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Summary report to help with Managerial accounting...

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Summary Report: Financial Statements

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Summary Report: Financial Statements Ndea Greene Southern New Hampshire University

Summary Report: Financial Statements

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Financial statements are designed to give information about an organization's results of operations, financial condition, and cash flow. The readers of financial statements use this information to make judgments about the distribution of financial resources. With more precision, each financial statement has a specific function to serve. According to the income statement, an enterprise's ability to produce a profit is revealed. If the cost information is pooled, it also exposes sales volume and expenses. The income statement may also be used to examine trends in the outcomes of business operation when looked across several time periods. In a balance sheet, the reader is informed of the present state of the business as of the date indicated on the balance sheet, which is the date listed on the balance sheet. A number of liquidity ratios are derived from this information in order to evaluate an entity's liquidity, financing, and debt situation. Its final aim is to demonstrate the nature of cash receives and disbursements, according to a range of different types of cash. Due to the fact that sales and costs on the income statement do not always line up with cash flows, this information is essential. As a whole, the financial statements can also be used for the following purposes: Credit decisions are made by the creditor. Businesses' financial statements are analyzed by lenders to evaluate if credit should be provided or restricted. Decisions on investment. They use it to decide whether to invest and at what price per share. To determine a price at which to buy a firm, an acquirer uses the information. Decisions about taxes. Finances are often used by government organizations to determine whether to tax a business based on its assets or profits. Determinations resulting from union negotiations Using financial records, a company can gauge a company's perceived capacity to pay for its products or services before negotiating.

Summary Report: Financial Statements

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Individual subsidiaries or company segments also have their own financial statements, which may be used to determine their performance in greater detail. In summary, financial statements serve a variety of functions, depending on who is reading them and whose financial statements are being seen at the time.

Financial Statement Analysis The company's cash position was $51,436.75. An important percentage of the company's assets are in cash. The company's total assets were $69,754.07, and 74 percent of its assets were in cash. 74 percent is $51,436.75 divided by $69,754.07 This is a pretty high proportion, and it would appear that the firm has a lot of cash hanging around. In order to maximize the value of this cash, the firm should spend it in new facilities and equipment, boost dividends, and repurchase its own shares. 332.47% of sales = 32124.07/60221*100 = 53.34 percent Net profit margin is therefore 53.34 percent, which is an excellent net profit margin for this firm. By striving to reduce expenses, the firm should be able to maintain this margin in the future. Total current assets are 64,962.40 and total current liabilities are 7,630. We know that the current ratio = current assets / current liabilities = 64,962.40/7,630 = 8.51. This indicates that the firm is in a position to satisfy its short-term commitments in a comfortable way. Due to its huge cash balance, the firm is very liquid.

Taking the previous calculation into account, we can observe that the firm is in good financial condition. It has a very high net profit margin and strong liquidity levels at the same time. In the future, the firm should find methods to make better use of its idle cash so that it can continue to create value to the business and to its shareholders....