Audit Chapter 8

The Pinnacle is a medium size business based on total asset and total revenue amount and the business is considering selling the Machine-Tech division which make external users moderately rely on Financial Statements. Also, the Pinnacle company is a privately held, but there is a large amount of debt which make financial statement be used extensively.

The income over the last three years has been fluctuating.. This tells us the company has an initial growth period. Sales also drop between years 7 and 8 and the gross profit margin decreased as well. This may be due to operating expenses. This leads to the prospect of stable future sales. The stakeholders are continuing to back the company and the company does predict sales will remain stable. The modest increase in sales does not show enough to recover without making adjustments to free capital.

We believe that each set of data has its strengths and weakness. The balance sheet data available for Pinnacle Manufacturing is extremely helpful in evaluating whether certain income statement items could be misstated. As an example, to know the trend in the asset Accounts Receivable: Trade made evaluating the income statement item Bad Debt expense easier. As a result, the financial data for the parent Pinnacle could be cross-referenced more easily.

The analysis of a company's financial statements helps in the determination of both the weaknesses and strengths of the concerned entity. Further, such an analysis helps in the determination of the future viability of firms. There are a wide range of techniques utilized in the analysis of financial statements. In that regard, it is important to note that the relevance of a horizontal, vertical as well as ratio analysis of a company's financial statements cannot be overstated. This is more so the case when it comes to the interpretation of the various dollar amounts presented in both the balance sheet and the income statement. In this text, I carry out a horizontal, vertical as well as ratio analysis of both The Coca-Cola Company and PepsiCo, Inc. The analysis' results will be critical in the evaluation of each company's performance. Findings will be used as a basis for recommendations on how each company can improve its financial status.

Accounts receivable turnover measures how many times a company can turn its accounts receivables into cash. This ratio shows how well the company is collecting credit sales from its customers. The equation for accounts receivable turnover

Trend analysis, common-size financial statements, and ratios are presented for the Brody Corporation in Figure 5.4. Assume that you are auditing Brody 's financial statements for the year ended 12/31/X8. You have performed tests of controls over the recording of gross sales and believe that the system is operating effectively and that 7 percent represents an accurate estimate of the increase in gross sales for 20X8 over the amount for 20X7. You should also assume that the financial statements for 20X6 and 20X7 are not misstated.

In the event that you are experiencing issues with funds and are thinking about obligation solidification or chapter 11, you may likewise be thinking about procuring a liquidation legal counselor. Obviously for the individuals who are in a money related trench or nearly monetary demolish, thinking of additional assets to pay a chapter 11 legal advisor can be out and out inconceivable. In spite of the deficiency of cash, it is regularly best to in any case consider at any rate counseling with a liquidation attorney before you start the procedure.

It is important because the use of the budget spreadsheet as a tool relies on the fact that data is accurate.

The loss of jobs can have a devastating impact on a community and on the morale of remaining employees. From a financial perspective, closing a division that is reporting losses will not necessarily increase the reported net income of the company. The reason: if fixed costs that have been allocated to a division that is

The productive assets of property, plant, and equipment changed dramatically in 1996 they were 5,581 to 2010 an increase to 21,706. In total current assets there was a increase in 1996 from 5,910 to in 2010 21,579. Another significant change is in long term debt in 1996 of 1,116 to in 2010 an increase to 14,041. Also an important figure to note is in the retained earning in 1996 they were 94% (15,127) to 2010 68%

Receivables Turnover: This shows the degree of realization in accounts receivables. Company N has a lower turnover rate, a lower rate implies that receivables are being held longer and the less likely they are to be collected. Also there is an opportunity cost of tying up funds in receivables for a long period of time. Company M is 29 times higher than company N.

The receivables turnover has significantly decreased over the three-year period and has indicated an improvement in the crediting procedures that have been developed within the company. The average collection period has decreased significantly to an average of 42 days, which enables the company to use this money within the business at an earlier stage.

The report aims at assessing the financial performance of the company by critically looking at different elements of its financial statements. The report will use the horizontal analyses for each number change,

Therefore, the quarterly financial statement presents financial data for analysis in timely manner for stakeholders, both internal and external (Ingram, n.d.). Furthermore, the information gained from quarterly comparisons provides a useful mode for viewing any trends, in addition to measuring business performance in relation to the business goals. The following data for the first and second quarters reflects the current conundrum our business faces. The cash for the first quarter was one hundred fifty thousand dollars, whereas, the second quarter revealed one hundred thirty-seven thousand dollars, which indicates a thirteen thousand dollar decrease, as well as, a decrease in

AppolloIspat Complex Limited incorporated the incorrect financial statements for the year ended on June 30, 2011 with the Prospectus, which do not give a true and fair view of the state of the company’s affairs. For this unfair practice AppolloIspat Complex Limited and ICB Capital Management Limited have been punished.