BA 620 exam

The fourth pair of columns on a 10-column work sheet prepared at the end of the period would be the

investors, auditors, executives of the business, etc.) an overview of the financial results and condition of the company. The major financial statements that come out of the accounting cycle are income statements, balance sheets, Statement of cash flows and Statement of retained earnings. Income statements are considered the most important of all the financial statements since it presents the operating results of an entity , e.g. revenues, expenses, and profits/losses generated during the reporting period (Bragg, 2017). Balance sheets provide reports of assets, liabilities, and equity of the entity as of the reporting date and can be considered the second most important statement because it provides information/figures about the liquidity, as well as the capitalization of a company (Bragg, 2017). Statement of cash flows exhibits the cash inflows and outflows that occur during a reporting period, which provides a useful comparison to the income statement, particularly when the amount of profit or loss reported does not reflect cash flows encountered by the businesses (Bragg, 2017). Statement of retained earnings is the least used financial statement that provides information regarding changes in equity during the reporting period and can include information such as: sale or repurchase of stock, dividend payments, and changes caused by reported profits or losses. Statements of retained earnings are often

As a creditor or lender it is of utmost importance that they have all the information necessary to make a sound decision as to whether or not they will lend money to a company. The retained earnings statement, balance sheet, and statement of cash flows will paint that picture for a creditor due to the fact that they will see where the company’s money is being earned and spent through the statement of cash flows, they will see how they are either paying out dividends to investors or reinvesting the money into the business through the retained earning statements, and how solvent the business is by looking at the balance sheet.

Profits earned or losses incurred by the corporation. Profits retained belong to the common shareholders and the share value increases accordingly.

When you’re looking at the income statement, you can get information about profitability for a particular period. This is also called the profit and loss statement. The income statement is composed of both income and expenses. This statement can be used to deduct expenses from income and report either a net profit or net loss for that period. This statement will deduct all expenses from income and then report your net profit or net loss for that period. This will allow the business owner to determine if the business is bringing in a good amount of revenue to make a profit. The cash flow statement shows the movement in cash and balance over period. The cash flow can vary depending on the operating activities, investing and financing activities. This statement provides one business owner with insight to the company’s liquidity which is vital to the growth of the business. Reinvesting in business is very important, looking at the statement of retained earnings will tell a business owner how much were reinvested in the company. After profitable period, every big business has to give some of its profits to stockholders, and keep the rest amount as retained earnings. Out of all statements, retaining statement is important to companies that sells stocks to the public. This statement can also provide you with assets and liabilities information. These informations can be used to assess the financial health of your business. The results of a balance sheet will help the business owners to show the risk of liquidity and credit. Looking at these information you can measure trends and relationships to show where in the areas you can improve. These can also be compared to similar companies to show how the business measures up to leading competitors (Ali, 2010). In summary, the financial statements can provide a business owner

Retained earnings will deprive the shareholder’s opportunity to reinvest the dividends in stock or bonds. So the shareholders are given the same amount as they would have received as retained earnings through dividends and so in such case the company incurs a cost for retaining the earnings.

Retained Earnings Statement shows amounts and causes of changes in retained earnings during the period. Time period is the same as that covered by the income statement. Users can evaluate dividend payment practices. This statement shows the changes in the shareholders’ equity account. The first line item is the beginning balance for common stock. The amount of newly issued common stock is added to the

Retained earnings represent the amount a company has left after it has paid all its expenses, taxes, and dividends. A company can return all the cash it has left after it has taken care of its obligations, but that would handicap its efforts to expand operations, make

The income statement monitors a company's progress or position and looks at the profits or losses over a period of time (Shahwan, 2008). The balance sheet monitors the pharmacies financial situation in a snapshot of time. It compiles a pharmacy 's liabilities, assets, and owners' equity (Shahwan, 2008). Although these documents are important for accounting they do not give a good snapshot of the cash flow of the pharmacy, which may potentially indicate the success of the

Essentially, retained earnings demonstrates the amount of earnings that are reinvested into the company or the loss incurred by Trump Entertainment and Resorts since operation commenced. Based on calculation Trump Entertainment and Resorts had a score of -0.056. This is relatively low and indicates that the financing of assets at Trump Entertainment and Resorts was not a result of profit retention but that they have maximized their full potential of acquiring debts in order to remain

Financial statements of the company are significant for the investors who would like to venture into the business operation. It gives them the insight whether the business is making profits or it is doomed to fail;

The annual report, unlike the 10K and the 10Q, is designed for the benefit of the stockholders and any potential investors. The annual report is published once a year, like the 10K, and usually provides information over a two or three year period to show growth or decline. The annual report is produced to be aesthetically appealing, with color, pictures, quality paper, and printing all for the benefit of current or potential stockholders. The annual report usually includes a company overview, a letter to shareowners, information on the company and its brands, products, and initiatives, its financial highlights, a list of the members of the board of directors, goals and opportunities, and then any important financial statements, information and notes, all of which is meant to promote investment and provide information.

Financial statement measures the financial performance, liquidity and strength of the firm, it is important

Financial statements are a very useful tool for individuals interested in the organization. Investors use the information to determine if it a wise decision to put their money into the organization. Investors need to determine if the organization has been successful and profitable and will continue to be successful and profitable. Creditors use the financial statements to determine the amount of credit that should be advanced to the organization. Employees generally do not look at the financial statements, but if a new executive was thinking of joining the organization, he or she may want to see the potential of the organization to make sure the investors are becoming a part of a successful organization. Management uses the financial statements on a monthly basis to determine which areas of the organization are profitable and which areas of the organization that needs to be discontinued or restructure to become more profitable.

Retained earnings are profits generated by a company that are not distributed to shareholders as dividends but are either reinvested into the business or kept as a reserve for specific objectives these being to pay off debt or purchase a capital asset. As you can see in Humbros statement of financial position under capital and reserves they have retained earnings at 9,100 in 2011 and 10,500 in year 2012 this has shown an increase which means there is more capital available for growth and higher returns on investments and shareholder equity.