For AccountingGenuis only

Managerial accounting

David Bumford

1/11/14

There are various items which organizations use in order to come up with strategic decisions. This essay is going to discuss how the analysis of the statement of cash flow, balance sheet and income statement affect the process of strategic decisions. These three items are used by the organizations to determine their financial position after a given period (Taparia, 2003).

The analysis of the Coca Cola and Wal-Mart companies’ financial statements indicates that the companies are doing very well. For example, in 2012, the Coca Cola Company made a revenue totaling $ 48 billion, which enabled them to earn a 4% profit increase, while it made a revenue of $ 46 billion in 2011. It also made a revenue of $ 35 billion in 2010. On the other hand, Wal-Mart made a total revenue of $469.2 billion in 2013. In the last three years, the revenue for these companies has only been increasing. For example, in 2012 Wal-Mart’s revenue was $446.95 billion, while it earned a total revenue of $421.849 billion in 2011. The analysis of these companies’ financial information indicates that they are doing well. This information will definitely help the management teams of these companies to come up with strategic decisions that will enable them to increase their revenue. For example, Wal-Mart can decide to increase its market share by venturing into new markets such as the African and Asian markets. On the other hand, Coca Cola can decide to improve the quality of their products in order to fight off competitors such as Pepsi. All these actions will enable these companies to increase their revenue. This information can be used by future investors to find out the profitability of a company that they want to invest in .

As it can be seen, the balance sheet, statement of cash flow and income statement can be used by organizations to come up with strategic decisions. By analyzing these financial statements, the organization can know its position in the market, thus coming up with strategies to improve the position (Taparia, 2003).

References

Taparia, J. (2003). Understanding financial statements: A journalist's guide. Oak Park, IL: Marion Street Press.

�Not needed, rather revenue or a total revenue sounds better.

� The paper is rather short. You basically only talk about the revenues. What about other key numbers and ratios. Make sure that you add them in the final paper towards the end of the course.