Memo to Shareholders
Memo to Shareholders – Carpino Company
To: Shareholders, Carpino Company Inc.
From:
Subject: First Year Performance of Carpino Company
Introduction
Upon completion of Carpino Company’s first year of business, it is with great satisfaction that I present to you the year end Cash Flow Statement and analysis for the period ended January 31, 2007. You will notice the statement as presented shows in detail the various operating, investing, and financing activities of the organization.
Analysis of Cash Flow Statement
Most organization’s face challenges during their first year. However, we are pleased to report that the company showed a net increase in cash of $105,000. A larger portion of the cash generated during this period under review resulted from sale of merchandise and capital stock. You will also note a gain of $6,000 as interest on investment in its first year of operations. This gain could be interpreted in such a way that demonstrates Carpino Company’s ability to pay dividends and meet future obligations. It is hoped that once the company stabilizes with each successful business year, that future cash flow generation will not be an issue for the organization.
As with most new companies within their first year of business, you will see a substantial part of start-up funds was used to purchase fixtures and equipment, as well as merchandise which was sold at a profit. The added operating expense of hiring a strong team of employees and creating an efficient work environment incurred additional expenses. The majority of these expenses can be categorized as one-time expenses for start-up purposes. They are unlikely to affect future Cash Flow Statements moving forward.
Cash Flow Statements such as these will be used to calculate actual company cash flow and its liquidity. This is primarily due to this statement’s unclear reflection of the dividends paid out, and its inability to provide a true picture of the organization’s present
To: Shareholders, Carpino Company Inc.
From:
Subject: First Year Performance of Carpino Company
Introduction
Upon completion of Carpino Company’s first year of business, it is with great satisfaction that I present to you the year end Cash Flow Statement and analysis for the period ended January 31, 2007. You will notice the statement as presented shows in detail the various operating, investing, and financing activities of the organization.
Analysis of Cash Flow Statement
Most organization’s face challenges during their first year. However, we are pleased to report that the company showed a net increase in cash of $105,000. A larger portion of the cash generated during this period under review resulted from sale of merchandise and capital stock. You will also note a gain of $6,000 as interest on investment in its first year of operations. This gain could be interpreted in such a way that demonstrates Carpino Company’s ability to pay dividends and meet future obligations. It is hoped that once the company stabilizes with each successful business year, that future cash flow generation will not be an issue for the organization.
As with most new companies within their first year of business, you will see a substantial part of start-up funds was used to purchase fixtures and equipment, as well as merchandise which was sold at a profit. The added operating expense of hiring a strong team of employees and creating an efficient work environment incurred additional expenses. The majority of these expenses can be categorized as one-time expenses for start-up purposes. They are unlikely to affect future Cash Flow Statements moving forward.
Cash Flow Statements such as these will be used to calculate actual company cash flow and its liquidity. This is primarily due to this statement’s unclear reflection of the dividends paid out, and its inability to provide a true picture of the organization’s present