Question

What should the stockholder examine to get the most information that will help evaluate the answer to this question?

1) The balance sheet
2) The statement of cashflows
3) The income statement, since it shows the revenues and expenses for the period
4) The economic resources of the company

Answer 1

To evaluate a company as a stockholder, examine the income statement, balance sheet, and statement of cash flows.

The correct option is 1, 2 and 3.

Step-by-step explanation:

To evaluate a company as a stockholder, the most informative documents to examine are the income statement, the balance sheet, and the statement of cash flows.

The income statement shows the revenues and expenses for a specific period, providing insight into the company's profitability. It helps stockholders evaluate how well the company generates revenue and manages expenses.

The balance sheet provides information on a company's assets, liabilities, and shareholders' equity at a given point in time. It highlights the company's financial health and its ability to meet its obligations.

The statement of cash flows presents the sources and uses of cash during a specific period. It helps stockholders understand how the company generates and uses cash, including cash flows from operating, investing, and financing activities.