Accounting for Decision Making

Accounting for Decision Making

Step 1: Read Your Firm's Annual Report: Identify Clearly What Your Firm Actually Does

In this paper, annual report chosen is Gale Pacific. While scrolling and skimming through whole report I came across that sales seems to be declining from previous year and it shows that they face a downfall in sales. It is confusing in understanding with low sales yet profit is high that reveals that it is having less financial cost. It highlights every aspect which is required to be mentioned within financial statement. Its financial statement shows that it relies more heavily on equity which is good for companies as debt financing is more risky.

Similarity between Gale Pacific financial statements with other companies is that it also incorporates every aspect in Annual Report which is specified in companies. It also caters all those elements as required by accounting standards which are as follows:

Balance Sheet

Income Statement

Cash Flow Statement

Notes to the Accounts

Yes, I am satisfied with the company which is being assigned to analyze as it provides complete details and statistics required to analyze a report.

Step 2: Input your firm's latest annual report into your company's spreadsheet

Attached in excel file.

Step 3: The extended fundamental accounting equation and your firm

Extended Fundamental Accounting Equation

All assumption of accounting is contingent of the fundamental assumption of Assets = liabilities + owners' equity. All of these elements presumed to have their own special function within the accounting equation. In an accounting equation it is deemed to be balance both sides with each other. According to "Dunn & Bradstreet Credibility Group" (n.d.), there are three components that is Assets, liabilities and owners' equity which make it possible to develop a company's balance sheet. The balance sheet, which set up in order to reveals a business's financial ...