The Health and Operational State of Nybrostrand Company Essay

Short Term Investments – totaled $220,000.00 in year 6, a gain of $21,500.00 or +10.8%.

To understand how the total assets changed within a year, we shall look at each aspects of the assets. In the cash and cash equivalent, we have seen that the cash in hand decreased in 2013 from $3,931 to $3,421 in 2014. This shall shows that the company may have spent cash on inventories and other goods for the benefit of the company. In the receivables aspect, the amount of receivables has begun to increase from 2013 to 2014 with an increase rate of 11.6%. In other terms, it increased from $6,967 in 2013 to $7,822 in 2014. This was an infinitesimal increase and it shows that the company had a lot of companies owing them for the purchase of the Walt Disney Products and land usage. Another way of saying is that other companies may be purchasing land from Disney to sell their products and expand their companies to wider

| (TCO 1) The Accounting Equation is used to develop the organization's financial reports. (1) Describe what assets value would be if Liabilities are $12,000 and Owners' Equity is $50,000 by showing the Accounting Equation (10 points), and (2) provide an example of two asset accounts that could contain the value. (10 points)

This ratio takes into consideration the current assets and current liabilities from the balance sheet

Identify the financial statement(s) where each of the following items appears. Use I for income statement, E for statement of retained earnings, and B for balance sheet.

The accounting equation: Assets = Liabilities + Owner’s Equity. Assets are the resources of the company. Examples include cash, land, buildings, and equipment. Liabilities are “outsider claims”, the company’s obligations to creditors. Examples include accounts payable, notes payable, and income taxes payable. Owner’s Equity represents “insider claims” of the company or the owner’s share of the assets. If a business is keeping accurate records this equation should always be in balance.

Assets | Current Assets | | Cash And Cash Equivalents | 222,640   | 229,299   | 246,400   | | Short Term Investments | -   | -   | -   | | Net Receivables | 82,235   | 63,136   | 47,178   | | Inventory | 17,016   | 14,345   | 12,295   | | Other Current Assets | 31,228   | 23,905   | 16,211   | | Total Current Assets | 353,119   | 330,685   | 322,084   | Long Term Investments | -   | -   | -   | Property Plant and Equipment | 492,022   | 444,094   | 403,784   | Goodwill |

Assets and liabilities are bifurcated in current and non-current. Current asset is defined as any asset which can be converted into cash readily and will be used within one accounting period normally 1 year e.g. Receivables, Inventory, Prepaid Expenses.

Asset Account – Can be organized into current and non-current category. Types of current accounts would be goods owned by a company with the result of selling items or a written note(s) receivable, in which a promise is made to repay services rendered. A non-current item is any item used for the efficient running of a company such as equipment like computers. This referred to as a fixed asset. (MyAccountingCourse.com, n.d.)

The company’s current assets are just over two times its current liabilities, giving it a current ratio of 2.08. This is a sign of financial strength. The Quick ratio (current assets-inventory then divided by current liabilities) is 0.96. This measures the company’s ability to come up with cash in a matter of hours to days. It has working capital (current assets-current liabilities) of $7,508,998. With a working capital per dollar of sales of 15%. This is adequate given the high inventory turn.

This is the source of the value of the company to its stockholders and to the stock market analyst (Yahoo Finance, 2013). The Balance Sheet may also indicate a negative Shareholder Equity which means the shareholders are losing money. The Balance Sheet also illustrates the trends in borrowing the company has used in the last year. The long term debts that are listed on the balance sheet compared to assets may indicate a problem if the debts are called in by the loaner for some unforeseen reason. There are multiple methods or ratios for determining the future profitability of a company indicated by the line items on the balance sheet (Mertz.J., 2000).

The accounting equation is, Assets are equal to Liabilities plus Stockholders’ Equity. Assets are resources owned by a business. Liabilities are the debts and obligations of the business. Liabilities represent claims of creditors on the assets of a business. Stockholders’ equity represents the claims of owners on the assets of the business. This equity is divided into two parts: common stock and retained earnings. The balance sheet reports assets and claims to assets at one specific point in time. Claims to assets are subdivided into two categories: claims of creditors and claims of owners. The accounting equation must always balance. Each transaction has a dual effect on the equation. As an example if an individual asset is increased,

Assets Liabilities and Owener`s EquityCurrent assets $2,170 Current liabilities $1350Net fixed assets $9,300 Long-term debt $3980 Shareholders` equity $6140Total assets $11470 Total liabilities and

7. Debt to capitalization = Long-term Debt in Balance Sheet / Long term debt + Net Assets in

In the first year, equity is not given. Therefore, we must calculate equity as a plug variable. Since total liabilities & equity is equal to total assets, equity can be calculated as: