Financing and Investing

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Financing and Investing By: Marissa Woodring Introduction to Accounting Professor Genet August 12, 2009 Abstract I will be explaining what is important for each company to know about our financial statements here at Target. This way, my supervisor knows what to prepare for in an upcoming meeting with two companies that are willing to invest and finance with the Target Corporation. Financing and Investing Two companies are looking into working with the Target Corporation. One company is looking to invest and take part ownership over the company. The other company is willing to give out a loan for Target to expand its operations. My supervisor will soon be meeting with these companies separately and needs to know what he will…show more content…
For this, we’d have to show them our balance sheet. The balance of cash needs to be growing over time to prove that we are not in trouble. Company #2 If we take out a loan, we have to prove to this company that we can and will pay them back. This company’s most important question will be if we can prove we are currently paying back all our debt. We have to look at our income statement, statement of cash flows, and balance sheet to prove this. We look to our income statement to prove that we have an increase in the trend of net income. This will give them a certain look at how much our company is bringing in after subtracting all our losses and expenses. Next, we show our statement of cash flow, to prove, yet again, that operating activities are our main source of cash. Last but not least, we look at the balance sheet. We have to show our current ratio and our debt ratio. The debt ratio says it all, it shows just how much our Corporation is currently in debt, and can also show this companies long term solvency. “The current ratio is an excellent diagnostic tool as it measures whether or not your business has enough resources to pay its bills over the next 12 months” (Ward, n.d.). If we don’t have enough money to pay our bills, then what is the point in these companies investing and financing with us? They would get nothing out of it. As you can see, there is a lot these companies have to look at before they
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