Order Instructions
Directions
Write a brief journal that introduces the business you chose for your Project Two assignment.
Specifically, you must address the following rubric criteria:
• Business Selection: Describe the business you chose, including the business name and what the business offers consumers. Johnson &Johnson (JNJ) is my selection of Business
• Financial Statements: Using Mergent Online, download and submit a copy of the balance sheet, the income statement, and the cash flow statement from the most recent fiscal quarter for the business you chose. (See attached spreadsheets)
• Financial Statement Role: Explain why financial statements are important to a business and how they help businesses determine their financial health.
• Cash Flow Management: Explain why cash flow management is important to a business and its financial health. Use a financial news story from the past two months as an example to support your claims.
What to Submit
Your journal submission should be a 3- to 4-paragraph Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Any sources should be cited according to APA style. Also submit the Excel files for your chosen business’s balance sheet, income statement, and cash flow statement from Mergent Online.
SAMPLE ANSWER
For my Project Two assignment, I have chosen Johnson & Johnson (JNJ), a multinational corporation that develops, manufactures, and sells a wide range of healthcare products, including pharmaceuticals, medical devices, and consumer health products.
Financial Statements:
Using Mergent Online, I have downloaded the balance sheet, income statement, and cash flow statement from the most recent fiscal quarter (Q4 2021) for Johnson & Johnson, and have attached the spreadsheets.
Financial Statement Role:
Financial statements are crucial for any business as they provide a snapshot of a company’s financial performance and position. They allow businesses to assess their profitability, liquidity, and solvency, and make informed decisions about their future operations, investments, and financing. For investors and stakeholders, financial statements provide critical information about a company’s financial health and potential risks and rewards.
Cash Flow Management:
Cash flow management is vital for a business as it involves managing and monitoring the cash inflows and outflows to ensure that the company has enough cash to meet its obligations and fund its operations. A lack of cash flow can lead to serious problems, including missed payments, increased debt, and ultimately, bankruptcy.
For instance, a recent financial news story highlights the importance of cash flow management. In February 2023, a popular fast-food chain in the United States had to temporarily close several of its locations due to a cash flow problem. According to reports, the company was struggling to pay its vendors and had insufficient cash reserves to cover its expenses. As a result, the company had to close its stores and was forced to seek emergency funding from investors. This example demonstrates the critical role of cash flow management in ensuring a business’s financial health and success.
In conclusion, financial statements and cash flow management are essential components of a business’s financial health. By monitoring their financial statements and effectively managing their cash flow, businesses can make informed decisions and ensure that they have the resources to sustain their operations and grow in the future.