Week 4 the Lemonade Stand Essay

A balance sheet is a statement of the assets and liabilities of a business going into depth of what the balance of income period.

The balance sheet is one of four types of financial statements that are analyzed to determine the well being of the firm. The balance sheet is also known as the Statement of Financial Position. The balance sheet provides the detailed information needed to determine the financial condition of the firm on a specific date, which is usually December 31. The balance sheet depicts what the firm owns (assets), owes (liabilities), and how much capital (shareholders’ equity) it has. “The name, balance sheet, is derived from the fact that these accounts must always be in balance. Assets

A balance sheet gives an overall picture of a company's financial situation by showing the total assets of a business, including liabilities plus equity. Current assets can include cash, accounts receivable, inventory and prepayments for insurance. The balance sheet is used by investors to get an idea of what the shareholders have invested, including

* An income statement is a report that contains information in regards to an organizations’ assets and financing in order to obtain those assets that is collected over a certain period of time

The balance sheet is considered a point in time statement because it elaborates on the current position of the organization. Based on the balance sheet, the organization is able to make an educated decision to know if it’s the best time to pursue additional business. The balance sheet is usually reviewed by a creditor when searching for new opportunities. Basically, the creditor determines the company’s position by subtracting the company 's liabilities from the assets. Liabilities are the debts and obligations a facility, regardless of the magnitude of the business. Once the liabilities have been subtracted from the assets, a stakeholder 's equity is determined.

A balance sheet is the most basic and essential financial statement for any organization. It contains the basic

The Return on Equity (ROE) demonstrates the amount of net profit generated as a percentage of the shareholders equity. A higher ROE is better as it displays how much profit is generated based on shareholder investment.

The return on equity ratio measures the rate of return that the company earns on the

Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. ROE measures JYC 's profitability by revealing how much profit JYC generates with the money shareholders have invested.

Investors are risk averse and want to be sure that they will get back value for their money from a company. The ratio analyses the business’s ability to pay interest expense i.e. how many times the company’s earnings can cover interest costs. The higher the ratio, the better the company’s liquidity. Use of financial leverage has been known to lead to bankruptcy of companies hence the need to ensure that a business can pay back financing costs before making an investment.

It provides information to the shareholders as to how much did their investment in the company yield. A higher percentage is a positive sign of sound utilization of the shareholder’s investment hence the higher the returns. From the calculations Wal-Mart posted 22.01% and 22.27% in the years 2012 and 2013 respectively. The results show a slight improvement on the ROE of Wal-Mart during the two consecutive years. In contrast, in the same period, Target posted 6.71% and 6.23% respectively indicating a reduction on the utilization of the equity base.

The Balance Sheet that we use at our company is a summary at that point and time of our Assets, Liabilities and worth, we

During this period, the Return on Assets increased from 5.7% in 2012 to 34.6% in 2013. This implies the number of cents earned on each dollar of assets increased from 2012 to 2013. This shows that the business has become more profitable. Equally, the Return on Equity also increased from 12.0% in 2012 to 46.5% in 2013. This similarly implies that the company in 2013 was more efficient in generating income from new investment. This, also can be attributed to the sale of the Digital Business Brand which enabled the company appraise its strategic plan.

The return on equity conveys the profits of the company as a rate of return on the amount of owners' equity. ROE uses average owners equity over the specified time period and net income. Historically a ROE of between 10% and 15% were considered average. Recently higher rates in growth industries have been greater.

The balance sheet of a company reflects exactly what a company owns and what it owes to others, making it a very important thing to be considered for stock investment.