FINANCIAL STATEMENT ANALYSIS ACC-504 Instructor: Dr. Kumail Rizvi 1 21/5/2013 Kumail Rizvi‚ PhD‚ CFA‚ FRM INCOME STATEMENT Grouping of the expenses 21/5/2013 Grouping by Nature Grouping by Function Kumail Rizvi‚ PhD‚ CFA‚ FRM Formatting Multi-step format (GP Subtotal) Single-Step format (No GP subtotal) 2 REVENUE 21/5/2013 Profit = Income – Expenses “Income is increases in economic benefits during the accounting period in the form of inflows
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1. A NSF check should appear in which section of the bank reconciliation? (Points : 2) Addition to the balance per books. Deduction from the balance per bank. Addition to the balance per bank. Deduction from the balance per books. | 2. A consequence of separation of duties is that (Points : 2) theft by employees becomes impossible. operations become extremely inefficient because of constant training of employees. more employees will need
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Key pointers to balance sheet and profit and loss statements: A balance sheet represents the financial affairs of the company and is also referred to as “Assets and Liabilities” statement and is always as on a particular date and not for a period. A profit and loss account represents the summary of financial transactions during a particular period and depicts the profit or loss for the period along with income tax paid on the profit and how the profit has been allocated (appropriated).
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1. Alleg‚ Inc. Balance Sheet December 31‚ 2012 Assets Current Assets Cash And Cash Equivalents 14‚000 Marketable securities 17‚000 Accounts Receivables‚ Net 26‚000 Inventory 33‚000 90‚000 Total Long Term Assets Land and Buildings 57‚000 Machinery and equipment 120‚000 Accumulated Depreciation 61‚000 Goodwill 13‚000 Intangible Assets 9‚000 Other Assets 45‚000 183‚000 Total Assets 273‚000
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A balance sheet is a statement businesses produce that outlines their assets and liabilities. It is a snapshot of their fixed assets‚ current assets‚ current liabilities and long term liabilities for a specific moment in time such as the end of a financial year. Using these figures‚ a business is able to calculate their net working capital; how much the business is worth‚ whether it can afford to expand and if it is a good venture for investors. There are different groups of people who are interested
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Business Balance Sheet completely outlines the company; it includes the breakdown of assets and liabilities. It then transfers that to the owner’s equity. It will show debts that need to be addressed‚ if sales or profits need to be increased and overall if the company is in good standing or not. I would use the return on owner’s equity financial ratio to interpret the data. Taking the income after taxes and dividing it by the owner’s equity. I would be aiming for a higher return. Business Income Statement
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prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a. As of December 31‚ 2011 (the end of the prior quarter)‚ the company’s general ledger showed the following account balances: DEBIT CREDIT $ $ Cash 48‚000 Accounts receivable 224‚000 Finished goods Inventory (1000 units) 60‚000 Raw Materials inventory (500 units) 10‚000 Buildings and equipment (net) 370‚000 Accounts payable 93‚000 Capital stock 510
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Income statement The income statement or the profit and loss account as it is also called measures reports how much profit (wealth) has the business generated over a period of time. To measure profit the total generated revenue over a period must be identified. Revenue is a measure of inflow of economic benefits arising from the operations of the business. These benefits will either result in an increase of assets such as cash or amounts owed to the business by the customers or a decrease
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CHAPTER 5 Balance Sheet and Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE | | |Brief Exercises | | | | |Topics |Questions | |Exercises |Problems |Cases | |1. |Disclosure principles‚ uses of the |1‚ 2‚ 3‚ 4‚ 5‚ 6‚ 7‚|1 |
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Issues—Intangibles) Presented below is a list of items that could be included in the intangible assets section of the balance sheet. Instructions (a) Indicate which items on the list would generally be reported as intangible assets in the balance sheet. (b) Indicate how‚ if at all‚ the items not reportable as intangible assets would be reported in the financial statements. 1. Investment in a subsidiary company. 2. Timberland. 3. Cost of engineering activity required to advance
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