Financial Statement : The Balance Sheet

A balance sheet will allow one to map out their assets and liabilities for a given period. These periods should be no longer than a year apart. In understanding this data, one can make informed decisions regarding what they can borrow, how much money will need to be saved, and what can be invested. An income statement will present gains and losses in a given period.

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

First, the inventory account increased from 35.47% of total assets in 1996 to 58.01% in 1998, which was uncharacteristically large. Second, the cash accounts and marketable securities decreased significantly. Finally, long term debt increased enormously over the three years. These items are major red flags for business operations.

While inaccurate accounting can cause misleading information about the company, every successful company should develop an income statement and balance sheet when monitoring financial growth. Also, formulating a horizontal and ratio analysis creates an accurate trend of the company spending behavior and debt-to-ratio venerability. A balance sheet can be considered as the bloodline of the company, allowing a quick view of financial fluency which could be attractive to outside investors. Last but not least, the income statement presents a hard result of gains, liabilities, revenues and debt within a yearly

As money is spent statements are updated to reflect the accounts affected by the spending. Managers use these financial statements, such as an income statement or balance sheet, to check the progress of plans and programs. Management uses the information provided by financial statements to monitor financial resources and activities. The income statement shows the results of the organization's operations over a specific period, such as revenues, expenses, and profit or loss. The balance sheet shows what the organization is worth (assets) at a particular point and the extent to which those assets were financed through debt (liabilities) or owner's investment (equity) (Bank of America, 2007).

Exhibit 6, 8, and 9 (figures in $ millions) provides selected balance sheet items for Ford, General Motors, and DaimlerChrylser. The given information indicates that Ford carries the highest amount of cash and marketable securities among the three companies. In 1999, Ford had $25,173 of cash and marketable securities while General Motors and Daimler-Chrylser have only $12,140 and $9,163. Comparing at an industry level, we as a team

The following four companies are related to the companies that have been in review over the last four weeks. These four following companies show how well the company has been doing over the last two years or not so well. The company has pulled their balance sheets and income statement to see if all the company’s financial needs are being met. If the company’s needs are not being met, the company will show where the company needs to cut back and where the company needs to improve.

The professional’s feet were facing forward. The position let her body being balanced. It would let her bump the ball perfectly in the air. If her feet were facing at a different direction like before, she might’ve lost her balance since she was standing now.

1.    Currently product Axe is charged $3,635,223 depreciation on the income statement of Andrews. Andrews plans to make investment that will increase this depreciation to take advantage of changes in the tax code. Will this?a.    Decrease net cash from operations on the cash flow statementb.    Increase net cash from operations on the cash flow statementc.    Just impact the balance sheet.d.    Have no impact on the net cash from operations as depreciation appears in both cash flow and income statementAnswer

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

The “financial statements are formal reports providing information on a company's financial position, cash inflows and outflows, and the results of operations” (Hermanson, p.22). There are four main components that make up a financial statement. The four parts are, balance sheet, income statements, cash flow and, statement of owner’s equity. The balance sheets role is to define the company’s assets liabilities and revenue of the business. The income statement shows the income within the company. Cash flow reviews the position of the company by cash payments and receipts. Lastly, the statement of owner’s equity shows the amount of earnings, stock and other capitals of people in the company. (Hermanson, p.34-35).

The income statement are the financial statements outline of a firm’s performance over a period of time, either quarterly or yearly. In the income statement of Southwest Airlines Co., the statement of operations (in millions) provides the following information; “The operating revenues at the year ended, December 31, 2016 total is $20,425 million, the operating expenses total is $16,665 million with an operating income of $3,760 million, and the net income total is $2,244 million.” The balance sheet are the financial statements showing a firm’s accounting worth on a particular point in time, a snapshot of the firm. In the balance sheet of Southwest Airlines Co., the snapshot of the sheet (in millions). “The current assets at the year ended,

This GAAP holds that companies should record revenue when earned but not when it is received. This also follows the guidelines of accrual basis accounting. When using the revenue recognition principle one must remember that losses must be recorded when their occurrence becomes probable, whether or not it has actually occurred. From this section of the 10-k we learn that the company bases it future sales return on a historical standpoint. This lets the company get a good estimate on how much sales revenue they might be able to produces this. This helps them better prepaid for the next year.

Prepared By Christopher Reynolds For Professor J. Tripp San Francisco State University August 13, 2007

The balance sheet reports the resources of the company with three main components broken down into an algebraic equation (assets = liabilities + owner equity). The income statement reports the amount of net income earned by a company during a specific time. The net income is an excess of revenue over expenses. The statement of cash flow reports the amount of cash collected and paid out by a company in the following three ways: operating, investing, and financing (Albrecht, Stice, Stice, and Swain, 2008).