Financial Reporting Problem, Part 2: Nike
Financial Reporting Problem, Part 2: Nike
ACC/290
Financial Reporting Problem, Part 2: Nike
When determining the overall financial strength of a company, businesses rely on their current assets to show value. Current assets are defined as assets that can or will be converted into cash quickly. The value of the asset’s will vary and may be used at any time as collateral for loans or other investment business development plans. Current assets will include, of course, cash and cash equivalents, which is the amount of money the company has in its bank accounts including savings bonds, certificates of deposit, and money market funds. Assets must always be calculated as net assets, that is, less any debt owed by the organization. This calculation of current assets can be applied to personal assets as well.
Nike Inc. has listed there current assets in this order. Cash and equivalents; Short-term investments; Accounts receivable; Inventories; Property; plant and equipment; Less accumulated depreciation; Property; plant and equipment; Identifiable intangible assets; Goodwill Deferred income taxes and prepaid expenses and/or other current assets. [According to Bank of American http://ycharts.com/financials/BAC/balance_sheet/quarterly] The order is correct and tells investors just how much money is available to the business immediately along with how much should a company keep on the balance sheet.
The Balance Sheet is classified into several categories, current assets, fixed assets, non-current assets, current liabilities, non-current liabilities and equities. Current assets consist of cash and cash equivalents, receivables and inventory along with prepaid expenses. Current assets are assets the company expects to use within the current year or current accounting cycle. Fixed assets are assets such as, land and buildings used in the operations of the business. Fixed assets usually have a useful life greater than one year. Other non-current assets are assets
ACC/290
Financial Reporting Problem, Part 2: Nike
When determining the overall financial strength of a company, businesses rely on their current assets to show value. Current assets are defined as assets that can or will be converted into cash quickly. The value of the asset’s will vary and may be used at any time as collateral for loans or other investment business development plans. Current assets will include, of course, cash and cash equivalents, which is the amount of money the company has in its bank accounts including savings bonds, certificates of deposit, and money market funds. Assets must always be calculated as net assets, that is, less any debt owed by the organization. This calculation of current assets can be applied to personal assets as well.
Nike Inc. has listed there current assets in this order. Cash and equivalents; Short-term investments; Accounts receivable; Inventories; Property; plant and equipment; Less accumulated depreciation; Property; plant and equipment; Identifiable intangible assets; Goodwill Deferred income taxes and prepaid expenses and/or other current assets. [According to Bank of American http://ycharts.com/financials/BAC/balance_sheet/quarterly] The order is correct and tells investors just how much money is available to the business immediately along with how much should a company keep on the balance sheet.
The Balance Sheet is classified into several categories, current assets, fixed assets, non-current assets, current liabilities, non-current liabilities and equities. Current assets consist of cash and cash equivalents, receivables and inventory along with prepaid expenses. Current assets are assets the company expects to use within the current year or current accounting cycle. Fixed assets are assets such as, land and buildings used in the operations of the business. Fixed assets usually have a useful life greater than one year. Other non-current assets are assets
References: Nike. (2011) http://investors.nikeinc.com/Investors/News/News-Release-Details/2012/NIKE- Inc-Reports-Fiscal-2012-Third-Quarter-Results1128713/default.aspx Bofah ,K. (2011. February, 12). http://seekingalpha.com/article/629941-jeremy-lin-china-and- the-nike-stock Kimmel, P.D., Weygandt, J.J., & Kieso, D.E. (2010). Financial accounting: Tools for business decision making (5th ed) Miranda, K. (2012). http://www.ehow.com/how_6969812_do-calculate-total-current- assets_.html#ixzz1xb8tNZgn