...BALANCE SHEET FORMULAS The balance sheet shows the assets, liabilities and equity of a business at a point in time. You can connect an ending balance sheet (e.g., end of year) to a beginning balance sheet (e.g., start of year) through the simple idea that: what you start with, plus what you add to it, minus what you take away from it, is what you end with. Cash = (BS) Previous Cash + (CF) Total Cash In – (CF) Total Cash Out Accounts Receivable = (BS) Previous A/R + (IS) Sales – (CF) Cash Sales – (CF) A/R Receipts Inventory = (BS) Previous Inventory + (Inv) Purchases – (IS) COGS Capital Assets (current value) = (BS) Previous Value – (IS) Depreciation Accts Payable = (BS) Previous A/P + (Inv) Purchases – (CF) Cash Purch – (CF) A/P Payments Accrued Expenses = (BS) Previous A/E + (IS) Total Operating Exp – (CF) Total Operating Exp Accrued Interest = (BS) Previous A/I + (IS) Interest – (CF) Interest Payment Accrued Income Tax = (BS) Previous A/T + (IS) Income Tax – (CF) Income Tax Payment Short-Term Debt = (BS) Previous STD + (CF) ST Loan Receipts – (CF) Repayment of Principal on STD Current Portion of Long-Term Debt = (BS) Previous CP/LTD + (Loan) Portion of LTD Becoming Current this Period – (CF) Repayment of Principal on LTD Long-Term Debt = (BS) Previous LTD + (CF) LT Loan Receipts – (CF) Repayment of Principal on LTD Owners Investment = (BS) Previous Owners Investment + (CF) Owners Investment Retained Earnings...
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...Luke Cresswell Balance sheets A document describing the financial position of a company at a particular point in time, by comparing items owned by the organisation with the amounts that it owes. An account showing the income and expenditure of a firm over a period of time. These documents are required by law in order to show people the financial strengths and weaknesses of an organisation's recent performance and current situation. They can also be used to assess the potential of a business, particularly when trend analysis is used to estimate future performances based on recent history. Both documents are based on historical data and show what has happened in the recent past. Analysing balance sheets: A balance sheet looks at the accumulated wealth of a business and an be used to assess its overall worth. It lists the resources that a business owns and the amounts it owes to others. In addition, it shows the equity provided by the owners. Equity is provided through either the purchase of shares or the agreement to allow the company to retain or plough back profit into the business, Known as reserves , rather than using it to pay further dividends to the shareholders. Elements of the balance sheet: In order to understand the layout of the balance sheet, it is important to understand the different elements listed in it. Assets: Assets can be divided into two main categories according to time: Non current assets tend to be owned by an organisation...
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...The Balance Sheet and Notes To The Financial Statements The Balance Sheet and Notes To The Financial Statements Kegunaan Neraca (Usefulness of the Balance Sheet) Balance Sheet yang dikenal sebagai statement of financial position, merupakan laporan pada saat tertentu mengenai sumber daya perusahaan (asset), hutang-hutangnya (liabilities), dan klaim pemilikan residual terhadap sumber daya (owner’s equity). Dengan menganalisis hubungan di antara pos-pos ini, maka investor atau creditor dapat mengetahui: 1. Liquidity, yaitu kemampuannya untuk memenuhi short-term obligations 2. Solvency, yaitu kemampuan untuk membayar semua current and long-term debt pada saat jatuh tempo. Comparative Balance Sheet dapat memberikan banyak informasi yang berguna bagi pihak yang berkepentingan dalam menganalisis kekuatan suatu perusahaan. UNSUR-UNSUR NERACA (Elements of The Balance Sheet) 1. Assets mencakup costs yang belum ditandingkan dengan revenue di masa lalu dan diharapkan memberi manfaat ekonomi dalam menghasilkan revenue di masa depan. Assets meliputi aktiva moneter (monetary assets), seperti cash, certain marketable securities, receivables, dan nonmonetary assets yang mencakup costs seperti inventory, prepaid insurance, equipment, patents dll 2. Liabilities, mengukur klaim para creditor terhadap sumber daya entitas. 3. Owner Equity, mengukur hak pemilik dalam total sumber daya perusahaan bersangkutan. Classified Balance Sheets Assets Current Assets Cash Investment Securities Account and...
