471 Accounting and Financial Statements by statement. With Mary Pruitt, the firm's trusted senior finan cial analyst, by your side, you delve into the accounting state ments as never before. You resolve to "get to the bottom" of th firm's financial problems and set a new course for the future- a course that will take the firm from insolvency and failure financial recovery and perpetual prosperity. Discussion Questions 1. Describe the three basic accounting statements. What types of information does each provide that can help you evaluate the situation? Which of the financial ratios are likely to prove to be of greatest value in identifying problem areas in the company? Why? Which of your company's financial rati might you expect to be especially poor? 2. 3. Discuss the limitations of ratio analysis determine what expenses will be necessary to generate level of sales revenue. The second financial statement you need to create is balance sheet. Your balance sheet is a snapshot of your f clal position in a moment in time. Refer to Table 14.6 to a you in listing your assets, liabilities, and owner's enut The last finan ial l