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These long-term fixtures must be analyzed on a regular basis in order to decide their future market value for a company. Assetsystems.com (2010), states that, "One of the most common barriers in implementing an asset management system is the reconciliation of existing records to the results of the new system." Often, how assets have been inventoried or managed, is the first factor that must be considered by retrieving the most accurate information regarding each of the companies assets.
Finding the history of the managed asset will help determine the other factors that are essential to knowing if the asset should be replaced or fixed. The cost of the asset, the estimated lifespan of the asset, and the residual value of the asset also should be determined in order to influence the decision. The cost would include any amount that has been incurred to gain possession of the asset and any…
McCrary, Stuart A (2010). Mastering Corporate Finance. Hoboken, NJ: John Wiley and Sons, Inc.
Michaud, Richard O (2008). Efficient Asset Management. New York, NY: Oxford University Press.
Netsuite (2010). Netsuite Announces New Financial Planning Module Enabling Business Performance Management for Strategy, Planning, and Execution. Retrieved March 29, 2010, from http://www.netsuite.com/portal/press/releases .
Statement of Income
Cost of Goods Sold
The first year of trading was rough, in that the company lost money. While on the surface this poor performance, it should be noted that the cost of goods sold is somewhat inflated because the expenses of putting together each guide were not amortized. Thus, they are fully applied to this year, even though the sales of these books will be extended beyond this year. The sales were only for three months of this year, meaning that for at least the next two years there were be revenues without these costs associated with building ten guidebooks from scratch.
If we were to extrapolate what the profit/loss will look like next year, it should show that there is a revenue stream from sales, and while there will…
Ashford, R., Hall, R. & Ashford, N. (2012). Broadening capital acquisition with the earnings of capital as a means of sustainable growth and environmental sustainability. The European Financial Review. Oct-Nov 2012, 70-74.
Bernard, M. (2008). IFRS and income taxes. AICPA / Corporate Tax Insider Retrieved November 14, 2014 from http://www.ifrs.com/overview/Financial_Management/IFRS_incometaxes.html
Cliff Notes. (2014). Sales returns and allowances. Cliff Notes. Retrieved November 11, 2014 from http://www.cliffsnotes.com/more-subjects/accounting/accounting-principles-i/accounting-for-a-merchandising-company/sales-returns-and-allowances
Owen, L. (2013). PwC: The U.S. consumer ebook market will be bigger than the print book market by 2017. GigaOm. Retrieved November 11, 2014 from https://gigaom.com/2013/06/04/pwc-the-u-s-consumer-ebook-market-will-be-bigger-than-the-print-book-market-by-2017/
Cost of Goods Sold
Operation & Admin Expenses
ecause of economic decline and uncertainties of unemployment, energy prices, etc. 2010 was in over deflation and 2011 had an overall inflation (2011 Annual Report, 2011). Income tax increased in 2011 due to repatriation taxes on dividends from a Canadian subsidiary.
Cash & equivalent
Depreciation & Amortization
Invest. Unconsolidated affiliate
Cur. Note Maturities
Cur. Cap. Lease Obligation
Accrued Sal. & Wages
Deferred Income Tax
Other Accrued Liabilities
Total Current Liability
Cap. Lease Obligation
Deferred Income Tax
Analyze Investments Quickly With Ratios. (2006, Dec 1). Retrieved from Investopedia: http://www.investopedia.com /articles/stocks/06/ratios.asp#axzzlvpb34qrt
2011 Annual Report. (2011). Retrieved from Safeway: http://220.127.116.11/interactive/swy/2011/2010
Kieso, D.E. (2008). Intermediate Accounting I, II, & III. Hoboken, NJ: John Wiley & Sons, Inc.
This is the result of the decline in inventory levels. If the inventory levels had not changed, there would have been no difference between the net profit for the two methods.
If the company sold another 10,000 units, it would have a higher profit. This calculation was based on the contribution margin method. What occurs in this method is that the company sells more, but it does not produce more. Therefore, the variable operating and selling cost increases, but the variable production cost does not increase. The inventory is run down further than in the first example, increasing the spread between the profit in the two methods.
I would recommend to management that the absorption method is used to calculate these costs. Because the costs are matched up more closely with sales, the resulting figures give management a better figure of the cost of the goods sold for the year.…
An example here may be income from an original Rembrandt that one possesses and, occasionally, loans for parties, or income from one's continuing retail business, or income that is still coming in from last month's rental payment even though the original inhabitants have discontinued their lease. This part of the income statement remains unchanged. The only element that SAS 130 appends is the category of other comprehensive income.
3. Definition of classifications within other comprehensive income
Included in other comprehensive income are times such as unrealized gains and losses on particular debt and equity securities investments, minimum pension liability adjustments, and foreign currency translation adjustments. Examples here include the sale or liquidation of an investment in a foreign entity; or a non-materialized loss on a bank loan.
Other comprehensive items must be adjusted for both amounts currently recorded in the net category and for the same amounts previously recorded in…
FASB, Concept Statement No. 3, Elements of Financial Statements of Business Enterprises. Norwalk, CT: FASB, 2009
FASB, Financial Accounting Series, Exposure Draft, Proposed Statement of Financial Accounting Standards, Reporting Comprehensive Income. Norwalk, CT: FASB, 2009
FASB, Statement of Financial Accounting Standards, No. 130, Reporting Comprehensive Income. Norwalk, CT: FASB, 2009
3% decline. The decrease in gross margin was primarily due to an increase in postage rates effective May 2007 and a reduction in the prices of Netflix's most popular subscription plans during the second quarter of 2007 caused by increased competition. The company is anticipating further pressures on gross margin in 2008 due to continued price competition and another slight increase in postage rates.
The company is anticipating a shift from postal delivery to Internet-based delivery of its content in the near future and surviving the transition will be critical to the company's long-term success. It has increased technology and development from $48, 379 million in FY 2006 to $71, 395 million in FY 2007; much of this is for the transition to Internet-delivered content. Netflix's balance sheet indicates its content library as one of its greatest assets other than cash and short-term investments. The value of the content library…
Netflix Annual Report (2007). Retrieved at http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?dcn=0001193125-08-040378
almart Income Statement
Analysis of al-Mart Income Statement 2009-2011
al-Mart operates retail stores classified into the three categories of almart U.S., almart International, and Sam's Club. International sales account for 26% of net sales, while Sam's Club is just 11.8% (almart, 2012, p. 17). An initial perusal of al-Mart's income statement evidences the staggering scale of its retailing operations. In 2011, revenues from both retail receipts and club memberships rose 4.3%, over 2009 figures, to nearly 422 billion (USD). Operating income demonstrates a steady incremental increase reflective of consistent management and cost control practices. Lastly, the income from continuing operations reflects a consistent incremental increase with each passing year.
Based upon a general overview of the almart income statement, it appears that the firm is financially healthy and consistently capturing accounting profits. Review of the accompanying notes reveals that almart does not include the costs of their warehouse…
Walmart. (2012). Walmart 2011 Annual Report. Retrieved September 9, 2012, from Walmart Stores Web site: http://www.walmartstores.com/sites/annualreport/2011/financials/Walmart_2011_Annual_Report.pdf
Wohl, J. (2012, September 6). Walmart tests iPhone app checkout feature. Retrieved September 9, 2012, from Reuters Web site: http://www.reuters.com/article/2012/09/06/us-walmart-iphones-checkout-idUSBRE8851DP20120906
Business Insider. (2012, September 3). Why Walmart Can Pull Off 'Everyday Low Prices' But Everyone Else Keeps Failing Read more: http://www.businessinsider.com/why-walmart-can-pull-off-everyday-low-prices-while-everyone-else-keeps-failing-2012-9 #ixzz261Oo6ExX' target='_blank' REL='NOFOLLOW'>
Brandywine Income Statement Is as Follows:
Brandywine Income Statement
Brandywine's net income was $1.5 million. The total profit margin, which we will assume is the net margin, is 1.5 million / 12 million = 12.5%. The cash flow is $3,000,000. The cash flow is the net income + depreciation, so 1.5m + 1.5m = 3m.
