Financial statements are the final results of accounting information systems in companies; these are in the form of lists and are prepared during specific periods, such as being annual or quarterly, they are the primary means of knowing the financial position of companies (White, Sondhi & Fried, 2002), the most important examples of these financial statements are: (Income Statement - Statement Owner's Equity - Balance Sheet - Cash Flow Statement).
In this paper, I will discuss the income statement, one of the most essential listings forecast.
Income Statement
According to(Wel ( 2022), a profit and loss statement is the profit and loss statement of a particular company over a specific period of time, in which revenues, costs, and expenses are summarized. Therefore, it gives a general idea of the company's profit-making ability.
AECOM's Income Statement:
According to (Yahoo! Finance, 2022), the income statement of AECOM for the past three years is as follows:
Financial Evaluation:
When looking at the previous statement and analyzing it, we find the following:
1. Revenues: Aecom's revenues have fallen from $20 billion to $13 billion over the past three years. This was due to the COVID-19 pandemic, the complete shutdown of construction work in the United States, and the stoppage of significant projects in many countries worldwide (AECOM, 2022).
2. Gross Profit: Profit margins were commensurate with revenues from 2019 to 2021, it did not fall below the $700 million mark, this is because the cost of revenue is directly proportional to the revenue itself
3. Operating Expenses: AECOM's operating costs have stayed the same over the past three years; they were only 150 million dollars.
4. Operating Income: This value decreased by nearly 100 million during the fiscal year 202. The net profit for 2019, 202,0, and 2021 appears negative as these fiscal years for the construction sector were not the best.
5. Net Income: Net income has also been for three years for the same reason.
AECOM Financial Analysis Compendium:
In the past three years, the company was not in a good position due to the bad situation of the construction sector due to the Covid-19 pandemic, but the company's financial expectations in 2022 to 2023 and beyond made the company's shares reach a better price, which is $76 per share on today's date, although AECOM is one of the companies whose market value was and still is closely linked to what it actually owns and does not depend on the future outlook for its revenue but judging by its published financial models, it is doing well for the coming years.
Conclusion
Financial statements are official records recognized by governmental and non-governmental organizations to know the financial position of companies, where all financial statements are presented in accordance with the accounting principles and standards accepted locally or globally, on the other hand, in companies whose shares are traded on the stock exchange, these financial statements are very important to investors, it displays the financial position of companies in the past
(Croesus Financial Training, 2018). This is in addition to the financial models we studied in the previous unit, as it focuses more on the company's financial future.
References
AECOM. (2022). Aecom reports fourth quarter and full year fiscal 2021 results
https://investors.aecom.com/news-releases/news-release-details/aecom-reports-fourth-quarter-and-full-year-fiscal-2021-results
Croesus Financial Training (2018). Elements of Financial Statements [Video file]. Retrieved from
https://www.youtube.com/watch?v=OoK18dZ4TZE (14:20)
Welc, J. (2022). Financial statement analysis. In Evaluating Corporate Financial Performance (pp. 131-212). Palgrave
Macmillan, Cham.
White, G. I., Sondhi, A. C., & Fried, D. (2002). The analysis and use of financial statements. John Wiley & Sons.
Yahoo! Finance. (2022). AECOM STOCK.
https://finance.yahoo.com/quote/ACM/financials?p=ACM