The Role of Financial Statements in Business Decision Making [WLOs: 1, 2, 3] [CLOs: 1, 2]
 

Prior to beginning work on this discussion, please read the articles: Researching Public Companies Through EDGAR: A Guide for InvestorsLinks to an external site., the Beginners' Guide to Financial StatementLinks to an external site. from the Security & Exchange Commission (SEC) and the 12 Things You Need to Know About Financial StatementsLinks to an external site..

• • If you are thinking of purchasing Amazon.com's (NASDAQ: AMZN) stock, or any stock, how can you decide what the stock is worth?
• • If you manage Apple's Inc. (NASDAQ: AAPL) credit department, how should you decide whether to extend a new client's credit limit?
• • If you are a financial executive of Sony Corp (NYSE: SNE), how do you decide whether the company should employ aggressive capital investments in global business areas?

After assessing the above situations, discuss the role of the income statement, balance sheet, and stockholders equity in business decision making to formulate plans & policies, shareholding, expansion of credit, investment decisions, and taxation.