If the depreciation expense doubled, the income statement would be as follows:
Brandywine Income Statement
The net income would drop to zero, as would the profit margin. The cash flows, however, would remain unchanged at $3m. This is because the depreciation expense has doubled. In doing so, it is now $3m, and when this is subtracted from the gross profit, the remaining money (net income) is now zero. However, depreciation is not a…
No author. (2011). Cash vs. accrual accounting. Business Owner's Toolkit. Retrieved October 21, 2011 from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P06_1340
No author. (2008). Equity in not-for-profit businesses. Car Free DC. Retrieved October 21, 2011 from http://www.carfreedc.info/2008/09/equity-in-not-for-profit-businesses/
Healthcare Finance: An Introduction to accounting and Financial Management (4th edition) Chicago: AUPHA Press / Health Addministration Press
With these two statements, there are two adjustments that have been requested. The $12,000 check cannot be processed yet. The sale needs to be recorded. The problem is that the sale will include inventories that moved, but without knowing what inventories were moved and what the markup would be, this cannot be done. If we assume $12,000 in inventory (though this is unlikely), we can process this. Very little changes -- not the size of the firm nor the profits, until we can determine how much inventory we have.
Again, with the physical inventory count,…
Instructional Plan Income Statement
This instructional paper will consist of detailed instructions for preparing a simple income statement. The paper will be designed to meet the specific needs of my client (a female shoe store owner) who requires instruction in completing the income statement for her small business. As such, the instructions will be geared at the client's level of expertise in the area of accounting, and will focus largely on enabling the client to prepare her income statement with minimal assistance from professional sources such as an accountant, thus potentially reducing her expenses.
This lesson is necessary to help my client in two important areas. The first benefit is practical, as my client will save a significant amount of money by learning to develop her own income statement, rather than relying on the expertise of professional accountants. The client has currently clearly indicated to me that they do not…
Dalstead, Norm and Sharp, Rod. Preparing an income statement. Risk and Resilience in Agriculture. 01 April 2004. http://agecon.uwyo.edu/RnRinAg/RnR%20Section%204/Preparing%20an%20Income%20Statement.pdf
Ertmer, P.A., Newby, T.J. (1993). Behaviorism, cognitivism, constructivism: Comparing critical features from an instructional design perspective. Performance Improvement Quarterly, 6 (4), 50-70.
Instructional Technology Services (ITS). Components of Instructional Design. 01 April 2004. http://itsinfo.tamu.edu/workshops/handouts/html_handouts/components_id.htm
Mergel, B. 1998. The History of Behaviorism, Cognitivism and Constructivism in Instructional Design. Instructional Design & Learning Theory. http://www.usask.ca/education/coursework/802papers/mergel/brenda.htm#Behaviorism
The income statement and the balance sheet are some of the most commonly used financial statements, both at a personal and corporate level. In this text, I concern myself with how I can utilize the balance sheet in my day-to-day life. Further, I look at how a business manager could benefit by having a comprehensive understanding of this crucial financial statement. Lastly, I discuss how I may apply both the income statement and the balance sheet in a future position.
The Balance Sheet and its Application in My Day to Day Life
According to Eisen (2007), a balance sheet is basically a financial statement that charts an entity's financial position at a specific point in time. It is mainly made up of three sections namely the assets section, the liabilities section and lastly the owner's equity section. In my own opinion, the balance sheet could come in handy…
Eisen, P.J. (2007). Accounting. New York: Barron's Educational Series.
Juan, D.A. (2007). Fundamentals of Accounting: Basic Accounting Principles Simplified for Accounting Students. Indiana: AuthorHouse.
Stickney, C.P., Weil, R.L., & Schipper. K. (2009). Financial Accounting: An introduction to Concepts, Methods and Uses. Ohio: Cengage Learning.
Accounting Concepts and Practice
Income Statement and Balance Sheet
For the Year Ended 31st Dec 2012
Less cost of goods sold
Net Income (Balance C/D)
etained Earnings: Difference between debit and credit balances.
$760,850 -- $718,000 = $42,850
etained earnings to be transferred to the balance sheet:
Income statement balance b/f
balance c/d $40,650
Add: retained earnings
etained earnings balance c/d $83,500
For the Year Ended 31st Dec 2012
Total current assets
Paid in capital
Albrecht, W.S., Stice, E.K. & Stice, J.D. (2010). Financial Accounting: Concepts & Applications (11th ed.). Mason, OH: Cengage Learning.
Gallagher, T.J. & Andrew, J.D. (2007). Financial Management: Principles and Practice (4th ed.). Minnesota: Freeload Press.
Gitman, L.J. & McDaniel, C.D. (2008). The Future of Business: The Essentials (4th ed.). Mason, OH: Cengage Learning.
Construct Brandywine's 2007 income statement.
(75% of evenue)
What were Brandywine's 2007 net income, total profit margin, and cash flow?
Brandywine's Net Income =
Brandywine's Total Profit Margin
Total Profit Margin =
Net Income/evenue = $1,500,000/$12,000,000 = 0.125
Brandywine's Cash Flow
Net Income =
Non-Cash Expense (Depreciation)
Cash Flow for the FY ended 2007
In this case, a total profit margin of 0.125 means that for every $1 of income Brandywine rakes in, it earns a net income of $0.125.
Suppose the company changed its depreciation calculation procedures (still within
GAAP) such that its depreciation expense doubled. How would this change affect
Brandywine's net income, total profit margin, and cash flow?
With the depreciation expense increased twofold, the firm would have a nil value for net income.
Bowman, W. (2011). Finance Fundamentals for Nonprofits: Building Capacity and Sustainability. New Jersey: John Wiley and Sons.
Duchac, J.E., Reeve, J.M. & Warren, C.S. (2006). Financial Accounting: An Integrated Statements Approach. Mason, OH: Cengage Learning
Norton, C.L., Diamond, M.A. & Pagach, D.P. (2006). Intermediate Accounting: Financial Reporting and Analysis. Boston: Cengage Learning.
Rich, J., Mowen, M., Hansen, D. & Jones, J. (2009). Cornerstones of Financial Accounting. Mason, OH: Cengage Learning.
Company's Balance Sheet And Income Statement To Answer The Following Questions:
What are the company's total assets at the end of its most recent annual reporting period? Why is this important?
$56.26B (the third quarter of 2012). This is important because potential investors and shareholders would like to know whether to invest or continue investing in the company. They would also like to know how much of their money to invest in this company when considering their diversification portfolio.
The report of the company's total assets listed at the end of its most recent reporting period tells investors whether the company is profiting and, if so, by how much. It also provides a history of the company's growth, particularly when reviewed in the context of other factors and competitors.
Right now, for instance, we are experiencing a recession. Investors may wish to know whether Wal-Mart is suffering from the recession…
The figures from Pepsi's income statement are as follows:
The figures from Pepsi's balance sheet are as follows:
There are a few different conclusions we can draw from these figures. First, it is important to understand what these terms mean. evenue is how much money we brought in. Net income is how much is left after the bills have been paid. Assets are everything the firm owns; liabilities are how much it owes. What's left over after that is the equity, which is the value of the firm that the shareholders have. The price of the stock is based in part on the value of the equity of the firm.
The income statement tells us how much money we brought in, and then how much money we made after all of the…
Block, S.B., Hirt, G.A., & Danielsen, B.R. (2011). Foundations of financial management (14th ed.). New York, NY: McGraw-Hill.
Yahoo! Finance: Pepsi. (2013) Retrieved November 7, 2013 from http://finance.yahoo.com/q/bs?s=PEP+Balance+Sheet&annual
Lehavy, R., Feng, L., & Merkley, K. (2011). The effect of annual report readability on analyst following and the properties of their earnings forecasts. Accounting Review, 86(3), 1087 -- 1115.
Proctor & Gamble accounts show a number of different types of expenses. Expenses can be generally divided into two broad categories; operating expenses and capital expenses.
