Balance sheet ($ in millions) ASSETS Cash & Marketable Securities 449.90 Accounts Receivable 954.80 Inventories 3,645.20 Other Current Assets 116.60 Total Current Assets 5,166.50 Machinery & Equipment 1,688.90 Land 1,129.70 Buildings 2,348.40 Depreciation (575.60) Property, Plant & Equip. - Net 4,591.40 Other Long Term Assets 120.90 Total Long-Term Assets 4,712.30 Total Assets 9,878.80 part of Balance Sheet LIABILITIES Accounts Payable 1,611.20 Salaries Payable 225.20 Other Current Liabilities 1,118.80 Total Current Liabilities 2,955.20 Other Liabilities 693.40 Total Liabilities 3,648.60 SHAREHOLDER'S EQUITY Common Stock 828.50 Retained Earnings 5,401.70 Total Shareholder's Equity 6,230.20 Total Liabilities & Equity 9,878.80 Income Statement ($ in millions) Revenue 28,681.10 Cost Of Goods Sold 20,768.80 Gross Profit 7,912.30 Operating Expenses: Selling, General & Admin. 5,980.80 Depreciation 307.30 Operating income 1,624.20 Interest - Other Expense (Income) (13.10) Income Before Taxes 1,637.30 Income Taxes 618.10 Net Income 1,019.20 Number of Common Stock Shares Outstanding 1,032,271 Problem FINANCIAL LEVERAGE RATIOS Total Debt to Total Assets Equity Multiplier (times) PROFITABILITY RATIOS Operating Profit Margin Net Profit Margin Return on Total Assets Return on Equity Earnings per Share Financial Performance Summary
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Balance sheet ($ in millions)
| ASSETS | |
| Cash & Marketable Securities | 449.90 |
| Accounts Receivable | 954.80 |
| Inventories | 3,645.20 |
| Other Current Assets | 116.60 |
| Total Current Assets | 5,166.50 |
| Machinery & Equipment | 1,688.90 |
| Land | 1,129.70 |
| Buildings | 2,348.40 |
| Depreciation | (575.60) |
| Property, Plant & Equip. - Net | 4,591.40 |
| Other Long Term Assets | 120.90 |
| Total Long-Term Assets | 4,712.30 |
| Total Assets | 9,878.80 |
| part of Balance Sheet | |
| LIABILITIES | |
| Accounts Payable | 1,611.20 |
| Salaries Payable | 225.20 |
| Other Current Liabilities | 1,118.80 |
| Total Current Liabilities | 2,955.20 |
| Other Liabilities | 693.40 |
| Total Liabilities | 3,648.60 |
| SHAREHOLDER'S EQUITY | |
| Common Stock | 828.50 |
| Retained Earnings | 5,401.70 |
| Total Shareholder's Equity | 6,230.20 |
| Total Liabilities & Equity | 9,878.80 |
| Income Statement ($ in millions) | |
| Revenue | 28,681.10 |
| Cost Of Goods Sold | 20,768.80 |
| Gross Profit | 7,912.30 |
| Operating Expenses: | |
| Selling, General & Admin. | 5,980.80 |
| Depreciation | 307.30 |
| Operating income | 1,624.20 |
| Interest | - |
| Other Expense (Income) | (13.10) |
| Income Before Taxes | 1,637.30 |
| Income Taxes | 618.10 |
| Net Income | 1,019.20 |
| Number of Common Stock | |
| Shares Outstanding | 1,032,271 |
Problem
| FINANCIAL LEVERAGE RATIOS | |
| Total Debt to Total Assets | |
| Equity Multiplier (times) | |
| PROFITABILITY RATIOS | |
| Operating Profit Margin | |
| Net Profit Margin | |
| Return on Total Assets | |
| Return on Equity | |
| Earnings per Share |
Financial Performance Summary
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