Balance Sheet Case Studies Samples For Students

Part A: Classification of items as assets or liabilities

Under this section, we will classify each of the given accounting transactions under appropriate category. Below presented is the snapshot of the excel sheet indicating the correct answers followed by the reasons for their classification under the relevant category:

Reasons for classification of each item:

a) An amount of £40K owed in incorporation tax: Since the company owes an amount, it will be classified under the liabilities section.
b) Stock worth £15K in the stock room: Stock/ Inventories are the current assets of the company and hence will be classified under current assets only.
c) An amount of £20K paid to a supplier for a product yet ...

US GAAP permits LIFO in valuing inventory while IFRS does not permit LIFO in valuing inventory. Secondly, US GAAP recommends two-step impairment of assets while IFRS recommends one -step impairment of assets. Lastly, in US GAAP, assets are not allowed be revalued upwards whereas in IFRS upward revaluation is allowed.
An expense in financial accounting is a monetary equivalent of an asset or resource that has already been consumed in a given financial period for the purposes of generating revenues for that entity. Examples include; salaries, rent, financing costs, and repairing and maintenance costs. On the other hand, an asset ...

- The stockholders’ equity section of the balance sheet gives an analysis of the several classes of shares held by shareholders and the company as at the end of that financial period, December 31, 2007. It gives details of the number of the various types of stock that are held and further goes on to give an analysis of the shares that have been issued and those that are outstanding. The statement of stockholders’ equity (exhibit 4) is almost similar to the stockholders’ equity section of the balance sheet, the only difference being that it is more detailed. It ...

Executive summary

Special purpose financial statements that are conventionally provided by small businesses usually offer limited information in both quality and quantity. The main reason behind this is the freedom in reporting that small businesses have. Consequently, lenders have to be careful when using these statements in lending decisions. As a small business, Boat Builders Pty Ltd’s financial statements may not be in a good state as provided to be used in a lending decision. A critical evaluation of whether they represent the true status and performance of this business is necessary before a detailed financial analysis is done. A number of concerns arise ...

About the report

The objective of this report is to assist One-World Investment Consortium, who is planning to invest £150 million in Thomas Cook PLC, a British global travel company listed on the London Stock Exchange under the ticker sign of ‘TCG’. We duly understand the impact of our professional recommendation on Consortium’s final decision making related to investment, and therefore, we intend to be comprehensive in the approach our analysis.
As for the structure of this report, it will be a two-part report. In the first section of the report, we will evaluate the past 5 year(2007-2011) financial performance ...

GOODWILL CASE

Despite the fact that, a business venture may claim to own numerous intangible assets, not all of its intangible assets qualify to appear on the balance sheet. Intangible assets will only appear on the balance sheet based on the following criteria of restrictions; intangible assets will qualify to appear on the balance sheet only if; the business venture acquired the assets i.e. if the intangible assets are not developed within the business enterprise. Also intangible assets can only appear on the balance sheet if they can be identified in terms of value and have a useful timeline and therefore ...

Q1 (a) Cash Flow Statement for the period 1 Jan 2015 to 31 December 2015

The missing/modified figures (as shown in yellow in the cash flow statement) are calculated as follows:
Employment income,
Keaton,
Given,
Gross Salary and Bonus= $120,000.00

Alyssa,

Given total salary and bonus=$64,800

Half paid in Aus and half in Singapore,

Thus her Salary and bonus paid in Singapore=$32,400

Employer’s CPF contribution,

Keaton- 37 % of 120,000=$44400
Alyssa- 20% of $32,400=$6480

Dividend and rental income

Dividend – Keaton-No dividend in 2015
Alyssa, $689 in 2015
Rental income
Keaton and Alyssa combined rental income for property in Singapore registered under joint tenancy agreement is $3,050 per month or $36600 for the year.

The portion of CPF and cash used for the housing installment is as mentioned below.

Total housing installment =$4099

Keaton:

Total monthly income=$10, ...

1.0. Background of London woods Limited
This is a private limited liability company that specializes in the production of furniture for sale to wholesale, retail and private use. It has been in business for the past five years and currently it employs 50 personnel that work within the company. It operates in the domestic market. The company was founded by three young men that were carpenters, Billi Kid, Bengazy and Lee Jones. These young men were energetic and they had appointed Operations Director aged 25 years. The operation's director's name was Mathew Do It. He is an innovator who ...

Introduction

Amazon is an organization that started in 1994, as the earth’s biggest bookstore. The company in 1997, via IPO, raised $50 million. In 1999, the business explored new business models, marketplaces, and auctions. In 2000, after the fall in GP, the business shifted towards traditional retailers.
The objective of this paper is to analyze the case “Amazon.Com the Brink of Bankruptcy” presented by Lynda M. Applegate in 2013.
For the attainment of the purpose, the paper has been divided into seven segments. Each segment presents worthwhile information.