Capital expenditure will usually be seen on the balance sheet, as a capital expenditure results in the creation of acquisition of a capital asset. Capital expenditure is usually classified as any asset that is expected to have a life of more than 12 months (evsine et al., 2011). Under the matching convention these costs will then be depreciated over the assets' useful lifetime, with each year's share of the deprecation being expensed to the income statement (evsine et al., 2011). For example, on the Proctor & Gamble 2014 the balance sheet shows an increase in the net book value of property plant and equipment, rising from $21,666 million in 2013, to $22,304 million in 2014, indicating that there has been capital expenditure in 2014.…
Proctor & Gamble Co, (2014), Annual Report, accessed at http://www.pginvestor.com/interactive/lookandfeel/4004124/PG_Annual_Report_2014.pdf
Revsine, Lawrence; Collins, Daniel W; W. Johnson, Bruce; Mittelstaedt, H. Fred, (2011), Financial Reporting and Analysis, McGraw-Hill/Irwin
Contribution Income Statement
Sales (9000 units sold)
Product costs (120+60=40)x9000
Selling and admin 10x9000
Contribution Margin (70 per unit)
Selling and administrative
Net Operating Income
The net income on the contribution income statement is $25,000 lower than the $305,000 on the absorption income statement because $25 in fixed expenses is assigned to each unit cost (Accounting for Management, 2012). Where 10,000 units were produced, but only 9,000 sold, that leaves 1,000 units in inventory. The additional $25,000, 25 x 1,000, is listed in the inventory account.
Contribution Margin Income Statement
Sales 9,000 units at 330
Selling and admin 10x9,000
Selling and admin
reak even Analysis
Accounting for Management. (2012). Retrieved from Income Comparison for variable and absorption costing: http://accounting4management.com/incom...mparison_of_variable_and_absorption_costing.htm
Brewer, P.C. (2010). Introduction to Managerial Accounting. New York, NY: McGraw Hill.
Financial atios From Income Statements:
Accounting in hospitality management is carried out to identify and document financial issues and produce information regarding an organization's assets, liabilities, and investments. Through this process, the management of a hospitality establishment understands and interprets financial ratios, which are crucial for basic control of operations in the establishments. Some of the most important financial ratios in hospitality accounting include average daily rate, occupancy percentage, room sales to total sales, cost of food sold percentage, profit margins for rooms and F&B, housekeeping cost per occupied room, and cost of beverage sold percentage. These financial ratios can be determined or worked out from a company's income statements or operational data (Casado, 2006, p.103). For the 310-room hotel in Costa Mesa, California, the Occupancy percentage is 7,755: 310 = 25.02%
Cost of labor percentage for rooms is 103,202: 437,433 = 23% for F&B is 113,349: 302,188 = 37.5%…
Casado, M.A. (2006). Hospitality Accounting. In Hospitality management: a capstone course
(chap 9, pp.97-105). Upper Saddle River, NJ: Pearson Education, Inc.
The four financial statements are the balance sheet, income statement, statement of cash flow, and statement of owner's equity. Briefly, the balance sheet is comparison of assets to liabilities and equity. This statement is indicative of a company's position at a specific time. The income statement is a record of a company's operations over a given period of time. It shows a company's expenses, losses and revenues and is indicative of the company's net income during that period of time. The statement of cash flows is intended to provide information about a company's cash receipts and cash payments for operations, investments and financing during an accounting period. Finally, the statement of owner's equity is intended to show changes in owner's or shareholder's equity from one fiscal year to the next. Owner contributions and any additional capitol, such as the sale of new shares, are added to the equity,…
Kurtz, D.L. (2010). Contemporary Business, 13th ed. Hoboken, NJ: John Wiley & Sons Inc.
U.S. Security and Exchange Commission. (2007, February 5). Beginner's guide to financial statements. U.S. security and exchange commission. Retrieved August 24, 2012, from http://www.sec.gov/investor/pubs/begfinstmtguide.htm
"Uses of the income statement in financial accounting." (2010). Financial-accounting.us, Retrieved August 24, 2012, from http://www.albany.edu/news/pdf_files/impact_of_aging_excerpt.pdf
profit loss statement Virtual Organizations: • iordan • McBride • Kudler Describe important elements, noting means company.
Profit and Loss Statement for McBride Plc.
McBride Plc. has enjoyed a positive increase in its financial results, as it is best revealed throughout their most recent income statement. Starting at the end of the statement, where the costs are deduced from the incomes, it is revealed that the company has generated a net income in the amount of £22,000 thousands. The figures are revealed in the table below:
= in thousands GBP=
Yahoo Finance, 2012
The latest net income of McBride Plc. reveals a £5,000,000 increase comparative to the previous year (2009). In 2008, the net income had been of £12,000 thousand, and in 2007, it had been of £21,000 thousand. The latest figures as such indicate an important downfall in 2008 comparative to 2007, when the company's net income…
Bragg, S.M., 2006, Financial analysis: a controller's guide, 2nd edition, John Wiley and Sons
Helfert, E.A., 2001, Financial analysis: tools and techniques: a guide for managers, McGraw Hill
McBride Plc., Yahoo Finance, http://uk.finance.yahoo.com/q/is?s=MCB.L&annual last accessed on June 6, 2012
Operating income it typically defined to include all operating expenses other than depreciation and taxes (Investopedia, 2011). Because the airplanes are leased, there is no depreciation for West Coast Airlines to take into consideration anyway. The operating income is as follows:
Food & Beverage
The company right now is losing $31,012.50 on every one-way flight to Fiji.
If the company lowers the cost of the flight in order to generate an increase in volume, the operating income figures will look as follows:
Food & Beverage
By these figures, Fiji Air loses $28,924 per one-way flight with the lower ticket price and the higher average number of passengers. The bigger issue is that even under this…
Investopedia. (2011). Operating income. Investopedia. Retrieved February 8, 2012 from http://www.investopedia.com /terms/o/operatingincome.asp#axzz1lna6LUYy
No author. (2012). Break-even point. Accounting Coach.com. Retrieved February 8, 2012 from http://www.accountingcoach.com/online-accounting-course/01Xpg01.html
financial statements by business entities. The purpose of this is so that one can understand about the business cash, how the business acquired or generated it, how it was used and in what ways and tomorrow's business plans, financial position of a business, performances and its position. The paper will go ahead to analyze if there is any significance of cash for the survival of a business and the impacts of the various financial sets. The arguments that will prevail will be based on the importance of the different financial statements to a business survival.
Cash is a crucial constituent of a business and I do agree that a business cannot survive without it. 'As a matter of fact the main aim and goal of a business is to generate cash and profits not only in the short run but also in the long-term.' (Minnery, 2006) Every business has everyday…
Elliot.B, 2005, Financial Accounting and Reporting; Financial Times/Prentice Hall, United Kingdom
Graham B. 1998, The Interpretation of Financial Statements Harper Business, amazon
Minnery.B. 2006, 'Don't question the importance of cash flow' The independent, viewed date 28 May 2006, www.independent.co.uk
MoneyInstructor.com. 2009, The importance of cash flow statement; viewed; Aug 19, 2009 www.moneyinstructor.com/doc/importance....
The role of financial statements in investing is that they provide a consistent format that can be used by potential investors and other stakeholders to evaluate a company. There are several components that facilitate this happening. For publicly-traded firms, Generally Accepted Accounting Principles (GAAP) play a key role in the creation of financial statements. GAAP is a common set of accounting principles and procedures that companies use to compile their financial statements (Investopedia, 2012). ith companies having to produce their statements according to a common set of criteria, the information is easier to compare not only between different years at the same company, but also against other firms in the industry and all other publicly-traded firms.
The IFRS is essentially the international version of GAAP. Financial statements in many countries, especially those in Europe, are produced according to IFRS. There are a many areas where GAAP and IFRS diverge,…
AICPA. (2011). International financial reporting standards (IFRS): An AICPA backgrounder. AICPA. Retrieved March 22, 2012 from http://www.ifrs.com/pdf/IFRSUpdate_V8.pdf
Beiersdorf 2011 Annual Report. Retrieved March 22, 2012 from http://www.beiersdorf.com/GetFile.ashx?id=3243
Investopedia (2012). Generally Accepted Accounting Principles (GAAP). Investopedia. Retrieved March 22, 2012 from http://www.investopedia.com /terms/g/gaap.asp#axzz1pmKm2c8C
Revlon Fiscal Year 2011 Form 10-K. Retrieved March 22, 2012 from http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1odHRwOi8vaXIuaW50Lndlc3RsYXdidXNpbmVzcy5jb20vZG9jdW1lbnQvdjEvMDAwMTE5MzEyNS0xMi0wNjUzMTAvZG9jL1JldmxvbkluYy5wZGYmdHlwZT0yJmZuPVJldmxvbkluYy5wZGY=
The statement of cash flows separates out the cash flows from the non-cash flows on the income statement. This gives the reader a better indication of the cash position of the company, rather than the position with regards to accounting profit. The statement of cash flows separates cash flows into three categories -- operations, investing and financing. This can help analysts to determine where profits and changes in cash position come from -- do they come from successful operations or from other activities.