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...The Purposes and Components of Balance Sheet and Income Statement. An income statement of an organization shows its revenues and expenses during a particular period. It indicates how revenues are converted into net income. It shows revenues documented for a precise period, and the cost, taxes as well as the expenses that were charged (Helfert, 2001). The purpose of the income statement is to tell managers and investors if an organization made profit or not during the period that is being reported. Income statement represents a period of time whiles balance sheet shows the same information but at a single moment in time (Gapenski, 2012). Challenges that Might be Encountered in Interpreting Financial Statements There are certain problems and issues that might be encountered in analyzing financial statements which demand care and Verdict. The basic problem in financial statement is that there is no theory which tells us which numbers we need to look at and how to interpret them. In the absence of a fundamental theory, financial statement analysis appears to be informal and subjective. Again many organizations, particularly the big ones, have set-ups spanning a varied range of industries. This makes it very difficult in trying to find suitable standards for evaluating financial performance. In solving this issues organizations have to put in place an underlying theory and standards (Rao, 2008). This will prevent errors and confusion that arises after reading such documents. Key...
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...Balance Sheet | Get Balance Sheet for: | View: Annual Data | Quarterly Data | All numbers in thousands | Period Ending | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 29, 2012 | | Assets | Current Assets | | Cash And Cash Equivalents | 3,932,000 | 3,952,000 | 3,207,000 | 3,387,000 | | Short Term Investments | - | - | - | - | | Net Receivables | 7,327,000 | 7,912,000 | 8,077,000 | 7,305,000 | | Inventory | 1,465,000 | 1,403,000 | 1,440,000 | 1,537,000 | | Other Current Assets | 1,481,000 | 1,736,000 | 1,598,000 | 1,480,000 | | Total Current Assets | 14,205,000 | 15,003,000 | 14,322,000 | 13,709,000 | Long Term Investments | 2,683,000 | 2,566,000 | 2,622,000 | 2,723,000 | Property Plant and Equipment | 21,875,000 | 21,650,000 | 21,671,000 | 21,512,000 | Goodwill | 27,342,000 | 27,428,000 | 27,433,000 | 25,110,000 | Intangible Assets | 7,430,000 | 7,493,000 | 7,532,000 | 5,015,000 | Accumulated Amortization | - | - | - | - | Other Assets | 7,030,000 | 7,218,000 | 7,062,000 | 6,829,000 | Deferred Long Term Asset Charges | - | - | - | - | | Total Assets | 80,565,000 | 81,358,000 | 80,642,000 | 74,898,000 | | Liabilities | Current Liabilities | | Accounts Payable | 5,658,000 | 6,325,000 | 6,767,000 | 6,393,000 | | Short/Current Long Term Debt | 2,219,000 | 3,556,000 | 4,815,000 ...
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...Analysis of Balance Sheet for 2011-2012: 1. Total assets/liabilities has increased by21.45%, which indicates that the company is growing at a faster rate. 2. Fund Utilization: There is no change in share capital, but reserve has increased by 21.71%. There are no loan funds. Net worth has increased by 21.45%. It indicate a strong financial condition because the company has utilized the funds well. 3. Asset Utilization : Net fixed assets has a marginal increase of 0.12% as compared to the net operating income of 23.11%. It indicates that the company has taken up new and better technology. 4. Receivable Management: Sundry debtors has increased by 28.30% while the net operating income has increased only by 23.11%. So, the company is not in a good financial condition. 5. Liquidity Position: Net current assets has increased by 24.94%, it indicates a good liquidity condition. 6. Cash and Bank balances: The companies cash and bank balance has increased by 2698.75% which is a bad condition because the company is not generating any revenue. 7. Net Fixed Assets, Work in Progress and Net Operating Income comparison: Net block has increased by only 0.12% as compared to the work in progress change of 104.61% which is a bad financial health. Analysis of Profit and Loss Account for 2011-2012: 1. % increase or decrease of Net Operating Income: Net operating income has increased by 23.23% that means the company is in growth phase. 2. Operating Expenses Vs...
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...James Lowe ACC201 Financial Accounting Module 1 Case Assignment Part I. Search the course background information, the Internet and/or the Cyber Library. Discuss each of the following terms. Your discussion should expand on the definition as given in the course terms. Explain why this concept is important to financial statements. A. Generally Accepted Accounting Principles. As per Investopedia, GAAP refers to "common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information." GAAP provides guidelines to prepare and present the financial statements. GAAP ensures consistency in the preparation of financial statements. It provides credibility to the financial accounting records. GAAP relates to all the aspects of recording, preparing and presenting the financial transactions. B. Liquidity. As per Investopedia, Liquidity refers to: 1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. 2. The ability to convert an asset to cash quickly. Also known as "marketability". Hence Liquidity refers to the ease of conversion of assets in cash. Current assets are more liquid that fixed assets. An organization should...
