financial statements would be the income statement because it can be used to examine the profits and losses of a company. Many users do also find that the balance sheets and cash flow statements just as useful in the decision making process. The following will include the analysis of Home Depot’s annual report by examining the income statement, balance sheet, and cash flow statement and looking at how they can help with business decisions. The Consolidated Statements of Earnings, the income statement
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problem: During the years of 1988-1990, why has Butler Lumber increased sales volume but experienced a decrease in cash flow? This problem is historical, and I will base my analysis from information contained on the Butler Lumber income statement and balance sheet spanning the years of 1988-1990. II. Financial Analysis Framework To adequately assess the situation, the following ratios will need to be determined to create a framework for analysis: * Liquidity ratio – Will Butler be able to
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Current ratios are determined by dividing a company’s current assets by their current liabilities. As of December 31, 2013 Starbucks current ratio is 1.273 vs. 1.847 on December 31, 2012. Current ratio determines whether a company will be able to meet their short-term obligations like paying their creditors and purchasing raw materials for its production and indicating the company’s efficiency. When a company’s current ratio is higher than a 2.0 it indicates that their current assets are larger than
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Cost of Artwork Sold and Inventory. The ASC 330-10-30-10 said that “The cost to be matched against revenue from a sale may not be the identified cost of the specific item which is sold, especially in cases in which similar goods are purchased at different times and at different prices.” The ASC 330-10-30-9 said that “Cost for inventory purposes may be determined under any one of several assumptions as to the flow of cost factors, FIFO, average, and last-in first-out LIFO.” Under this code said
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Inventory turnover ratio gives us the measure of the number of times the company’s inventory is sold and replaced for a given a period. The higher the ratio, the better it is. A low ratio indicates that the sales are poor and there is excess inventory. Tylee’s ratio has decreased from 4.5 to 2.1 Accounts receivable turnover ratio measures the firm’s effectiveness in extending credit and collecting debt. A high ratio indicates that the firm is efficient in collecting its accounts receivables. A low
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Net Income v. Decreases from Withdrawals and Net Loss c. Balance Sheet vi. “Statement of financial position” vii. Lists all Assets, liabilities, and owns viii. As of a specific date + d. Statement of cash flows ix. Cash receipts and cash payments 2. Describe how changes to a company’s revenue and expenses affect their Income Statement and Balance Sheet. Revenues & Expenses on the income statement affect the Net Income, by
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Advanced Accounting Assessment 1 Spring 2014 On January 10, 2010, Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000. At that time, Salem Company had capital stock of $550,000 and retained earnings of $80,000. The noncontrolling interest in the acquisition was deemed to be worth $212,500. Differences between the fair value and the book value of the identifiable assets of Salem Company were as follows: | Fair Value in Excess of Book Value | Equipment
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Chapter 13 Question 1 | | Corporations invest in other companies for all of the following reasons except to | meet strategic goals. | | increase trading of the other companies' stock. | | generate earnings. | | house excess cash until needed. | A typical investment to house excess cash until needed is | stocks of companies in a related industry. | | low-risk, highly liquid securities. | | stock securities. | | debt securities. | Question 3 | |
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Financial Statements The four basic financial statements are balance sheet, income statement, earnings statement, and statement of cash flows. A balance sheet is used to show an illustration at a certain point in time of a business’s assets, what the business owns, and a business’s liabilities, what the business owes. To report your business’s revenues and expenses, an income statement is used to represent how profitably your business functioned during a certain period of time. A retained earnings
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JET2 Task 1 I. Evaluation of company’s strengths and weaknesses: a. Horizontal Analysis Results evaluation Net sales increased 33.3% from year 6 to 7 which signifies strength in the company. Increasing sales increases stockholder value and the overall value of the company. Net sales decreased 15% from year 7 to 8 which is a weakness for the company and affects the overall value. Advertising expenses decreased 16.3% from year 7 to 8 as well. This is a weakness for the company because
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