The statement of changes to owner's equity explains the changes in retained earnings. It illustrates how the company's activities over the period have impacted the value of the owners' stake in the firm.
These statements are all interrelated. The income statement and the statement of cash flows work together to explain not just profits but the sources of positive and negative cash flows. The statement of changes…
No author. (2007). The 4 financial statements. QuickMBA.com. Retrieved November 23, 2009 from http://www.quickmba.com/accounting/fin/statements/
Using these different techniques reveals different information about the company. So for example we know that Tesco earned £67.6 billion in revenue last year, and that this is an increase of 8.1% over the previous year. This is the top line number; we can see that the bottom line number is £3.8 billion, an increase of 11.7% from the year before. This basic analysis reveals that the company has increased its revenues faster than it costs. This is valuable information for all types of stakeholders. Investors find such facts reassuring. Unionized workers may see an opportunity to take their share of the increased profits, and customers may be upset that the company is earning higher margins from them, although it is hard to see where margins might come from on a 19p can of tomatoes.
The balance sheet is used to understand Tesco's financial condition. The assets, liabilities and equity…
Grant Thornton. (2011). The future of UK GAAP. Grant Thornton. Retrieved November 22, 2011 from http://www.grant-thornton.co.uk/services_/audit_and_assurance_x/the_future_of_uk_gaap-1.aspx
Investopedia. (2011). Efficient market hypothesis. Investopedia. Retrieved November 22, 2011 from http://www.investopedia.com /terms/e/efficientmarkethypothesis.asp
SEC. (2007). Beginner's guide to financial statements. Securities and Exchange Commission. Retrieved November 22, 2011 from http://www.sec.gov/investor/pubs/begfinstmtguide.htm
Tesco 2011 Annual Report. Retrieved November 22, 2011 from http://ar2011.tescoplc.com/
MICOSOFT: No terrorist is going to try to blow up Microsoft; no oil products are needed to run computer hardware and software; computers run the world of commerce; and Bill Gates owns a huge percentage of all things computer software-related, so the Microsoft steamroller is a great investment and not as vulnerable to world conditions as are the first two companies reviewed in this section.
One final conclusion: for EXXONMOBIL, albeit their fortunes can change because of the war and oil's vulnerability to war, their earnings for the 4th quarter of 2004 were their highest ever ($8,420 million), and they have friends in the White House in Bush and Cheney, so their financial picture remains very bright; for FOD, they experienced a $5 billion pre-tax profit from their "financial services" (auto loans) division, which is very impressive; moreover, car sales are booming and Ford will, in the near future, realize…
AllBusiness (2005). What Are Generally Accepted Accounting Principles? Retrieved February 8, 2005, at http://www.allbusiness.com/articles/content/17954.asp .
Anderson, Curt. (2005). Microsoft Reports Record Revenue and Earnings. Retrieved February 9, 2005 from Microsoft Investor Relations Web site: http://www.microsoft.com/msft .
Bruebaker, Gary H. (1999). A Question of Value. Government Finance Review, 15(3),
Ensman, Richard G. (1999). Accrual Basis vs. Cash Basis Accounting. Doors and Hardware, 63(10), 20-22.
financial statements Hawaiian Airlines 3 years. Access information contained Hawaiian Airlines balance sheet income statement calculate: • Liquidity ratios o Current ratio o Acid-test, quick, ratio o eceivables turnover o Inventory turnover • Profitability ratios o Asset turnover o Profit margin o eturn assets o eturn common stockholders' equity • Solvency ratios o Debt total assets o Times interest earned Show calculations ratio
Hawaiian Airlines Financial Analysis
Hawaiian Airlines is a relatively small airline operator at a global level, being the 11th by size in its own country. Still, the notable element about the company is that it is the flag carrier, which virtually means that the company receives governmental support in order to conduct its operations (Bennett, 2006). Hawaiian Airlines is an integrant party of the larger company Hawaiian Holdings, which has placed itself within the market as the company ensuring a quick access to a good time in…
Bennett, S. (2006). A sociology of commercial flight crew. Ashgate Publishing
Cento, A. (2008). The airline industry: challenges in the 21st century. Springer (2012). Investopedia. http://www.investopedia.com accessed on October 4, 2012
Website of Hawaiian Airlines, http://www.hawaiianairlines.com / accessed on October 4, 2012
ABC/123 Version X
Financial Statement Review
al-Mart's Financial Statement Review by Ellen Talley
hat is the net income for the current fiscal year?
Is it up or down from the prior year?
hy would this information be important to investors?
hat is the ending balance in stockholders' equity?
hy would a labor union potentially be interested in this information?
hat is the total value of assets?
hy would this information be important to a potential creditor?
hat is the total cash flow from operation?
hat financial statement user would find this information most important?
alMart's Income Statement
alMart's Stockholder Equity
alMart's Statement of Cash Flows
alMart's Full Balance Sheet
hat is the net income for the current fiscal year?
The net income per for the current fiscal year per Yahoo Finance is 16.999 billion after taxes and interest and such. This is on a net sales…
http://stock.walmart.com/annual-reports http://finance.yahoo.com/q/bs?s=WMT+Balance+Sheet&annual http://finance.yahoo.com/q/cf?s=WMT
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The reduction in liabilities represents a move to reduce financial leverage in a period of tightening credit and risk profiles. The cash build-up too is an assertive move to combat liquidity concerns and build structural soundness to the balance sheet. AMD management implicitly understood that their internal financial condition was threatening to unravel the company with stagnant revenues and bloated expenses. As such the repositioning of AMD to take advantage of new revenue opportunities in their fusion process technology was an important step. Add to this a streamline of operations to improve the income statement, a strengthening of the balance sheet through targeted asset increases and strategic debt reductions; and the result are 2010 financial statements which show AMD "achieved many financial milestones: increasing revenue 20% year-over-year, restructuring the balance sheet, reducing overall debt, improving gross margin and delivering positive adjusted non-GAAP free cash flow" (AMD Annual eport. 2010)
Advanced Micro Devices. AMD. (2009). 2009 Annual Report. Advanced Micro Devices.
Retrieved September 19, 2011 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzI2ODh8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
Advanced Micro Devices. AMD. (2010). 2010 Annual Report. Advanced Micro Devices.
Retrieved September 19, 2011 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODUyNDV8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
Balance sheet items can also be used by investors to determine the financial health of a given company. This can be done through the analysis of the relevant financial ratios including but not limited to liquidity ratios.
4. The Cash Flow Statement
Of the financial statements discussed in this text, the cash flow statement is typically the last financial statement prepared. A cash flow statement in the opinion of Cunningham et al. (2011) "shows the changes in a business' cash during an accounting period by listing the cash inflows and outflows from its operating, investing and financing activities..."
easons for Preparing the Financial Statements in the Order Above
One of the main reasons why financial statements have to be prepared in a prescribed logical order has got to do with the need to transfer some pieces of information from one financial statement into the next. In this case, entries in…
Cunningham, B., Nikolai, L.A., Bazley, J., Kavanagh, M., Slaughter, G. & Simmons, S. (2011). Accounting: Information for Business Decisions. South Melbourne, Victoria Australia: Cengage Learning.
Porter, G.A. & Norton, C.L. (2010). Financial Accounting: The Impact on Decision Makers (7th ed.). Mason, OH: Cengage Learning.
