Financial Statements: Accounting Accounting: Financial Statements Are

Financial Statements: Accounting Accounting: Financial Statements Are the assets included under the company's assets listed in the proper order? Explain your answer. When it comes to the listing of current assets in a balance sheet, it is their liquidity that is taken into consideration. In that regard therefore, the assets that would ordinarily be turned into cash quickly come first. Looking at the company's current assets, one would conclude that based on my explanation above, the order of listing is proper and correct.

Cash (which is the most liquid current asset in this case) comes first. The other current assets follow -- in the order of their liquidity. How are the company's assets classified? With regard to the classification of the company's assets, we first have the current assets followed by the fixed assets. While current assets in this case include all those assets the company would ordinarily expect to convert to cash in less than one year, the fixed assets listed in this case were seemingly purchased for long-term use.

The said fixed assets include but they are not limited to property, plant and equipment; and equity and cost investments. What are cash equivalents? In the company's balance sheet, cash and cash equivalents are given as $1,188.6 million and 1,114.1 million for years 2012 and 2011 respectively. Cash equivalents, in basic terms, include all those marketable securities/investment securities the company considers to be of very-short-term maturity.

As included in the company's balance sheet, these marketable securities/investment securities are therefore highly liquid and this is the reason why they are included alongside cash, i.e. As 'cash and cash equivalents.' What are the company's total current liabilities at the end of its most recent annual reporting period? The company's total current liabilities for the period ended Sept 30th 2012, are given as $2,209.8 million.

Total current liabilities represent all those amounts the company owes to outsiders/creditors, and which it expects to settle within a period of less than one year. What are the company's total current liabilities at the end of the previous annual reporting period? The company's total current liabilities for the period ended October 2nd 2011, are given as $2,075.8 million. Considering all the information you have gathered, why might this information be important to potential creditors, investors, and employees? Potential creditors, investors, and employees are all collectively referred to as stakeholders.

The information I have gathered has a different impact on each member of the three stakeholder groups listed or identified above. Creditors With regard to creditors, it is important to note that the information gathered above could affect their decision on whether or not to extend credit to the firm. The current liabilities (as identified above) coupled with the current assets figure could come in handy in the computation of the current ratio.

According to Lasher (2013, p.87), the current ratio "gives a quick indication of whether the company will have the means to pay its bills during the next year." A good measure of liquidity, this particular ratio is obtained or computed by dividing the figure of current assets with that of current liabilities. A creditor would ordinarily avoid extending credit to a business that exhibits a low current ratio.

Investors Investors in this case could include all those individuals who already have a stake in the business or people who would like to own a piece of the business in the future. Basically, an individual would prefer to own a piece of a business that has potential for future growth. Further, all investors are keen on investing in a business whose returns are particularly high. By looking at the net earnings of the company, an investor can easily tell.