Financial Statements of Barnes and Noble and Essay

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financial statements of Barnes and Noble and Borders Group for fiscal year 2009. The companies' statements provide information about their financial health, as well as discuss plans for the coming fiscal year.

The balance sheet reveals detailed information about each company's assets, liabilities and owners' equity (net worth). It is based on the accounting equation Assets = Liabilities + Stockholders' Equity; the two sections of the balance sheet must equal each other just as they do in the equation. This equation represents the basic accounting premise: assets, the means used to operate the company, are balanced by a company's financial obligations, along with the equity investment brought into the company along with its retained earnings (Investopedia, n.d.).

As both the Barnes and Noble and Borders Group statements show, there are four main financial statements:

The balance sheet, which shows what a company owns and what it owes at a fixed point in time

The income statement (or statement of operations), which shows how much money a company made and spent over a period of time

The cash flow statement, which shows the exchange of money between a company and the outside world over a period of time

The statement of owners' equity, which shows changes in the interests of the company's shareholders over time

The statements are all interrelated. Changes in assets and liabilities that are shown on the balance sheet are also reflected in the revenues and expenses shown on the income statement, which result in the company's gains or losses. Cash flows provide more information about cash assets that are listed on a balance sheet; they are related, but not equivalent, to net income shown on the income statement. No single statement tells the complete picture of a company's financial health, but taken together they provide powerful information. (Securities and Exchange Commission, 2005).

In addition to the financial statements, both the Borders Group and Barnes and Noble statements present…

Sources Used in Documents:

Works Cited

Investopedia Staff (n.d.). Reading the Balance Sheet. Retrieved on 4/6/2011 from http://www.investopedia.com/articles/04/031004.asp

U.S. Securities and Exchange Commission. 2007. Beginners' Guide to Financial Statements. Retrieved on 4/6/2011 from http://www.sec.gov/investor/pubs/begfinstmtguide.htm

Investor Dictionary, (n.d.). Off-balance sheet activities. Retrieved on 4/6/2011 from http://www.investordictionary.com/definition/off-balance-sheet-activities

Siegel, J.G., & Shim, J.K. (2006). Barron's Accounting Handbook. New York: Barron's Educational Series.

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