Financial statement analysis refers to the evaluation of the profitability, stability, ...

1. Introduction
The Enron collapse, occurred in October 2001, consequently caused the bankruptcy of the whole Enron Corporation, the world’s leading energy, commodities and services company, as well as the dissolution of Arthur Andersen, which was one of the top five largest audit and accountancy firms in the world. Noteworthy it was not only the largest bankruptcy proceeding in American history at that time, but also the most serious audit failure, so that one says, “Enron is fraud and fraud is Enron”. The rise of Enron was almost as fast as its failure. Actually, it was an ...

Question 1

The Purpose and Usefulness of the Income Statement in Assessing Business Performance
Income statement is a financial document that attempts to measure financial performance of an organization over a specified accounting period. The major purpose and usefulness of an income statement is to summarize the business revenue stream and expenses by categorizing activities into operating and non-operating accounts. Income statement is useful in business performance assessment by showing any net loss or profit earned over a specified accounting year or a quarter .
The operating section of income statement is important to assess business performance of Sportswear-Kit since it discloses information about ...

Ch. 13: Case 13-4 Application of SFAC No. 13
a. What is the theoretical basis for the accounting standard that requires certain long-term leases to be capitalized by the lessee? Do not discuss the specific criteria for classifying a specific lease as a capital lease.
The transfer of a lease from the lesser to the lessee automatically shifts all the benefits and risks into the ownership of the lessee, it therefore should be capitalized by the lessee, and the economic effect is like that of installment purchase in many aspects. In both cases the lessee or the buyer enjoys most ...

The Cooking Hut Company (CHC), a kiosk retailer, has never budgeted due to its nature as a start-up.  CHC is now reaching the point where operations are predictable enough that a budget would be helpful for planning purposes.    
Using spreadsheet software, prepare 2016 budget schedules & pro forma financials by quarter and in total, unless otherwise noted, based on the assumptions provided in this narrative.
You will submit one Excel workbook (or Google spreadsheet).  There should be only three worksheets in the workbook. Each worksheet is a stand-alone budget scenario: (#1) base case scenario, (#2) modify cash flow scenario, and ( ...

General accepted accounting standards (GAAP) are acceptable framework and guidelines in accounting practice, used by professional accountants to record financial statements and position of a company. Therefore, this comprises of accounting and reporting standards, meant for both profit oriented firms and non-profit-oriented firms. On the other hand, according to (ken,2013) International Financial Reporting Standard (IFRS) is a global business language used in company circles so that their accounting documents and reporting are standardized. This, therefore, means that they are somewhat comparable across the industry, hence shareholder and stakeholders can make educated investments decision. IFRS is commonly used for ...

Walt Disney is a company which has had the fortune to stay as amongst the most recognized brands throughout the world. Their business strategy has been simple -- focus on the making Disney a family brand, and grow exponentially in every aspect of the media and entertainment industry. Hence, the company began in the line of expanding their business vertically, thereby becoming a self sustained company and brand all over the world. To begin with, the company started with being an animation picture producing company. As its characters, Mickey Mouse and others grew famous and began to be recognized ...

Introduction

Financial performance analysis is crucial for various stakeholders given the varying needs for performance information on various business aspects. In that respect, effective analysis entails evaluating performance over a period or comparing a company’s performance with industry peers. It also entails evaluating various performance areas using varying tools including financial ratios. In that view, the following is a report on Wyndham Worldwide Co. financial performance identifying the performance trend for the period beginning 2012 to 2014 and comparing its 2014 performance with that of the industry peers.

Analysis

Company Overview
Organization and history
Wyndham Worldwide Co. is a brand offering hospitality ...

Management finance

Part A:

According to the case, Charles Ltd. Department, because of the implementation of the new budget system is faced with the increased workload. This is because the system is effective, the department's power to enact budget Charles Co. said their goal is to estimate and predict facts (Fabozzi and Peterson Drake, 2009, pp.15-25). These must be analyzed by the selected company's management to ensure that they can achieve a reasonable and reflect reliable data. This concept would increase work that was previously absent in the departments.
In many cases, this requires expert who is an estimate of the ...

Economic evaluation involves the business aspect monitoring and analysis in a company. This analysis is intended to carry out comprehensive auditing of the profit and/or loss making aspects of the company. The end result is expected to put the management of the company in the know that theirs is a profit or loss making venture. During such evaluation, several aspects are considered especially the financial aspects. The analysis is intended to identify the various needs of the company and try to propose practical solutions to the identified needs of the company. Such solutions may include a change in the structure of the ...

MEMORANDUM

Best Buy Co., Inc Analysis
Introduction
Best Buy is an accredited consumer electronics retailer. The company has a strong presence all over the world. That makes it a very interesting consideration for investment since the demand for consumer electronics will not slow down any time soon. Investors will always take a keen interest in a company’s nature of business, major costs, management style as well as financial performance before deciding on the company to invest in. This memo attempts a detailed analysis and description of the Best Buy’s activities, financial performance and future outlook, (Business, 4)

Revenue Generation

Best Buy Inc generates revenue ...

