formula that represents the relationship between the assets‚ liabilities‚ and owner ’s equity of a small business. Businesses use this to basically show what it owns what it owes and what its investors are investing. In order to understand these concepts it is important to have some knowledge of what is meant by each of the three basic components mentioned. “Assets refer to the worth of goods or products in the possession of the owner. Liabilities represent the amount of cash or resources that were borrowed
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shown as a percentage of revenue. Similarly‚ balance sheet is common-sized as follows : • Total of assets side or total of liability side is taken as hundred. • Each item of asset is expressed as percentage of total asset total of capital and liabilities. • Each item of the liability side is also expressed as a percentage of total assets or total of capital and liabilities. USEFULNESS OF COMMON-SIZE FINANCIAL STATEMENT ANALYSIS • Inter-firm comparison becomes more meaningful when financial statement
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The impact of changing from Chinese GAAP to IFRS Name: Si Chen H00121138 Module: Coursework Assessment Abstract In the 21st century‚ economic globalization has become an investible trend. With the rapid growth of economic globalization and the growth of international capital markets‚ international accounting convergence has become an irreversibly realistic issue for countries
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are three ways to analyze financial statements there is the vertical analysis‚ which uses the base percentage to express the assets or liabilities and stockholders’ equity. Horizontal analysis or the trend analysis is how someone can evaluate the financial statement over a period. With this method‚ one can determine an increase or decrease in assets liabilities or stockholders equity. This can be done in percentage or totals Horizontal analysis is used primarily with an intercompany comparison
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Assets Liabilities Current Liabilities Accounts payable Unsecured loan payable Total Current Liabilities 2 400 4 800 12 000 24 000 7 200 6 000 18 000 30 000 36 000 600 3 600 6 000 54 000 61 200 21 600 31 200 10 200 46 200 4 800 7 200 52 800 12 000 ---- ---- Total Liabilities 52 800 12 000 Net Assets Owner’s Equity 8 400 34 200 Capital Total Owners’ Equity 8 400 8 400 34 200 34 200 Non-current Liabilities
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Review Questions 5.1 What is asset-liability management? Asset/liability management is the coordinated management of the entire portfolio of a financial institution. It considers both the acquisition of funds from various sources and the allocation of funds to profitable investments. The traditional focus of ALM has been on net interest income. However‚ it also considers market values‚ via duration. Finally‚ simulations allow other aspects of risk management to be brought into the ALM process
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The bodies that provide authoritative support for GAAP are the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB). 2. What elements comprise the FASB’s conceptual framework? Elements Assets‚ Liabilities‚ and Equity Investments by owners Distribution to owner’s Comprehensive income Revenues and Expenses Gains and Losses Chapter 8 Exercise E8-5 1. Mingenback Company has the following internal control procedures over cash disbursements
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Long-Term Financial Needs FIN/486 International Finance Paper Huffman Trucking has adjusted to the needed changes in our industry. They were able to double their fleet within the first 10 years of business and it proves their dedication and to the success of this business. The company has continued to advance in technology and is able to stay competitive and to move into different regions with ease. Huffman Trucking’s vision is to remain competitive with other trucking companies by offering
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Definition of Products Liability (PL) Any cause of action having to do w/a product; not a cause of action in and of itself; rather‚ it has to do with an injury or accident arising out of the use of a product (any product sold in the stream of commerce; must be sold by a merchant) Theories of Liabilities / Causes of Actions a. Negligence(§ B - pp. 2 - 3) i. Introduction
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CHAPTER 1: EXERCISE 1-5 Asset Cash Equipment Supplies Accounts receivable Liability Accounts payable Notes payable Salaries and wages payable Stockholders’ Equity Common stock EXERCISE 1-6 1. 2. 3. 4. 5. 6. 7. 8. 9. Increase in assets and increase in stockholders’ equity. Decrease in assets and decrease in stockholders’ equity. Increase in assets and increase in liabilities. Increase in assets and increase in stockholders’ equity. Decrease in assets and decrease in stockholders’
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