Financial statement paper

Essay by lov3joy October 2007

download word file, 5 pages 4.5

Reviewing financial statements to view a companies standing in the economy is necessary to ensure that the company is pulling its weight financially. A company has to be able to support its operations and customer base or it will go bankrupt. A good company can handle all financial output and incoming assets. Landry's can also balance their assets with their liabilities and stockholder contributions to ensure financial stability. In the following example Team A will be scrutinizing the financial statements of Landry's Restaurants to determine financial stablity.

Using the financial statements of Landry's Restaurants, the determination for the amount of net income is as follows. Net income is also known as net amount. Net amount refers to the take home pay or the amount of money earned after deductions such as income taxes (About, Inc., 2007). The net income for the past three years are 2003 was at $45,901,054, net income for the year 2002 was $41,521,616 and for the year 2001 the net income was at $26,919,569.

The information about the net income and the earnings per share were found on the Landry's Restaurants Consolidated Statement of Income. Earnings per-share increase is a positive sign for shareholders and investors. Some of the components that make up this financial statement are listed in the income statement. Basic earnings per-share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year (Phillips, Libby, Libby, 2006). Diluted earnings per-share reflects the potential dilution that could occur if contracts to issue common stock were exercised or converted into common stock (Phillips, Libby, Libby, 2006). For purposes of this calculation, outstanding stock options are considered common stock equivalents using the treasury stock method, and are the only such equivalents outstanding(Phillips, Libby, Libby, 2006). The Company...