Examining Financial Statements
Landry’s Restaurant, Inc.
Students
University Of Phoenix
Principles of Accounting
ACC/300
Paul Cowley
Monday, May 11, 2009
Financial statements are reports that describe the economic strength of a business. Each report shows how a firm has used the funds entrusted to it by its stockholders (shareholders) and lenders, and tells its current financial position. The three basic financial statements are the (1) balance sheet, which shows firm's assets, liabilities, and net worth on a stated date; (2) income statement (also called profit & loss account), which shows how the net income of the firm is arrived at over a stated period, and (3) cash flow statement, which shows the inflows and outflows of cash caused by the firm's activities during a stated period. In order for a business, to be able to meet its financial obligations these reports helps an organization maintain operations and grow in the future. After all, if a business is not able to meet it daily obligation (debts) a business will not survive to see another day! That's why it's important that investors to understand how to assess a company's short-term financial health. In our paper will examine the financial statements of Landry’s Restaurants. We will look at the company’s current assets, which will include anything the company owns that can be converted to cash, revenue and money owed to the company. Next we will consider the company’s current liabilities. These are items that have to be paid: Bills, overhead, employee wages and short term loans. Our next step is to calculate the long term prospects of the company remaining above water. We must take into account bank debt, whether bills are being paid on time, and any socio-economic factors that might impact the industry or field the business is in; while at the same time ensuring that the company does not have too much debt. Next we will estimate the profitability of the company for the...