AMD CASE FINANCIAL INFORMATION 5
AMDCase Financial Information
AMDPresentation to Investors
Thepresentation of information AMD illustrates their commitment to theinvestors in the company by providing them with correct and up todate information on the operations of the company. The informationprovided reports on the financial position and performance of thecompany for the previous period, the information presented to informthe users. In addition, the information presented by the companyillustrates their reporting to the investors as the commitment totheir corporate governance responsibility requires them to. As acompany, it is required to report information about their operationsto its stakeholders. The presentation of AMD reports on their overallperformance in both the primary and non-primary activities of thefirm.
AMDuses their financial information to inform investors of the financialresults of their activities in the year of trading as well as otheryears. According toKenon (2014), thecompany reports on the profitability and the revenue status of thecompany for the last period through the statements of financialperformance. This helps the investors to understand the state ofaffairs of the company and take appropriate actions. In addition, AMDuses financial information to report on the position of the companyin terms of resources and liquidity (AMDAnnual Report, 2010).This is done by presenting information assets and liabilities as theyrelate to owners` equity, an important piece of information for theinvestors.
Inaddition, the presentation of AMD financial information provides areport on the company for decision making by the investors. Investorsuse the information provided by the company to evaluate the value oftheir portfolio of the firm in comparison with the industry (Kenon,2014). Additionally, AMD uses the financial information to reportinformation that will help new investors decide on whether to investin the company(Martha & Bruce, 2000). Throughthe use of financial information, AMD provides a chance forshareholders to analyze their investments in the company and evaluatethe performance of the management.
AMDuses financial information to report on the environmental analysis ofthe company through their section of management discussion. Throughthe financial information, AMD has discussed the nature ofcompetition the company is facing in the industry and in relation toother companies. For instance, the company provides managementdiscussion on the local and international economic conditions thatdirectly or indirectly affect business operations. This helps theinvestors to evaluate the environment that a firm is operation tounderstand the business risk (AMDAnnual Report, 2010).In a similar way, AMD uses financial information to disclose therisks involved in the business operations as well as the anticipatedbusiness gains and losses.
FinancialInformation for Internal use
Internalusers for AMD constitute of the management, employees and owners.They are important to the company because they provide the resourcesthat constitute the input for the financial performance and positionfor the company. AMD uses financial information to report theperformance of the company for internal users as well. This helps theinternal users to evaluate their role in the operations of thecompany based on the performance of the business and non-businessoperations(Martha & Bruce, 2000). AMDuses financial information to report the financial and non-financialoutcomes of every activity that is engaged by the company as a wayof communicating to the internal users.
AMDcommunicates the strengths of its internal controls as well asadministrative guidelines through the financial information. Throughthe accuracy and correctness of these financial information, thecompany provides the details that show how effective the policies andinternal controls of the company are effective in directing thepeople at the firm(Martha & Bruce, 2000). Thesecontrols determine the strengths of the firm as well as theweaknesses. Through the financial information, the companycommunicates the losses that the firm incurs due to its weaknesses.Similarly, the company reports the gains and the advantages the firmenjoys due to the strength of the internal controls.
AMDuses financial information to evaluate the performance of thecompany’s internal organs and departments. This is because theinformation presented provides the financial results of each businessactivity, especially through the use of financial ratios (Drake,n.d).The importance of this provision is to enable the company to evacuateeach department of business section on its own results withoutintegrating the activities of other sections. Therefore, the companyuses the financial information to analyze the effectiveness of theresources as well as people behind every business department(Kenon, 2014).Thisway, the company is able to make decisions that are informed of theperformance of the business as an integrated unit.
Financialinformation is important for the business since it reflects thefinancial position and performance of the company. For AMD, thefinancial position is reflected in the balance sheet, while thefinancial performance is reflected in the income statement. Togetherwith other statements like cash flow analysis and statement ofchanges in equity, the company reports on information that isvaluable of decision making, this information is used both theinternal users and external users. Therefore, AMD uses financialinformation to report and inform users. The firm also uses financialinformation to help users evaluate, analyze and make decisions basedon the presented financial statements.
AMD2010 Annual Report on Form 10-KRetrievedfrom,<http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODUyNDV8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1>June13, 2014
Drake,P. P. (N.d). FinancialRatio Analysis. Retrievedfrom,<http://peregrin.jmu.edu/~drakepp/principles/module2/fin_rat.pdf>June13, 2014
Kenon,J. (2014). Whatis a 10K and Why Should an Investor Read It? ABrief Overview of the 10K.Retrieved from,<http://beginnersinvest.about.com/od/annualreports/a/10k.htm>June13, 2014
Martha,R., & Bruce, S. (2000). BestPractices: Provide Internal Financial Information.Retrievedfrom, <http://www.inc.com/articles/2000/08/20070.html>June 13, 2014