Financial statements are the primary way for an investor, creditor, and other financial statement users to evaluate a company's financial performance, financial stability, profitability, and net worth to determine whether putting investments in the company would provide profitability and adequate return on investments (Way, 2013). Financial statements are also a way for managers to communicate achievements in performance to potential investors and creditors. The various statements brings various information components in the determination of evaluating companies for potential investments.
In evaluating Apple, Inc., the Income Statement shows net income for 2012 at $41,733 million (Form 10-K, 2012), up from $25,922 million in 2011. The income statement reports sales, expenses, and profits or losses. This is important to an investor because it shows results from operations in how profitable a company has been for the particular period. y evaluating present results against past performance, investors can assess for uncertainty…
Form 10-K. (2012, Sept 29). Retrieved from Apple, Inc.: http://files.shareholder.com/downloads/AAPL/25...21359901x0xS1193125-12-444068/320193/filing.pdf
Way, J. (2013). What is the importance of a company's financial statements? Retrieved from Chron: http://smallbusiness.chron.com/importance-companys-financial-statements-21332.html
It helps a company understand its capabilities and plan for future budgeting strategies. In order to understand the cash flow, one must be able to conduct appropriate forecasting through thorough cash flow projections. These are done through a number of ways. One is by examining a company's receipts and disbursements directly. This is appropriate for short-term forecasting, normally of about 30 days. Additionally, there is adjusted net income, where the initial operating income is added or subtracted from the balance sheet changes. Another way to the pro-forma balance sheet, where the cash account is the primary mode of analyzing forecasting numbers. Finally, there is the accrual reversal method, where major accruals are reversed in order to statistically understand cash flows.
Profit is incredibly important within all aspects and industries of business. Profit allows a company to find financial stability, therefore allowing it to evolve and grow. Essentially, a…
Companies use the income statement to show how successful the company is during specific time frames. Investors often want to know how much money is being brought in, they want to know that the company has enough funds to pay the operating expenses and any liabilities the company has.
Those same investors oftentimes wish to receive dividends on their shares of stock. They can ascertain whether the company has the means to do this by perusing the retained earnings statement. The retained earnings statement shows how much money the company has paid out, as well as how much the company has kept for future growth. If investors wish to buy a company that is going to be a strong growth company, then retained earnings is important because it will show that the company has the funds to do so.
A company's cash flow is a high priority to bankers, venture…
The Book ***
Weinstock, M.; (2008) Where Main Street & Wall Street cross, Hospitals & Health Networks, Vol. 82, No. 6, pg. 41
The second part of Landry's alance Sheet shows all financing methods such as liabilities and shareholders' equity. Current liabilities are $1,186,083,456. Liabilities consist of current liabilities, long-term notes, net of current portion, deferred taxes, and other liabilities. Total current liabilities are further broken into components such as accounts payable, accrued liabilities, income taxes payable, current position of long-term debt and other obligations, and liabilities related to discontinued operations. The company also reports commitments and contingencies.
Lastly, total stockholders' equity (assets minus liabilities) for Landry's is shown as $316,899,073.
c) How much did they spend on property and equipment additions? Which financial statement did you find this information? What are the components of this financial statement?
Landry's reports spending on property and equipment additions as -$122,997,511. This is reported on the Statement of Cash Flows. Cash Flows are divided into three components, cash flows from operating activities, cash flows from investing…
Landry's Restaurant Form 10-K. http://www.sec.gov/Archives/edgar/data/908652/000119312509055477/d10k.htm
In order to refer to this, we need to mention that the cash flow statement for the year generally reflects three different cash flow positions or categories: cash flows from operating activities, cash flows from investing activities and cash flows from financing activities. I have discussed the interrelationship between the cash flow from operating activities and the balance sheet. The other two categories are also reflected in the balance sheet.
Indeed, the company may invest during the financial year in fixed assets, such as property or equipment. The negative difference reflected on the statement of cash flows will be noted as an increase in the total asset value on the balance sheet, that is, an increase in the value for "property, plant and equipment."
This is the same for the cash flows from financing activities, which are strictly connected to the "liabilities and owners' equity" fields on the balance sheet.…
1. Halpern, Paul; Weston, Fred; Brigham, Eugene. Canadian Managerial Finance. Dryden, Fourth Edition. 1994
4. Business Owner's Toolkit. On the Internet at http://www.toolkit.cch.com/text/P06_7040.asp
Importance of Financial Statements
The Importance of Accurate Financial Statements to Outside Business Interests
The four financial statements are the balance sheet, income statement, statement of cash flow, and statement of owner's equity. All of these statements are interactive even though they each serve a unique purpose. They are intended to assess the health of a business and their accuracy is vitally important to investors, creditors and other outside interests. The income statement, statement of cash flow, and statement of owner equity, close out at the end of each year. The balance sheet amounts are carried over from year to year (Kurtz, 2010).
Both internal and external entities use these statements in order to inform the decision making process. These documents provide pertinent information on the financial position (balance sheet), profitability (income statement), and operating, investing, and financing activities (statement of cash flow and statement of owners…
"Cash vs. accrual accounting." (2000). Inc. Nolo.com Inc. Retrieved September 27, 2012, from http://www.inc.com/articles/2000/04/19194.html
Horngren, C.T., Harrison W.T., & Oliver, M.S. (2012). Accounting (9th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Kurtz, D.L. (2010). Contemporary business, 13th ed. Hoboken, NJ: John Wiley & Sons Inc.
Lasher, W.R. (2008). Practical financial management (5th ed.). Mason, OH: Thomson South-Western.
Accounting Process and Financial tatements.
A reliable internal system of accounting is an essential element of a solvent profit or nonprofit business entity. By recording virtually every business activity or endeavor, with regards to the creation of monetary inflows of sales revenue and monetary outflows of expenses resulting from operating activities; an accounting system should provide the financial information needed to evaluate the profitability or effectiveness of past and operations. Along with maintaining data for reporting purposes, an effective accounting system will effectively report the status of asset resources, creditor liabilities, and ownership equities of the business entity. With today's rapid and ever expanding technological developments have lead to increasing operating speeds, convenient data storage capabilities, reliability and significantly reduced costs.
Historically, maintaining an effective accounting system involved extensive manual labor which was described as tedious, aggravating, and time exhaustive. Recording transactions, adding subtracting, summarizing, and checking for errors were…
BASIC FINANCIAL ACCOUNTING REVIEW: media.wiley.com/product
Smith; Outlines & Highlights for Financial Accounting Basics. AIPI; 3 edition (October 19, 2006).
Stickney, Clyde P., Weil, Roman L.; Financial Accounting: An Introduction to Concepts Methods, and Uses. South-Western College Pub; 10 edition (July 2, 2002).
Maher, Michael W., Stickney, Clyde P., Weil, Roman L.; Managerial Accounting: An Introduction to Concepts, Methods and Uses. South-Western College Pub; 10 edition (March 13, 2007)
If on the other hand, the individual asks his friend to return the money, he can place it in an investment with a 15% interest rate and, by the end of the year, the $10 will be worth $11.5. In this order of ideas, we come to the realization that having money now is more valuable than having it in the future as, through time, money has the ability to multiply, if wisely invested.
Q11 -- Cash Budgeting
Cash budgeting is a complex process, with a simple definition however. It sees that organizational managers conduct an analysis and estimation of the cash which is expected to enter and leave the organization. The process refers to "an estimation of the cash inflows and outflows for a business or individual for a specific period of time. Cash budgets are often used to assess whether the entity has sufficient cash to fulfill regular…
Moffatt, M., 2009, Recession? Depression? What is the Difference? About, http://economics.about.com/cs/businesscycles/a/depressions.htm last accessed on August 27, 2009
2009, Cash Budget, Investopedia, http://www.investopedia.com /terms/c/cashbudget.asp last accessed on August 27, 2009
Accounting and Financial Statements
The purpose of accounting is to provide managers with the information they need to evaluate the liquidity of an organization. The balance sheet, income statements, statement of owner's equity, and statement of cash flows are financial statements that provide a basis on which managers, investors and creditors can make decisions. Of the four financial statements only the balance sheet, whose amounts are carried over from year to year, is considered to be a permanent statement. The income statement, statement of owners' equity, and statement of cash flows close out at the end of each fiscal year and are considered temporary. David Kurtz (2010) describes each of the four financial statements and their individual purpose.