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...| Total current liabilities | $390,000 | 441,000 | | | | Long-term liabilities | | | Long-term debt | 85,000 | 65,000 | Deferred taxes | 19,000 | 17,000 | Total non-current liabilities | $104,000 | 82,000 | | | | Total liabilities | $494,000 | 523,000 | | | | Shareholders’ Equity | | | Capital | $100,000 | $100,000 | Additional paid-in capital | 15,000 | 15,000 | Retained earnings | 738,000 | 625,000 | Total equity | $853,000 | 740,000 | | | | Total liabilities and equity | $1,347,000 | $1,263,000 | Definition of a balance sheet: A balance sheet is a financial statement that summarizes a company’s assets, liabilities and shareholders’’ equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. The balance sheet adheres to the following formula: Assets=Liabilities + Shareholders’...
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...ANALYSIS OF BALANCE SHEET ASSETS Total assets increased $233.1 million, or 7%, as of December 31, 2002, primarily as a result of higher cash and cash equivalents, prepaid expenses and other current assets, and other non-current assets, partially offset by lower deferred income taxes, inventories, property, plant, and equipment, and goodwill. Current assets increased by $96.1 million, or 8%, principally reflecting increased cash and cash equivalents, prepaid expenses and other current assets, substantially offset by a decrease in deferred income taxes. The increase in cash and cash equivalents reflected strong cash flows from operations during the year, offset by contributions of $308.1 million to the Corporation's pension plans. Prepaid expenses and other current assets reflected higher prepaid pension expense associated with the funding of pension plans during the year and increased original margin balances for commodity futures. The elimination of current deferred income taxes resulted primarily from the significant liability related to the tax effect on other comprehensive income associated with the gains on commodity futures contracts during the year. Property, plant and equipment was lower than the prior year primarily due to depreciation expense of $155.4 million and the retirement of property, plant and equipment of $19.0 million, partially offset by capital additions of $132.7 million. The decrease in goodwill primarily reflected the impact of the sale of certain...
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...Balance Sheet Assets Current assets: Yr 1 Yr 2 Yr 3 Cash 88,000 58,800 76,500 Inventories 100,000 88,000 118,000 Accounts receivable 89,000 71,000 97,000 Pre-paid expenses 43,000 61,500 57,500 Other 4,700 6,300 5,950 Total current assets 324,700 285,600 354,950 Fixed assets: Yr 1 Yr 2 Yr 3 Property & equipment 42,000 61,500 79,000 Raw Materials 28,000 21,500 18,500 Less Accumulated Depreciation 7,800 11,300 14,100 Total fixed assets 77,800 94,300 111,600 Total assets 301,500 379,900 466,550 Liabilities and owner's equity Current liabilities: Yr 1 Yr 2 Yr 3 Accounts payable 68,300 62,100 86,500 Accrued wages 12,000 15,750 17,380 Income taxes payable 5,750 6,230 4,790 Other 4,250 8,920 1,650 Total current liabilities 90,000 122,000 154,000 Long-term liabilities: Yr 1 Yr 2 Yr 3 Capital repayment 50,000 100,000 100,000 Total long-term liabilities 50,000 100,000 100,000 Owner's equity: Yr 1 Yr 2 Yr 3 Investment capital 100,000 100,000 150,00 Accumulated retained earnings 61,500 59,900 62,550 Total owner's equity 261,500 259,900 212,550 Total liabilities and owner's equity 301,500 379,900 466,550 Balance 301,500 379,900 466,550 Ratios • Current Ratio: Current Assets/ Current Liabilities Yr 1: 324,700/ 90,000 = 3.6 Yr 2: 285,600/ 122,000 = 2.34 Yr 3: 354,950/ 154,000 =...
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...Revised Schedule VI Page 2 INTRODUCTION TO REVISED SCHEDULE VI Every company registered under the Act shall prepare its Balance Sheet, Statement of Profit and Loss and notes thereto in accordance with the manner prescribed in Schedule VI to the Companies Act, 1956. To harmonise the disclosure requirements with the Accounting Standards and to converge with the new reforms, the Ministry of Corporate Affairs vide Notification No. S.O. 447(E), dated 28th February 2011 replaced the existing Schedule VI of the Companies Act, 1956 with the revised one. Government vide Notification No. F.N. 2/6/2008 – C.L-V dated 30th March 2011 made the revised Schedule VI applicable to all companies for the financial year commencing from 01st April 2011. The requirements of the Revised Schedule VI however, do not apply to companies as referred to in the proviso to Section 211 (1) and Section 211 (2) of the Act, i.e., any insurance or banking company, or any company engaged in the generation or supply of electricity or to any other class of company for which a form of Balance Sheet and Profit and Loss account has been specified in or under any other Act governing such class of company. Key Features of Revised Schedule VI –Balance Sheet • The revised schedule contains General Instructions, Part I – Form of Balance Sheet; General Instructions for Preparation of Balance Sheet, Part II – Form of Statement of Profit and Loss; General Instructions for Preparation of Statement of Profit and Loss. • The...
