Expert answer:InstructionsThis case study will ask you to analyze the use of financial statements in the decision-making process.First, interpret the functions of the financial balance sheet in assisting in management’s decision-making process. How is the balance sheet related to the income statement?Next, in an example, discuss the details and the major components and activities of the statement of cash flows. Lastly, discuss how you would use the statement of cash flows in decision making.For additional details, please refer to the Case Study Two Guidelines and Rubric document.
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FIN 685 Case Study Two Guidelines and Rubric
Financial statements are important in the financial decision-making process. That balance sheet lists what a company owns and owes and is therefore used to
establish a company’s financial standing. The statement of cash flow is used to track the different cash inflows and outflows. In this case study, you will analyze
the function of the balance sheet as well as the statement of cash flows of a real-world company.
Prompt: Locate an example of a statement of cash flow. You may use Yahoo! Finance to help you in locating an example. Type in the name of a company in the
search bar at the top of the page and click Search Finance. In the light blue menu bar on the left-hand side of the screen, locate Financials. Then click on the link
to Cash Flow to download the statement.
Using the example statement of cash flow, discuss the details and the major components and activities of the statement of cash flows. Also, discuss how you
would use the statement of cash flows in decision making.
Specifically, the following critical elements must be addressed:
I.
Balance Sheet
a) Interpret the function of the balance sheet in management’s decision-making process.
b) Discuss how the balance sheet is related to the income statement.
II.
Cash Flows
a) Discuss the major components of the statement of cash flows.
b) Discuss the major activities of the statement of cash flows.
c) Discuss how you would use the statement of cash flows in decision making.
Rubric
Guidelines for Submission: Your paper must be submitted as a 2-page (maximum) Microsoft Word document with double spacing, 12-point Times New Roman
font, one-inch margins, and at least 2 sources, in addition to the textbook, cited in APA format.
Critical Elements
Balance Sheet:
Decision-Making
Process
Exemplary (100%)
Meets “Proficient” criteria and
interpretation is
comprehensive and references
course readings or other
academic sources
Meets “Proficient” criteria and
discussion is particularly
comprehensive and references
academic sources
Meets “Proficient” criteria and
descriptions are particularly
comprehensive
Meets “Proficient” criteria and
descriptions are particularly
comprehensive
Proficient (90%)
Interprets the function of the
balance sheet in
management’s decisionmaking process
Needs Improvement (70%)
Interprets the function of the
balance sheet but lacks detail
Not Evident (0%)
Does not interpret the
function of the balance sheet
Value
18
Discusses the relation of the
balance sheet to the income
statement
Discusses the relation of the
balance sheet to the income
statement but lacks detail
Does not discuss the relation
of the balance sheet to the
income statement
18
Names and describes the
major components of a
statement of cash flow
Names and describes the
major activities of a statement
of cash flow
Names and describes major
components but descriptions
lack detail
Names and describes major
activities but descriptions lack
detail
Does not name or describe
major components
18
Does not name or describe
major activities
18
Cash Flows: Use in
Decision Making
Meets “Proficient” criteria and
uses course readings to
support discussion
Discusses the statement of
cash flow’s use in decision
making
Discusses use in decision
making but discussion lacks
detail
Does not discuss use in
decision making
18
Articulation of
Response
Submission is free of errors
related to citations, grammar,
spelling, syntax, and
organization and is presented
in a professional and easy to
read format
Submission has no major
errors related to citations,
grammar, spelling, syntax, or
organization
Submission has major errors
related to citations, grammar,
spelling, syntax, or
organization that negatively
impact readability and
articulation of main ideas
Submission has critical errors
related to citations, grammar,
spelling, syntax, or
organization that prevent
understanding of ideas
10
Balance Sheet:
Relation to Income
Statement
Cash Flows: Major
Components
Cash Flows: Major
Activities
Earned Total
100%
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