mbafpx5010lancegilassessment1

.pptx

School

Capella University *

*We aren’t endorsed by this school

Course

MBA FPX 50

Subject

Accounting

Date

May 16, 2024

Type

pptx

Pages

Uploaded by MagistrateStrawEchidna154

Accounting Methods for Leaders Capella University - MBA-FPX5010 Accounting Tools & Practices Lance Gil Assessment – 1

Urban Outfitters Corporation “Urban Outfitters is a lifestyle retailer dedicated to inspiring customers through a unique combination of product, creativity and cultural understanding. Founded in 1970 in a small space across the street from the University of Pennsylvania, Urban Outfitters now operates over 200 stores in the United States, Canada and Europe, offering experiential retail environments and a well-curated mix of on trend women’s and men’s clothes, from boho dresses, denim and graphics to shoes, hats, and backpacks, as well as beauty, intimates, swim and a collection of handpicked vintage clothing. Urban Outfitters also carries everything you need to decorate your small space, apartment or dorm, with a UO Home collection that includes bedding, tapestries, rugs, shower curtains and furniture. Our Music + Tech collection is a go-to destination for vinyl, record players and tech accessories” (URBN, 2022). https://fourweekmba.com/urban-outfitters-business-model/

What Are Financial Statements Financial statements are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand. These statements are audited for accuracy and are included in the annual reporting. Balance Sheet Overview of Assets, liabilities and stockholder’s equity for a given time frame Income Statement Revenues and expenses for a specific time frame Cash Flow Measurement of how well a company can generate cash to pay financial obligations Stockholder Equity Statement Changes in stockholder equity for a given period Comprehensive Income Statement Changes in net assets not listed on the income statement

Why Do We Need Financial Statements “A company's financial statements provide insight into a company's financial position, profitability, and growth potential . Taken together, financial statements allow analysts to conduct fundamental analysis to evaluate a stock's value and growth prospects. Financial statements also can signal red flags about financial instability or accounting improprieties” (Investopedia, 2024).  Financial statements provide a snapshot in time of the company’s financial health looking at their revenue, expenses, profitability and debt.  The objective of financial accounting and statements that come out of that practice is to present “fairly the financial position of a company to current and potential stockholders, creditors, security analysts, and other interested parties.  Financial statements are governed by the standards of financial accounting.  Credible financial management is critical to the integrity of business and investors to obtain accurate data to make decisions.

Components of A Financial Statement The major elements of the financial statements (i.e., assets, liabilities, fund balance/net assets, revenues, expenditures, and expenses ) are discussed below, including the proper accounting treatments and disclosure requirements. Assets Assets are things that a company owns and have value. Assets are typically recorded on the balance sheet at their original cost (also called historical cost) less accumulated depreciation, which is an expense that reflects the wear and tears on assets over time. Assets include fixed assets and current assets. Typically, businesses like to keep track of their assets in order to measure how much they are worth or to serve as collateral for borrowing money or other financing activities. Assets also help investors make decisions on whether the company is doing well financially since they can see what assets are available to be used for future growth. Liabilities Liabilities are obligations of the business that may need to be paid back over a period of time. These would include both short-term (current) liabilities such as accounts payable and long-term liabilities such as mortgages. Typically, businesses like to keep track of their liabilities in order to measure the total amount that they owe or are obligated to payout. Liabilities also help investors make decisions on whether the company is doing well financially. Since they can see how much debt the business has taken on and if it may be too much to handle. Shareholder’s Equity Equities are claims by owners of a business on its assets after all debts have been paid off. These would include things such as common stock, preferred stock, treasury stock (stock repurchased by a company), and accumulated other comprehensive income (AOCI). Typically, businesses like to keep track of their equities in order to measure ownership interest or how many shares of a company an individual has.

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