Review of Financial Statements Paper

1374 Words6 Pages
Review of Financial Statements Paper The following financial comparison of two publicly traded companies, Whole Foods Market Inc. and Target Corporation, will enhance the understanding of the proposal presented for a possible corporate acquisition presented to our company. This presentation will present the possible acquisition of Whole Foods Market Inc. by Target, Inc. Both companies are industry based organizations. Whole Foods Market Inc. brings financial strength to an already financially stable Target. An overview of both company’s financial statements and the accompanying information presented by the independent auditors will provide an understanding of the current financial status. A deeper analysis of the all financial statements…show more content…
The statement of cash flow showed the cash from investing activities was negative in 2004, 2006, and 2007 and in March 2008. 2005 was the only year the numbers were positive. The accounting firm that audited the financial statements was Earnest & Young LLP. Financial Statement Concepts, Terminology and Transactions The four main financial statements represented above for Whole Foods Market Inc. and Target Corporation represent a large amount of financial information. Once the statements have been identified, the accounting cycle consists of four steps: analyzing the transaction, record the effects of the transaction, summarize the effects of the transaction and prepare the reports. The balance sheet reports the resources of the company with three main components broken down into an algebraic equation (assets = liabilities + owner equity). The income statement reports the amount of net income earned by a company during a specific time. The net income is an excess of revenue over expenses. The statement of cash flow reports the amount of cash collected and paid out by a company in the following three ways: operating, investing, and financing (Albrecht, Stice, Stice, and Swain, 2008). The first step in is to analyze the transaction for example, the company will borrow $100,000 to replenish its inventory. The next step is to record the effects which will shown in two accounts. An account is an accounting record where results of transactions are
Open Document