Investor Information Financial Statements Are the Primary Essay

Investor Information

Financial statements are the primary way for an investor, creditor, and other financial statement users to evaluate a company's financial performance, financial stability, profitability, and net worth to determine whether putting investments in the company would provide profitability and adequate return on investments (Way, 2013). Financial statements are also a way for managers to communicate achievements in performance to potential investors and creditors. The various statements brings various information components in the determination of evaluating companies for potential investments.

In evaluating Apple, Inc., the Income Statement shows net income for 2012 at $41,733 million (Form 10-K, 2012), up from $25,922 million in 2011. The income statement reports sales, expenses, and profits or losses. This is important to an investor because it shows results from operations in how profitable a company has been for the particular period. By evaluating present results against past performance, investors can assess for uncertainty in cash flows.It also helps an investor evaluate for changes in operations, what caused the changes, and whether changes were justified.

Apple's stockholder's equity for 2012 ended at $118,210 million, up from $76,615 million in 2011 (Form 10-K, 2012). The stockholder's equity is the net worth of the company. Apple, Inc. is showing an increase in net worth from 2011 to 2012. This information is particularly useful to a labor union because it shows that Apple, Inc. has the ability to give adequate raises every year and ensure payment of benefits to labor union employees at Apple, Inc. A labor union may use this information to advocate for more benefits and higher pay for union employees employed at Apple, Inc.

Apple, Inc. is showing total assets for 2012 at $176,064 million, up from $116,371 million for 2011 (Form 10-K, 2012). This information is particularly useful to creditors because it.....