financilale reporting problem 2
Financial Reporting (Problem Part 2)
Mark R. Mitchell
XACC/290
August 31, 2014
Jeanette Butler
Financial Reporting (Problem Part 2) While doing my analysis of the financial statement for the company Veritiv, I find that the company assets are listed in the proper order; that being the most readily converted to cash first. The order for Veritiv balance sheet is cash and equivalents, followed by receivables, then inventories, and other current assets. The next item listed is other current assets, followed by property, plant and equipment, gross accumulated depreciation and depletion, then property, plant and equipment net, intangibles, and other non-current assets are listed. Thereby, the proper order of assets is established as the most liquid of assets are first followed by those that will take longer to turn in the cash. As I was not fully sure as to the proper order, I did some extra research on the subject confirmed my beliefs. According to Kennon (2014), on investing for beginner that the first entry itemized in the asset column on the balance sheet is termed "current assets." Companies list all of the assets that are able to be exchanged into currency in a brief period of time; customarily, no more than a year. Veritiv’s assets are classified as current assets, fixed assets, deferred cost, intangible assets, and other non-current assets. The reason that companies use classification of assets is to calculate the financial shape of the company by weighing just how sturdy the company 's individual assets are doing (WebFinance, 2014). To further explain, cash equivalents are one of the three principal asset categories, besides bonds and stocks. Moreover, these securities have a low- gamble, low- yield profile. Additionally, cash equivalents consist of bank certificates of deposit, U.S. government Treasury bills, corporate, commercial paper, bankers ' acceptances, and other money market utilizations (Investopedia, 2014).
Mark R. Mitchell
XACC/290
August 31, 2014
Jeanette Butler
Financial Reporting (Problem Part 2) While doing my analysis of the financial statement for the company Veritiv, I find that the company assets are listed in the proper order; that being the most readily converted to cash first. The order for Veritiv balance sheet is cash and equivalents, followed by receivables, then inventories, and other current assets. The next item listed is other current assets, followed by property, plant and equipment, gross accumulated depreciation and depletion, then property, plant and equipment net, intangibles, and other non-current assets are listed. Thereby, the proper order of assets is established as the most liquid of assets are first followed by those that will take longer to turn in the cash. As I was not fully sure as to the proper order, I did some extra research on the subject confirmed my beliefs. According to Kennon (2014), on investing for beginner that the first entry itemized in the asset column on the balance sheet is termed "current assets." Companies list all of the assets that are able to be exchanged into currency in a brief period of time; customarily, no more than a year. Veritiv’s assets are classified as current assets, fixed assets, deferred cost, intangible assets, and other non-current assets. The reason that companies use classification of assets is to calculate the financial shape of the company by weighing just how sturdy the company 's individual assets are doing (WebFinance, 2014). To further explain, cash equivalents are one of the three principal asset categories, besides bonds and stocks. Moreover, these securities have a low- gamble, low- yield profile. Additionally, cash equivalents consist of bank certificates of deposit, U.S. government Treasury bills, corporate, commercial paper, bankers ' acceptances, and other money market utilizations (Investopedia, 2014).
References: Investopedia. (2014). Cash Equivalents. Retrieved from http://www.investopedia.com/terms/c/cashequivalents.asp Kennon, J. (2014). Current Assets on the Balance Sheet. Retrieved from http://beginnersinvest.about.com/od/analyzingabalancesheet/a/current-assets-on-the-balance-sheet.htm WebFinance. (2014). Classification of assets. Retrieved from http://www.investorwords.com/7053/classification_of_assets.html