The Balance Sheet
The balance sheet is based on the following accounting model: assets equal liabilities plus equity. A company's balance sheet reflects its position on a specific date. The picture it…
Kurtz, D.L. (2010). Contemporary Business, 13th ed. Hoboken, NJ: John Wiley & Sons Inc.
Mission and Vision Statement Analysis
Linking Wal-Mart's Mission and Vision to Their Strategic Goals ands Objectives
Assessing the Link Between Wal-Mart's Financial Performance And Its Strategic Goals
Wal-Mart Competitive and Marketing Analysis
Wal-Mart Marketing Analysis
Selecting An Appropriate Strategy (low cost, differentiation or niche) For Maximizing Organization's eturn on Shareholders
Potential Wal-Mart Merger & Acquisition Strategy
Incentive and eward Strategies for Wal-Mart Employees
Evaluating How Current Strategies Define Ethicacy Levels at Wal-Mart
Wal-Mart atio Analysis
Income Statement Analysis, 2007 -- 2011
Wal-Mart Capstone Analysis
Mission and Vision Statement Analysis
The foundations of the Wal-Mart value chain and its global success is predicated on how well this company aligns every internal system and strategy to their unique value proposition of Low Price Everyday (LPED) leadership. This unique value proposition galvanizes the mission and vision statement of Wal-Mart and is one of the foundations of their success and continued growth.…
Nabil Alghalith (2005). Competing with IT: The UPS Case. Journal of American Academy of Business, Cambridge, 7(2), 7-15.
Jonathan Birchall. (2009, October 23). Walmart set to focus on growth outside U.S.. Financial Times,16.
Susan Christopherson 2007. Barriers to 'U.S. style' lean retailing: the case of Wal-Mart's failure in Germany. Journal of Economic Geography: Transnational Retail, Supply Networks, and the Global 7, no. 4 (July 1): 451-469.
Richard De Santa. (1998, January). Technology. Supermarket Business, 53(1), 18.
Mission and Vision tatement Analysis
Linking Wal-Mart's Mission and Vision to Their trategic Goals and Objectives
Assessing the Link Between Wal-Mart's Financial Performance And Its trategic Goals
Wal-Mart Competitive and Marketing Analysis
Wal-Mart Marketing Analysis
Potential Wal-Mart Merger & Acquisition trategy
Incentive and Reward trategies for Wal-Mart Employees
Evaluating How Current trategies Define Ethicacy Levels at Wal-Mart
Wal-Mart Ratio Analysis
Income tatement Analysis, 2007 -- 2012
Analysis of WalMart Corporation
Mission and Vision tatement Analysis
All internal systems, processes, external stakeholder management initiatives, supply chain management, sourcing, quality management and merchandising initiatives in WalMart revolve around the fulfillment of the expectations they create with their customers daily. Their Low Price Everyday (LPED) value proposition permeates their entire value chain, galvanizing it around the mission of delivering exceptional value on a consistent basis to customers. The mission and vision of WalMart rely on LPED as the catalyst and unifying…
Sources: (Wal-Mart, 2012) (Sodhi, Son, 2009) (Gosman, Kohlbeck, 2009)
Selecting the Best Possible Strategy for Maximizing Return to Shareholders
For WalMart to deliver the greatest potential value to shareholders, they need to pursue a mid-tier market strategy that differentiates store product
Starbucks 2014 Annual Report
Cost of sales
Store operating expenses
other operating expenses
D & A Exp
Total Operating Expenses
Income from Equity Investees
Earnings before taxes
Income tax expenses
The vertical analysis shows some interesting things. First that the bottom line reveals basically nothing -- the net income in 2013 is entirely a reflection of the litigation charge for a lawsuit the company lost. So to understand the actual trend in the business one needs to look at the other line items.
Top line revenue is increasing at a fairly rapid rate, up 10% in 2014 and almost 12% in 2013. This reveals that Starbucks in this period was in a period of steady, rapid growth. The growth was spread across different business units as well, indicating a healthy broad-based…
Measuring inventory effectively is paramount in keeping financial statements of a company up-to-date. Inventories represent a large proportion -in most companies- of short-term assets on the balance sheet. If valuation method is not prudent the assets and shareholder's equity will be over or underrepresented on the balance sheet. This will give an inaccurate picture of financial statements on which an investor based his financial decisions on.
Why does the Canada Customs and Revenue Agency not allow companies to use LIFO when calculating Net Income for Income tax purposes?
In economies with high inflation and industries with rising prices using LIFO inventory system, new sales will be matched against higher production costs, therefore net income will be lowered. The cost of goods sold will be higher and inventory value is consequently lower on the books. Organizations can manipulate the inventory method to lower tax liability.
What would happen to…
Apple and Google: Interpretation of Financial Statement Changes
Based on the computations presented in Table 1, Apple comes across as being the best performer. My assertion is in this case largely based on the changes in the revenue figure. In the two years under consideration, the company registered a 66% increase in revenues. The enhanced revenue could in this case be an indicator of enhanced sales as a result of aggressive marketing or new product launch. An increase in unit selling price of the company's products could also have contributed to the change in revenue. Google on the other hand managed to increase its revenues by 29% within the same period. It is however important to note that in each case, the cost of goods sold also increased significantly.
From a managerial perspective, the information derived from the computations and comparisons in Table 1 are useful for a number of…
Duchac, J.E., Reeve, J.M. & Warren, C.S. (2006). Financial Accounting: An Integrated Statements Approach (2nd ed.). Mason, OH: Thomson Higher Education.
Yahoo Finance. (2012). Apple Inc. (APPL)-NasdaqGS. Retrieved October 24, 2012, from Yahoo Finance website: http://finance.yahoo.com/q/is?s=AAPL+Income+Statement&annual
Yahoo Finance. (2012). Google Inc. (GOOG)-NasdaqGS. Retrieved October 23, 2012, from Yahoo Finance website: http://finance.yahoo.com/q/is?s=GOOG+Income+Statement&annual
financial statements of Barnes and Noble and Borders Group for fiscal year 2009. The companies' statements provide information about their financial health, as well as discuss plans for the coming fiscal year.
The balance sheet reveals detailed information about each company's assets, liabilities and owners' equity (net worth). It is based on the accounting equation Assets = Liabilities + Stockholders' Equity; the two sections of the balance sheet must equal each other just as they do in the equation. This equation represents the basic accounting premise: assets, the means used to operate the company, are balanced by a company's financial obligations, along with the equity investment brought into the company along with its retained earnings (Investopedia, n.d.).
As both the Barnes and Noble and Borders Group statements show, there are four main financial statements:
The balance sheet, which shows what a company owns and what it owes at a fixed…
Investopedia Staff (n.d.). Reading the Balance Sheet. Retrieved on 4/6/2011 from http://www.investopedia.com /articles/04/031004.asp
U.S. Securities and Exchange Commission. 2007. Beginners' Guide to Financial Statements. Retrieved on 4/6/2011 from http://www.sec.gov/investor/pubs/begfinstmtguide.htm
Investor Dictionary, (n.d.). Off-balance sheet activities. Retrieved on 4/6/2011 from http://www.investordictionary.com/definition/off-balance-sheet-activities
Siegel, J.G., & Shim, J.K. (2006). Barron's Accounting Handbook. New York: Barron's Educational Series.
J. Heinz Company
Strengths: it is short and concise; it is constructed in a formal means which also uses specialized language to promote the company's commitment to customers and employees.
Shortcomings: it lacks an introduction and it does not mention the well-being of other categories of stakeholders aside customers and employees
Strengths: offers detailed input on the company's visionary goals; includes several categories of stakeholders
Shortcomings: it is rather long and too detailer, creating as such the possibility for the reader to lose interest and not remember what he read; seems explicative and responsive to the criticism of environmental threats to which the company has been subjected.
ank of vision statements from best to worst: I (4); II (1); III (2); IV (5); V (3)
ed Hat 2009 Annual eport, http://files.shareholder.com/downloads/HAT/763006950x0x304106/3145E646-AE56-4FE1-9C59-B79F4491C4C5/FY09_Annual_eport_on_Form_10-K.pdf last accessed on November 2, 2009
Red Hat 2009 Annual Report, http://files.shareholder.com/downloads/RHAT/763006950x0x304106/3145E646-AE56-4FE1-9C59-B79F4491C4C5/FY09_Annual_Report_on_Form_10-K.pdf last accessed on November 2, 2009
2009, Red Hat Website, http://www.redhat.com last accessed on November 2, 2009
As a customer, I will expect quality services from BDO.
