We started this module by learning about the accounting equation: Assets = Liabilities + Owners Equity. This provides the basis for analyzing and recording transactions, as well as the preparation of reports referred to as financial statements. These statements help the company management, owners, and creditors determine its success.

To complete this assignment, pick one of these companies: Chevron, General Motors, or Procter & Gamble, and explore their website to answer each of the below questions. Your starting point should be to locate the financial statements for your chosen company which will be included in their "Annual Report" and "Form 10-K" which are usually found in the Investor Relations section of their website. Form 10-K is also available in the Securities Exchange Commission (SEC) company filings database by entering the company name in the indicated field.

To determine the financial performance of your selected company, provide a separate, numbered response to correspond to each of the following items:

1. Analyze the company's income statement for the past three years. Identify the trend (i.e. increase or decrease) demonstrated by total revenue, total expense, and net income (or loss) for this time period. Also identify any major increases or decreases within the revenue and expense sections (if any). Cite numbers or percentages to support your response.
2. Analyze the company's balance sheet for the past two years. Identify the trend (i.e. increase or decrease) demonstrated by total assets, total liabilities, and total owners equity for this time period. Also identify any major increases or decreases within the asset and liability sections (if any). Cite numbers or percentages to support your response.
3. Based on your analysis of the income statement and balance sheet, discuss any areas of concern. Do you believe the company is currently in a strong financial position or heading into trouble? Support your reasoning.
4. Describe how the financial statements that you evaluated impact internal and external stakeholders. For example, how would this information be used in your company by its management and executives? Also, who on the outside of the company would be interested in this information and how would it impact them?
5. Assume that the Controller at your selected company told you that the Profit Margin increased from 15% last year to 17% this year. Describe what the Profit Margin is and how it is determined. Indicate if the company's results are good news or bad news. If the Controller would like to target a 20% Profit Margin for next year, what needs to occur in terms of the company's performance?
6. During the same conversation with the Controller in the previous question, you learned that the Current Ratio increased from 3.0x last year to 3.5x this year. Describe what the Current Ratio is and how it is determined. Indicate if the company's results are good news or bad news. If the industry standard for a similar company is 4.0x, what changes would your company need to make in order to achieve this level for it's Current Ratio as a target for next year?