Discussion: Would You Invest?
If you had to make an investment decision right now, such as whether to put $1,000 into one of three companies, it would be helpful if you could rely on more than your personal feelings or sentiments toward a company. As illustrated in this week’s Learning Resources, financial statements help provide that additional insight into a company’s financial health. These statements will not be useful to you, however, if you do not know how to interpret them and understand the implications of what the numbers represent. Interpreting financial statements can be as much of an art as a science because analysts may interpret the data differently depending on their goals and outlook. In this Discussion, you will locate a publicly traded company, review its financial statements, and determine if investing in the company is a good or bad decision.
To prepare for this Discussion:
- Visit the Nasdaq Company List at http://www.nasdaq.com/screening/company-list.aspxand locate a public company of your choosing. Select the company’s page and scroll down to the Fundamentals section of the navigation menu. Click on Income Statement.
- Review the company’s Income Statement, Balance Sheet, and Operating Cash Flow for the periods listed.
- Take note of any trends, whether positive or negative. Year over year, has the company performed well? Do you note any risks or areas for concern?
- Review the Academic Writing Expectations for 2000/3000-Level Courses, provided in this week’s Learning Resources.
By Day 3
Post a 75- to 150-word (1- to 2-paragraph) description of your selected public company’s financial outlook based on the financial statements you reviewed. In your description, include the following:
- A link to the company’s NASDAQ page, as well as the name and stock symbol
- A brief explanation of whether you would invest in the company based on the financial trends you observed (Note:You do not need to provide detailed financial data in your response; focus instead on overall trends year over year for the periods listed.)
- To support your response, be sure to reference at least one properly cited scholarly source.
By Day 5
Respond with at least 75 words (1 paragraph) each to two or more of your colleagues’ postings by doing one of the following:
- Lend support for your colleague’s reasoning as to why he or she would (or would not) invest in the selected company.
- Provide an alternate perspective based on the financial data you observed.
Return to this Discussion in a few days to read the responses to your initial posting. Note what you have learned or any insights you have gained as a result of the comments your colleagues made.