Mutual funds portfolio turnover is one of the easily explained investment qualities for investors. While expressed as percentages, it shows the portion of securities in the fund's portfolio of those sold and bought in a year. All these information is found in the reports and financial statements we present. When the lower percentage figure is reported, it will equate to a long portfolio-holding period. For example, if the turnover is 10% it means that the portfolio would be reconstituted after five years. On the other hand, when the turnover is 100% the portfolio will be reconstituted in one year. I will select one with 100% turnover because it can be reconstituted in a period of only one year (Feldman & Libman, 2011, p. 43). This will be economical and profitable instead of waiting for a long period to be reconstituted.…
Feldman, M. & Libman, a. (2011) Crash Course in Accounting and Financial Statement Analysis. Brooklyn, NY: John Wiley & Sons.
Epstein, L. (2012). The Business Owner's Guide to Reading and Understanding Financial Statements: How to Budget, Forecast, and Monitor Cash Flow for Better Decision Making. Brooklyn, NY: John Wiley & Sons
Accounting Methods and Taxpayer Income
Depending on the type and size of company you own, the methods used to conduct your business accounting can vary greatly, and these differences may have significant impact on the eventual amount of income declared to the Internal evenue Service when you file taxes. Sole proprietors and small business owners who have not fully incorporated typically rely on cash-basis accounting, which is the "major accounting method that recognizes revenues and expenses at the time physical cash is actually received or paid out" (Investopedia, 2011). Using this accounting technique is simpler for small businesses that operate on a local level, and allows the business owner to avoid the costs of hiring a professional bookkeeper. Cash-basis accounting also leads to a greater degree of manipulation, in the form of "under-the-table" payments, handshake agreements and deliberate fabrication of expenses. Large companies and corporations opt for the second major…
Accrual accounting (2010, May 09). Forbes Financial Glossary, Retrieved from http://www.forbes.com/sites/forbesfinancialglossary/2011/07/12/accrual-accounting/
Cash basis accounting. (2011, June 21). Investopedia, Retrieved from http://www.investopedia.com /terms/c/cashbasis.asp?partner=forbes-pf
financial statements of Marriott Hotels and discusses measurement bases they employ. The essay also surveys the literature for current thinking on fair value measurement.
According to the International Financial Reporting Standards (IFRS), measurement "involves assigning monetary amounts at which the elements of financial statements are to be recognized and reported" (Deloitte, 2011). Accounting measurement consists of quantifying financial information in dollars or units. These measurements are then used to report information to internal and external users through the use of financial statements that accountants prepare. Financial accounting measurements may be recorded at historical cost or adjusted to reflect current market values (Conjecture Corporation, 2011).
Generally Accepted Accounting Principles (GAAP) require companies to record balance sheet information using a fair value accounting measurement. Companies must therefore use this measurement technique to value assets and equity investment at the current market rate which thee items would bring if they sold in an…
Barth, M.E. (2006). Including estimates of the future in today's financial statements. BIS Working Paper No. 28. Available at SSRN: http://ssrn.com/abstract=947525
Cairns, D. (2006). The use of fair value in IFRS. Accounting in Europe 3, 5-22. Available at:
Conjecture Corporation. (2011). What is an accounting measurement? Retrieved August 30, 2011 from: http://www.wisegeek.com/what-is-an-accounting-measurement.htm
Health Management and Financial Statements
Describe the four basic financial statements. What are some ways in which accounting for health care organizations (HCOs), especially not-for-profit (NFP) ones, tends to differ from accounting in other industries?
According to the textbook Essentials of Health Care Finance, "the primary outputs of financial accounting are four financial statements that detail the organization's current financial position and how the organization reached that position over some period of time (usually 1 year)" (Cleverley, Song & Cleverley, 2012). These four financial statements are 1.) Balance Sheet, 2.) Statement of Operations (or income statement or statement of revenues and expenses), 3.) Statement of Cash Flows, and 4.) Statement of Changes in Net Assets (or statement of changes in net assets). Health care organizations (HCOs) utilize each of these four financial statements under guidelines known as the Generally Accepted Accounting Principles (GAAP) to ensure an accurate financial accounting of…
Cleverley, W., Song, P., & Cleverley, J. (2012). Essentials of health care finance. Jones & Bartlett Learning.
Friedman, M. (2013, September 16). Groups trying to make hospital prices clear. Arkansas Business. Retrieved from http://www.arkansasbusiness.com/article/94632/groups-trying-to-make-hospital-prices-clear
Financial statements are essential in measuring and assessing the real financial strength and position of a company. These financial statements provide quantifiable data for reports and help an individual to obtain an understanding of a company's forthcoming forecasts and risks (Weygandt et al., 2008). The purpose of this paper is to review the financial statement of Doctors Hospital in the two years 2013 and 2014 and analyze these financial statements and its financial well-being. In addition, the paper will outline the role played by advanced practice nurses in the financial welfare of the organization.
Implications of Economics for Advance Practice Nurses. The ole of the Advance Practice Nurses in the Financial Wellbeing of Healthcare Organizations
In general, very minimal studies have been undertaken in the United States regarding cost effectiveness and economic impact of primary care delivered by advanced practice nurses. esults from different research studies indicate that, on the…
Baker, H. K., Powell, G. E. (2005). Understanding Financial Management: A Practical Guide. United Kingdom: Blackwell Publishing.
Hughes, R. G., & O'Grady, E. T. (2008). Advanced practice registered nurses: The impact on patient safety and quality. In Naylor, M. D., & Kurtzman, E. T. (2010). The role of nurse practitioners in reinventing primary care. Health Affairs, 29(5), 893-899.
Naylor, M. D., & Kurtzman, E. T. (2010). The role of nurse practitioners in reinventing primary care. Health Affairs, 29(5), 893-899.
Nursing World. (2012). ADVANCED PRACTICE NURSING: A NEW AGE IN HEALTH CARE. American Nurses Association. Retrieved 14 January, 2016 from: http://www.nursingworld.org/FunctionalMenuCategories/MediaResources/MediaBackgrounders/APRN-A-New-Age-in-Health-Care.pdf
McDonalds is a fast food restaurant chain that operates globally. The company is the leader in the industry, and is one of the most recognized brands in the world.
The income statement can reveal a number of things about a company. First, it reveals the revenues that the company has earned. McDonalds has seen its revenues fluctuate over the past three years. In 2012, revenues were $27.567 billion. They increased to just over $28 billion in 2013 but then fell back again in 2014 to $27.441 billion. The second valuable piece of information from the income statement is the company's expenses. These are broken down into different categories but overall the operating expenses were reduced in 2013 and then spiked back up in 2014. As a result of these changes, the third bit of useful information is revealed -- the net income. McDonalds has seen a substantial decline…
2014 McDonalds Annual Report. Retrieved October 17, 2015 from https://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/McDonald 's%202014%20Annual%20Report.PDF
"Guide to SEC Filings" (no date). In possession of the author.
MSN Moneycentral (2015) McDonalds Corp. Retrieved October 17, 2015 from http://www.msn.com/en-us/money/stockdetails?symbol=MCD&ocid=qbeb
Yahoo! Finance (2015) McDonalds: Cash flow statement. Retrieved October 17, 2015 from http://finance.yahoo.com/q/cf?s=MCD+Cash+Flow&annual
Nikes Income Sheet
The latest Nike 10-K covers the period ending 31st May 2016 (Nike, 2016). Looking specifically at the consolidated income statement, this is very short, and although there is a subcategory for gross profit. Nike, 2016). This is the two step format, as there is a breakdown of the categories, operating income is separated from non-operating income and there is a subcategory for gross profit, these indicate the two step process (PWC, 2016). However, in the consolidated income statement, the information is very limited. Looking though the accounts, the notes do provide more detail, such as Item 7 which provides details on sources of income and in come by type of sales, more details of lease and capital costs, while note 8 provides a more detailed breakdown of long-term debt (Nike, 2016),.
