Accounting and Finance for Managers - Term Paper Example

The paper “Accounting and Finance for Managers” is a meaty finance & accounting term paper. The financial statement of a company proves to be most effective in analyzing and reviewing the financial performance of a firm, which supports in making better economic decisions. Every organization prepares financial statements like income statements, balance sheets, cash flow statements, and changes in equity statements (Parker, 2007). The management of a firm highly depends on these statements to know about their current position of the business.

Also, shareholders can assess the management performance, which helps them to make investment decisions. In this study, the financial statement of a particular company will be studied. In this context, Shell Plc has been taken into consideration. Shell Plc is an oil and gas firm headquartered in the Netherlands. The company is involved in providing products like petroleum, petrochemicals as well as natural gas and has operations in more than 90 nations (Shell, 2016). Further, the financial objective of the firm would be identified and financial ratios will be undertaken for analyzing their financial performance.

Later in the paper, a decision would be made whether to hold or sell existing shares based on the company’s financial outcome. 2. Assessing the value of information in the statementFrom the annual report of 2015, it can be observed that Shell t generated a profit of $2200 million (Reports. shell, 2016). The rate of generating income is an important base for the shareholders to know whether or not, the firm is being able to receive benefits from their investment. Therefore, it supports them to decide on investment.

According to Peterson and Fabozzi (2012), the net income of a company entails that the firm has effectively met its expenses. It can be indicated that the shareholder of Shell; would use their net income information, to decide that the company is in a position to provide a return on their investment. On the other hand, the income attributed to the shareholders is a valuable factor for a particular shareholder, to decide whether the company can pay the dividend or not. It is evident that in 2015, the firm paid $1939 million to their shareholders (Reports.

shell, 2016).