WEEK 8 – FINANCE IN BUSINESS ACTIVITY
Finance in Business Activity
Instructions
Note: Watch the Excel tutorial videos linked in this week to learn how to use Excel before attempting the activity. You can use the template provided or you may create your template based on the one provided.
Complete the following scenario using the templates provided:
1. Select one US. publicly traded company and review its most recent annual report (You may use one of the three companies you selected for your Stock Journal assignment )
Use the Week 8 Finance in Business Excel Template [XLSX] provided to report assets, liabilities, equity. revenue, and net income for your selected company
2. Determine changes in assets, liabilities, and equity
3. Determine changes in total revenue and n
4. Describe the changes from the current and prior years in each of these key areas and whether the changes would be positive or negative from an investor stakeholder’s view.
Week 8 FINANCE IN BUSINESS ACTIVITY
After studying the most recent annual reports of U.S. publicly-traded company Tesla Inc. Some changes can be observed from the annual reports. Changes year over year are discussed below:
Change in assets- There has been a decrease in assets i.e. in 2019 Tesla Inc.’s asset was $6,602 and in 2020 it decreased to $5,151. Assets are the property of the business, They give future economic benefits to the company and also help in the growth of the company so this change is negative as it decreased in the most current year compared to the last year(Bos & Gupta, 2019, p.56).
Change in Liabilities:
There is a decrease in liabilities as it can be observed that last year (2019), the liability of the company was $2,575 and in 2020 it decreased to $2,418. Liabilities are debt for the company. Liabilities can be cause for future cash outflows from the income that is expected to be earned in the future for repaying the debt and interest. So decrease in liability is a positive.
Change in Equity:
There has been an increase in shareholder’s equity. In the year 2019, the company’s equity was $6,618 and in 2020 it increased to $22,225. The percentage change in shareholder’s equity is 253.83%. Equities are the net worth of the company so an increase in equity is positive (Lileikiene & Likus, 2011, p.15).
Change in Total revenue: There has been an increase in total revenue. In 2019 total revenue was $24,578 and in 2020 it increased to $31,536, there is an increase of 28.31% in total revenue. Total revenues are the money generated from the sale of goods. So an increase in revenue is positive.
Change in Net income:
There is an increase in Net income. In 2019 the net income of the company was $775 and in 2020 it increased to $862. That is an 11.23% increase in the net income of the company. Net income is the total earnings on sale. So increase in net income is positive (Lahey & Doseong, 2001,p.19).
From an investor’s point of view, the overall changes are positive and it seems profitable in the near future so the investor should invest in the company,
Reference List:
Bos, K., & Gupta, J. (2019). Stranded assets and stranded resources: Implications for climate change mitigation and global sustainable development. Energy Research & Social Science, 56, 101215.
Lahey, Karen Eilers; Doseong Kim. Financial Services Review. 2001, Vol. 10 Issue 1-4, p55. 19p. 6 Charts. DOI: 10.1016/S1057-0810(02)00100-2.
Lileikiene, Angele; Likus, Aurimas. Engineering Economics. 2011, Vol. 22 Issue 3, p241-254. 14p. DOI: 10.5755/j01.ee.22.3.514
