Question

1.) What types of questions can be answered by analyzing financial statements?

2.) What is the difference between an annual report and a 10-K report?

Answer 1

Answer 1:

We can answer the following by analyzing financial statements:
i) Whether an investment in the company will generate attractive returns.
ii) The degree of risk inherent in the investment of the company.
iii) Whether or not the existing investment holdings in the company be liquidated.
iv) Whether or not the cash flows be sufficient to pay off the interest and principal to support the firm's borrowing needs.
v) Whether or not a company provides a better opportunity for employment and future advancement.
vi) The financial position of a company.

Answer 2:

All publicly held companies file 10-K report with the Securities and Exchange Commission(SEC).

10-K
Components (in order) that we find in a 10-K report:
i) Business
ii)Properties
iii)Legal proceedings
iv)Submission of matters to a vote of security holders
v)Market for registrant's common equity and related stockholders matters
vi)Selected financial data...

Annual report
It contains four basic financial statements
i)Balance sheet (also known as statement of financial position)
ii)Income statement (also known as statement of profit and loss or the earnings statement)
iii)Statement of share holder's equity
iv)Cash flow statement