1) What was the biggest surprise for you in the reading? In
other words, what did you read that stood out the most as different from your
expectations?
The biggest surprise in the reading for me came as a result
of the relatively easy explanations for many seemingly complicated terms like
accounts receivable or the like. It all
was pretty simple to understand why businesses do things in certain ways to
balance their balance sheets and how much the government plays a role in a firm
surprised me as well.
2) Identify at least one part of the reading that was
confusing to you.
One part of the reading that genuinely confused me was the
sheer amount of similar functioning sheets such as a balance sheet, profit and
loss sheet and the cash-flow statement. Many of these show the various aspects
of the corporation in extreme detail up to the point that I can’t easily remember
what each of them do apart from broad strokes.
3) If you were able to ask two questions to the author, what
would you ask? Why?
If I had two questions that I could ask the author, my first
would be: What is the extent of government regulation in the private sector? I
noticed the amount of wording the in the chapter towards the IRS and other government
regulatory entities in the form of financial paper-trails and the like.
My second question would be, how accurate are Pro Forma
Statements? Since, I’ve read on market papers that sometimes companies do
better or worse than expected. If it is not so accurate then why hasn’t a more
accurate method replaced it?
4) Was there anything you think the author was wrong about?
Where do you disagree with what she or he said? How?
I think the author was wrong about using just a sales
forecast as the basis for an operating budget. My reasoning is that an
unforeseen event can occur such as seen in the oil industry as of late, thus
considerations of volatility of the market should be factored in. I don’t
discount the use of the sales forecast just the addition of another tool to aid
it.
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