A firm's management analyzes financial statements so that:
A) they can get feedback on their investing, financing, and working capital decisions by identifying trends in the various accounts that are reported in the financial statements.
B) similar to shareholders, they can focus on profitability, dividend, capital appreciation, and return on investment.
C) they can get more stock options.
D) Both a and b

Question

Quizplus · Accepted Answer

Management analyzes financial statements to get feedback on their investing, financing, and working capital decisions by identifying trends in the various accounts that are reported in the financial statements, and to focus on profitability, dividend, capital appreciation, and return on investment, similar to shareholders. This helps them make better decisions for the company and improve its financial health. Getting more stock options is not a primary reason for analyzing financial statements.

A Firm's Management Analyzes Financial Statements So That