accounting is the means by which management reports to various users of financial information. evaluation of a company's financial position is an important factor in satisfying the needs of creditors, stockholders, management, the government, and other interested parties. management attempts to satisfy these needs by presenting information on the company's resources, obligations, and equities at periodic intervals.
in this chapter we first describe the balance sheet and the measurement techniques currently used to disclose assets, liabilities, and equity; illustrate the disclosure of financial statement elements on the balance sheets of Hershey and Tootsie Roll; and discuss how to evaluate a company's financial position. In so doing we do not presume that current stock measurement provide enough relevant information to the users of financial statements. Rater, we believe a Later in the chapter, we discuss the evolution of the third major financial statement from the statement of changes in financial position to the statement of cash flows, illustrate the disclosure of cash-flow information on Hersey's and Tootsie Roll's statements of cash flows, and discuss how investors can use information to evaluate a company's performance.