Question

1.11. Writing Skills Problem Staff members from the marketing department of your firm are doing a splendid job selling products to customers. Many of the customers are so pleased, in fact, they are also buying shares in the company's stock, which means that they receive a copy of the firm's annual report. Unfortunately, questions sometimes arise that the marketing staff members are woefully inadequate at answering. Technical questions about the firm's financial condition and performance are referred to the chief financial officer, but the director of marketing has asked you to write a memo in which you explain the key elements in an annual report so that marketing rep- resentatives are better prepared to respond to questions of a more general nature. Required: Write a memo no longer than one page (single-spaced, double-spaced between paragraphs) in which you describe the contents of an annual report so that marketing personnel can understand the basic requirements. The memo should be dated and addressed to B. R. Neal, Director of Marketing, from you; the subject is "Contents of an Annual Report." To the Student: In business writing, the primary elements are clarity and conciseness. You must keep in mind the audience you are addressing and the objective of the communication,

Answer 1

Answering for 1.1.

Types of questions that can be answered by analyzing financial statements are:

a) The amount of risk present in an investment or a company

b)Liquidity strength of the company/investment.

c)Will the investment be able to generate wanted returns.

d) Are cash flows of the investment/firm good enough to sustain it.

e)Are there future growth opportunities present in the firm

f)Is the firm a good prospective customer

g)How long in the future is the firm estimated to survive

h)Whether it's better than it's competitors or not.

i)Is the firm in par with the industry, or is lacking behind.