Web Application Chapter 14 page 589

Evaluating a company by studying its financial statements enables an investor to get a picture of the soundness of a business. Comparing the past with the present gives the investor a good idea of a company's strengths and weaknesses as well as the direction in which the business is headed. Financial statements are also standard within an industry, making it easy to compare the performance of a company to that of its competitors. Page 589 in your textbook shows financial information for McDonald's. Answer these questions in complete sentences.

1. Would analyzing an income statement for IBM be of any benefit to an investor wanting to invest in McDonald's stock?

2. In business, SWOT (Strengths, Weakness, Opportunities and Threats) analysis is used as a tool of industry to analyze the company's external environment. What would be an example of an opportunity for McDonald's? What would be an example of a threat?

Answer the questions in full complete sentences.

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