always looking for the best interest of the employees. Labor unions, such as the
Major League Baseball Players Association, want to know whether the owners have the ability to
pay increased wages and benefits(Kimmel, 2011 pg. 57).

The financial statements could have a extremely important during a collective bargaining. The
financial statement would aid the employers and employees to reach an agreement. This financial
statement would show the Union if the company can fulfill the request of the employees.

What is the total value of assets? Why would this information be important to a potential
creditor?

The total values of assets for 2014 is $32,281.4 and 2013 $36,626.3. 2014 is down form 2013.
The difference is $4344.9.

Creditors would want to know if a company is able to pay them. The creditors would want to
know where the money is coming from and where it is going. The creditors would look at the
assets. The assets would be used to pay back any loan from creditor. The main assets that they
would look at is the cash or liquid assets. These type assets would show the creditor that the
company can pay off any loan or debt.

Copyright 2013, 2011, 2009, 2008 by University of Phoenix. All rights reserved.

Financial Statement Review

ACC/561 Version 5

What is the total cash flow from operation? What financial statement user would find this
information most important?

The total cash flow from operations 2014 $6,730.3, 2013 $7,120.7 and 2012 $6,966.1.
The financial statement is the investor because this statement gives the actual amount of money
that the ccompany generated The information is important because the investor would want to
know how well the company is doing.

The Link website that I used and got the financial Statement is:
Sec Filing Form 10-K Retrieve from
http://www.aboutmcdonalds.com/mcd/investors/sec_filings.html

Copyright 2013, 2011, 2009, 2008 by University of Phoenix. All rights reserved.

Financial Statement Review

ACC/561 Version 5

Reference
Avenir, R. (n.d) Importance of Net profit Retrieved from
http://smallbusiness.chron.com/importance-net-profit-54572.html
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Accounting: Tools for business decision
making (4th ed.). NJ: John Wiley & Sons

Copyright 2013, 2011, 2009, 2008 by University of Phoenix. All rights reserved.