What key information would you seek from a firm’s financial statements?

Activity InstructionsUsing the information from the text, answer the following questions from the “Critical Thinking” section of Chapter 17:1.As a potential investor in a firm or perhaps the buyer of a particular business, would it be advisable for you to evaluate the company’s financial statements? Why or why not? What key information would you seek from a firm’s financial statements?2. Why must accounting reports be prepared according to specific procedures (GAAP)? Would it be a good idea to allow businesses some flexibility or creativity in preparing financial statements? Why or why not?3. What value do financial ratios offer investors in reviewing the financial performance of a firm?4. Why is it important to remember financial ratios can differ from industry to industry?Tips for SuccessUse what you have read in the chapter and what you learned from the discussion questions. Feel free to research financial ratios through any financial website online, such as Yahoo! Finance.