Accounting Case Study

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Accounting is the language of business. Accounting records and processes financial information into an accessible format that can be understood by anybody in the business world. It is defined in business that accounting is “the recording, measurement, and interpretation of financial information.” (Ferrell, Hirt, Ferrell, 2016, p. 286). Companies uses accounting tools to evaluate organizational operations. Accountants summarize the information from a firm’s business transactions in various financial statements for a variety of stockholders. There is a lot of business failures that happen because of information that is “hidden” in the financial statements. Cash flow is the greatest concern of management. For businesses to succeed, they need …show more content…

Micron’s shares are around 97% held by institutional investors. In Micron 10-K, it states that Micron’s net sales increased from 2013-2014 (10-K, p.43). Micron did an acquisition at the end of their 2013 fiscal year. By doing this acquisition, there were able to increase their net sales. It is important to know how to read a financial statement. It is good to know where the denomination is expressed in. This financial statement is expressed in millions.It is good to know which way the years are running. The most recent fiscal year is going to be on the left side because people care more about the recent years. According to the Micron 10-K, the statement of cash flows showed positive net cash from operating activities for 2015 (10-K, p.47). This is important for the investors. In order for Micron to have 5.2 billion in cash flow, they had to spend 4 billion in equipment. They generated over 1 billion in cash flow which is beneficial to the investors. There is a new rule that was issued in 2014 and it’s on how to better recognize revenue. In the Micron 10-K, it states that Micron is“required to adopt this ASU beginning in our first quarter of 2019”( 10-K, p. 51). In page 51, it shows the rules in accounting that Micron hasn’t adopted yet. According to Mark Heil, this new rule is not going to effect Micron that much but is going “to change how software companies recognize revenue”. Revenue is the largest number of companies’ income statement. This rule is getting a lot of attention and can impact a lot of

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