The income statement is meant to provide an accurate representation of the financial position of the…
Accounting Study Guide. (2016), Revenue Recognition Principle, available at http://accountinginfo.com/study/fs/revenue-101.htm
Nike. (2016), Form 10-K. available at http://s1.q4cdn.com/806093406/files/doc_financials/2016/ar/docs/nike-2016-form-10K.pdf
PWC. (2014). Financial Statement Presentation, available at https://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc-guide-financial-statement-presentation-2014.pdf
Financial Statements: Hay and Barnabas Company
There are five adjustments that need to be made before the financial statements of Hay and Barnabas Company are prepared at year end. Show the effect of each of the following (a -- e) on the accounting equation
The accounting equation is essentially indicative of the relationship between assets, liabilities, and the owner's equity in a particular business. According to Clarke (2011), the three components reflect the company's financial position. Assets are the resources owned by the business and liabilities are the claims other parties, such as creditors, have in the business. Investors also contribute to a business and buy ownership hence have a claim in the business. The following are the adjustments deemed necessary and the effect they had on the components of the accounting equation:
a) Equipment purchased on January 1, 2003 with a useful life of 12 years and no salvage…
Clarke, E.A. (2011). Accounting: An Introduction to Principles and Practice. South-Western: Cengage Learning
Warren, C.S., Reeve, J.M. & Duchac, J.E. (2013). Financial Accounting. South- Western: Cengage Learning.
Financial Statement Analysis
In this particular essay, I undertake the financial analysis of five companies, all of which are set in the retail industry. Three of the companies, Tesco Plc, Sainsbury's and Wm Morrison Supermarkets plc are some of the largest food retailers in the United Kingdom. Ocado which is the fourth company is the largest online food retailer in the whole world and lastly Crawshaw Group PLC is also in the business of operating a chain of retail food stores. Every company will be discussed individually and it will encompass information regarding the history of the company, the products and the services, the consumers and also other information.
Tesco Plc is a company that is based in Britain and is the largest food retailer in the United Kingdom. It is one of the biggest retailers in the globe as it is the third in position in the retail industry…
Accounting for Management. (2014). Return on common stockholders' equity ratio. Available: http://www.accountingformanagement.org/return-on-common-stockholders-equity-ratio/
Bloomberg. (2015). Crawshaw Group Plc company information. Retrieved from: http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=CRAW:LN
Bloomberg. (2015). Wm Morrisons Supermarket plc. Retrieved from: http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=MRW:LN
Investigating Answers. (2014). Operating Leverage. Available: http://www.investinganswers.com/financial-dictionary/ratio-analysis/operating-leverage-2795
technical information on the statement of cash flow, including what the main sections of a cash flow statement are, how to create each of them and what are the main elements that need to be gathered for a successful cash flow statement. The general format of a cash flow statement was discussed in the beginning so as to give an overview of what the CFS should usually contain.
One of the main issues that the document helped clarify was how the activities of a company can be included in one of the three categories mentioned (operating, investing or financing). In each case, the final figure on each of these CFS categories is important to reveal how the company is performing in terms of each specific operation.
Finally, the document referred to the several different methods that can be used to create a cash flow statement, including the advantages and disadvantages…
Working With Financial Statements:
There are four main principles that have led to the success of the accounting system which the accountants use in preparing financial report of a company but we shall only focus on two. One of the principles is the evenue ecognition Principle whereby the accountant is expected to present a financial report by indicating the cash flow of the company. As one of the main accounting principles in the U.S. Generally Accepted Accounting Principles, revenue recognition can basically be considered as how revenue is recognized or treated. On the basis of cash accounting, revenue is simply recognized when cash is received despite the performance of the services and delivery of goods. On the contrary, revenue is recognized in accrual basis accounting when they are realizable or earned regardless of when cash is received. However, revenue is recognized when two conditions are met i.e. The completion of…
Davoren, J. (n.d.). Four Types of Adjusting Journal Entries. Retrieved October 21, 2012, from http://www.ehow.com/info_8210116_four-types-adjusting-journal-entries.html
"Expenses Recognition -- The Matching Principle." (2008, July). Accounting Financial & Tax.
Retrieved October 21, 2012, from http://accounting-financial-tax.com/2008/07/expense-recognition-the-matching-principle/
"Revenue Recognition." (n.d.). Tenrox. Retrieved October 21, 2012, from http://glossary.tenrox.com/Revenue-Recognition.htm
Overview of Current Situation'
ABC is generally in good health. he income statement shows that the company saw an increase in revenue for 2009, and this translated to an increase in net income. he company's expenses as a percentage of revenue were 13.6%, down from 15.1% the year before. COGS was 69.6% of revenue, versus 78.2% the year before. he company maintained a similar level of works-in-progress inventory over the course of the year, such that the improved operating performance did not derive from a decrease in inventory. Manufacturing overhead as a percentage of sales also declined. In essence, the improved profit performance comes from incremental improvements in cost control that had the cumulative effect of reducing the overall expenses as a percentage of revenue.
he balance sheet shows that the company's overall value has increased. he key increase here is an investment in new equipment. he value…
There is evidence of continual improvement at ABC. First, there is the fact that the company grew its revenues without a corresponding growth in the expenses. This occurred on multiple fronts. ABC increased its gross margin, which seems to indicate improved manufacturing efficiency. The fact that the company was able to increase its sales, lower its COGS, and only experience a modest increase in its work-in-progress inventories indicates that it has become a more efficient manufacturer. It is difficult to extrapolate continual improvement from a one-year time sample, but the evidence shows that the company was more efficient in 2009, and that is cause for optimism that it will continue to improve going forward, especially given new investments.
The new investments in manufacturing equipment is another good sign. The company can point to this investment in new automated manufacturing equipment as an astute investment with a small amount of debt and a some equity as an investment in future production and revenue growth. This is evidence that the company is not resting on its laurels, but investing some of its success today in building future success in the future.
Furthermore, the company was able to control the growth of its non-manufacturing expenses. Even sales expenses as a percentage of revenue fell, from 7.0% to 6.8%. Other administrative expense categories fell even further as a percentage of sales. These figures indicate that the company has improved its administrative productivity -- it is getting more sales from roughly the same administrative expense. Sales expense increased but at a lower rate that the increase in revenues. Both of these figures also point to a company that has focused not just on selling more, but on improving its efficiency across all expense categories. Often, a company can improve in one or two areas with some focus, but to improve in all areas across the board, while growing, is a sign of mature management that is running a sustainable business. There is good cause for optimism regarding the future of ABC based on its 2008 and 2009 financial statements.
Letter of Intent: Personal Statement
To College of ____ Admissions Committee,
I am applying for the Master's degree in the School of Social Work, because I truly believe that it is my life's calling to make people's lives better by helping them with their daily struggles through practical help and techniques for self-empowerment. This is no easy task for either party, but I believe that if both parties are committed to the task of improvement and the task of making things better, then all things are possible. The strengths that I bring to this endeavor are a full commitment, a tremendous amount of empathy, and practical experience and theories under my belt to work for concerted improvements for other people.
Imagine that you have had the social work career of your dreams. Now, you have retired and written an autobiography.
I've been extremely blessed and fortunate to have a long…
Fellowship and Career Objective
Throughout more than seven years of service to the healthcare industry, working in an administrative capacity as a liaison between insurance providers, patients and third-party payers, I have dedicated my professional life to the provision of medical services via the managed care industry. While working to maintain regular lines of communication with case managers, social workers, management staff, outside agencies and various hospital departments, the opportunity to immerse myself in the logistical operations of a major health care provider has proven to be invaluable. Performing fundamental duties that are integral to the successful delivery of health care services, from the identification of barriers to reimbursement via benefit investigations to determining patient eligibility for non-profit foundations, has provided me with a comprehensive base of knowledge and skills. Rather than rest on my proverbial laurels, however, I have committed myself to the task of parlaying this initial experience…