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...BALANCE SHEET AS AT ` Crore Particulars EQUITY AND LIABILITIES Shareholders' funds Share capital Reserves and surplus Deferred revenue Non-current liabilities Long-term borrowings Deferred tax liabilities (net) Other long-term liabilities Long-term provisions Current liabilities Trade payables Other current liabilities Short-term provisions TOTAL ASSETS Non-current assets Fixed assets Tangible assets Intangible assets Capital work-in-progress Intangible assets under development Non-current investments Long-term loans and advances Other non-current assets Current assets Current investments Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets TOTAL Significant accounting policies The accompanying notes form an integral part of these financial statements. For and on behalf of the Board of Directors (A.K.Rastogi) Company Secretary For O. P. Bagla & Co. Chartered Accountants Firm Reg. No. 000018N (Rakesh Kumar) Partner M No.087537 For V. Sankar Aiyar & Co. Chartered Accountants Firm Reg. No. 109208W (M. S. Balachandran) Partner M No. 024282 Place : New Delhi Dated : 15th May 2014 Note 31.03.2014 31.03.2013 2 3 4 5 6 7 8 8,245.46 77,569.86 85,815.32 1,609.88 62,405.75 1,051.61 2,512.46 879.36 66,849.18 6,633.34 11,343.86 7,302.60 25,279.80 179,554.18 8,245.46 72,142.05 80,387.51 1,244.05 53,253.66 915.30 1,969.84 739.92 56,878.72 5,132.39 10,469.25 7,004.54 22,606.18 161,116.46 9 10 11 12 12 13 13 14 15 15A ...
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...the order in which they are expected to be converted into cash (Kimmel, Weygandt, & Kieso, 2003). Long-term investments are stocks and bonds purchased from another company. These assets are normally held for many years, hence the name long-term investments. Long-term investments can also include land or buildings owned by the company but not currently being used by the company. These investments can gain value over time which makes them an asset to a company. Long-term investments may never be sold. These investments provide a slow yet steady means of revenue as these assets gain value. This section would provide information about the company’s ability to pay long-term debts. The Property, plant, & equipment section of the balance sheet is also referred to as fixed assets. This section covers the assets that the company is going to being using for a long time in their operating activities. This includes any equipment necessary for producing products, land and building currently being...
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...Classified Balance Sheets (60 points) The following (given in scrambled order) are accounts and balances from the accounting records of Alleg, Inc., as of December 31, 2012, after the books were closed for the year. Common stock, authorized 21,000 share At $1 par value, issued 12,000 shares $12,000 Additional paid-in capital 38,000 Cash 14,000 Marketable securities 17,000 Accounts receivable 26,000 Accounts Payable 16,000 Current maturities of long-term debt 11,000 Mortgages payable 80,000 Bonds payable 65,000 Inventory 33,000 Land and buildings 57,000 Machinery and equipment 120,000 Goodwill 13,000 Patents 9,000 Other assets 45,000 Deferred income taxes (long-term liability) 18,000 Retained earnings 33,000 Accumulated depreciation 61,000 Bonds and mortgages generally have 10-30 years until maturity. Marketable securities are short-term investments that can be converted to cash in a matter of minutes. Required: Prepare a classified balance sheet with a proper heading on a spreadsheet. For assets, use the classifications of current assets, plant and equipment, intangibles, and other assets. For liabilities, use the classifications of current liabilities and long-term liabilities. Compute the total asset turnover rate assuming that total revenues in 2012 were $682,500. Round to the nearest hundredth, e.g. 3.33. Assume that Alleg’s primary competitor has an asset turnover of 2.12. What does this...
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...Balance sheet ratios The important ratios that arise from the Balance Sheet include working capital, liquidity, net worth, debtors turnover, return on assets and return on investment. Working capital ratio This ratio is also known as "the current ratio", and is one of the best-known measures of financial strength. The main question this ratio addresses is: "Does your business have enough current assets to meet the payment schedule of its current debts with a margin of safety for possible losses in current assets, such as stock shrinking or uncollectable debtors?" A generally acceptable current ratio is 2:1; but whether or not a specific ratio is satisfactory, depends on the nature of the business and the characteristics of its current assets and liabilities. The minimum acceptable current ratio is obviously 1:1 but that relationship is usually playing it too close for comfort. Because there is a time lag between paying for materials and labour used to produce your goods and the receipt of the cash for those goods, the business needs money to fund its day-to-day operations. This money is referred to as working capital and is represented by the difference between current assets and current liabilities. The formula for working out your working capital ratio is as follows: Current Assets ($120,000) / Current Liabilities ($80,000) = 1.5 : 1.0 In this case it means that there is $1.50 available in current assets to meet every $1 of current liability. This ratio...
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