Questions:
8-22. Kate Snow just retired from a career with Walmart, cashing out a sizable retirement fund at the time of doing so. To start a second career, she is looking at the possibility of buying three different businesses. She has three years’ historical financial statements for each business and has been pouring over the numbers. She was puzzled when she read the following statement in a book about small business financial management, “Be careful when looking at balance sheets to fully understand what you’re looking at. In some respects, balance sheets are very revealing, and in other respects they can be very deceiving.” What do you think the author of the book meant by that statement?
8-24. Jorge Martinez is thinking about buying an existing printing business and has been carefully studying the records of the business to get a good handle on its historical financial performance. Jorge heard that you are taking a class in entrepreneurship and asks you, “What suggestions do you have for me to make the best use of this financial information (i.e., three years of audited income statements, balance sheets, and statements of cash flow)?” What suggestions would you give Jorge for making the maximum use of the financial statements?
8-27. Suppose a colleague of yours is gearing up to write a business plan for a business she intends to start. She told you she plans to prepare the financial statements first to get that job out of the way before she tackles the rest of the plan. What is the flaw in your colleague’s logic as described to you?
Your response should be 500 to 700 words that answers these questions. Your paper should adhere to APA format, include a title page and be in MS Word format.
