Business Balance Sheet
The 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 pits the revenue against the operating expenses. It spells out every single expense division or department, but groups the revenue in one main category. It basically summarizes the firm’s revenues and expenses for each accounting period. It will show if anything is leaning to far in one direction; if things aren’t balanced out well. I would use the working capital financial ratio to interpret the data. It would take the current assets and subtract the current liabilities to get the working capital. This would be to find out what the company is worth after all bills, debt, and expenses have been paid.
Statement of Cash Flows summarizes the company’s operating, investing, and financing compared to the profits the company made. It breaks this down usually every 6 months or annually. It will show if there is money being wasted on unneeded activities or expenses. It will also show where most expenses are occurring. I would use the inventory turnover financial ratio is interpret the data from the chart. The cost of goods divided by the average inventory would show how often the inventory is replaced. This information will be helpful in creating a realistic and reliable budget.
References
Pride, Hughes, Kapoor, Business 11th Edition, 2013
Business Income Statement pits the revenue against the operating expenses. It spells out every single expense division or department, but groups the revenue in one main category. It basically summarizes the firm’s revenues and expenses for each accounting period. It will show if anything is leaning to far in one direction; if things aren’t balanced out well. I would use the working capital financial ratio to interpret the data. It would take the current assets and subtract the current liabilities to get the working capital. This would be to find out what the company is worth after all bills, debt, and expenses have been paid.
Statement of Cash Flows summarizes the company’s operating, investing, and financing compared to the profits the company made. It breaks this down usually every 6 months or annually. It will show if there is money being wasted on unneeded activities or expenses. It will also show where most expenses are occurring. I would use the inventory turnover financial ratio is interpret the data from the chart. The cost of goods divided by the average inventory would show how often the inventory is replaced. This information will be helpful in creating a realistic and reliable budget.
References
Pride, Hughes, Kapoor, Business 11th Edition, 2013
References: Pride, Hughes, Kapoor, Business 11th Edition, 2013