Introduction

The thing that categorize among a powerful and weak company is their strategies and complying behavior with the regulations and regulatory authorities. Apart from the general operations, organizations have to consider a strong behavior with their accounting department as well. Accounting department is known as an important department with its core adherence with the productivity of a corporation, and it is usually addresses the day to day transactions of a company (Leung, Coram & Cooper, 2007).
In the current economic scenarios, there are certain restrictions and suggestions that are essential for the accounting department of a company, but still there are bulk of examples can ...

Company’s financial statements provide crucial details on different aspects on its operations. That includes information about its performance in terms of profitability, assets utilization and management efficiency, business liquidity as well ability to provide a suitable return for its stockholders. Thus, understanding the statements is crucial in all planning including operations, financial and marketing. In that respect, this analysis seeks to demonstrate how the statements can be used as a guide on marketing planning and general business management. To achieve that objective, the analysis uses the case of Abercrombie & Fitch and analyzes its financial statements for the year 2012 and ...

Part I.

It goes without saying that reliable and objective financial reporting is vital for any business entity. Adequate financial reporting is important in order to be able to track, analyze and implement changes in business operations. In addition, financial reporting gives managers the opportunity to take appropriate measures if financial performance of a company does not meet the expectations. Most of the financial reporting in the world is conducted according to one of the two standards - United States Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS). Understanding both approaches is extremely important in international business and ...

What is Net Present Value (NPV)

NPV = Total PV of CF – Initial cash outflow

Where total PV of cash flow is defined by

PV of CF = CF1 / (1+r)^1 + CF2 / (1+r)^2 + CF3 / (1+r)^3 + CF4 / (1+r)^4 + CF5 / (1+r)^5. CFn/ (1+r)^n
Net present value helps in comparing a dollar today with a dollar in the future. It can do so by discounting the future dollar by adjusting for inflation (Rouse, 2011). Companies use this method to see the financial viability of a project against its financial target.

Google’s Project

In the problem, the cash flow is indicated in the first row of the table ...

Part IGenerally Accepted Accounting Principles (US GAAP) GAAP are accounting standards that are used for preparation, presentation and reporting financial statements for public, private, government and nonprofit making organizations. The purpose of these rules is to ensure that the reporting of financial statements is transparent and observes consistency. This is a measure to ensure that those relying on the reporting make prudent economic decisions. Financial statements covered by GAAP include the balance sheet, income statements and the cash flow statements.

International Accounting Standards (IFRS)

International financial reporting standards refer to a setoff accounting rules developed by international accounting standards board. The standards ensure that business ...

Question 1 - What is a sub-prime mortgage?

The consumer financial protection bureau defines sub prime mortgage as
“A subprime mortgage is generally a loan that is meant to be offered to prospective borrowers with impaired credit records.”
A subprime mortgage is a kind of mortgage granted to borrowers with impaired or zero credit history. A prime or conventional mortgage is not offered to such borrowers as they have greater risk of defaulting. These loans are also called interest only loans and do not require any principle payments for initial few years, number of which is settled among the borrower and lender The interest charged on such ...

Having been granted the opportunity to administer consultancy services to your bank specifically in regard to the new staff training and orientation towards their new roles at the Commercial Lending Department in respect of small businesses, I submit the following training manual for use. The manual explains the reasons and application of analysis and gives examples of statements to analyse. The staff is advised to incorporate other financial information and competencies relevant to the lending department.

Reasons for Bank Analysis of clients’ statements and Information

In any commercial transaction in banking, the overriding objective often is that the bank should be able to make profits. The concept of ...

Question 1: Why Cartwright Lumber Company needs cash

Despite the profitability of Cartwright Lumber Company, it still faces cash flow challenges. The financial statements indicate that the company has a low balance in its cash account. Profitability does not necessarily mean the firm has a stable cash flow. The income statements indicate that Cartwright Lumber has been profitable in each of the years from 2001. The net income has increased from $31,000 in 2001 to $44,000 in 2003. However, its cash balance has declined in each of the years. Large sales and profitability do not automatically translate into cash flows. The company has large balances ...

Five Below, Inc. is a retail chain belonging to the specialty retail industry which was incorporated in Pennsylvania, USA in 2002. It offers “dynamic, edited assortment of exciting products, all priced at $5 and below, including select brands and licensed merchandise” ("Overview | Fivebelow"). Five Below’s products range from sports equipments, styling merchandise, small décor items, craft works to candies and party items. It largely targets customers who are teenagers or pre-teens.
Since the company’s inception, it has expanded its business to almost all regions of the United States and has been successful in opening more than ...

Butler Lumber Co.

Reason for borrowing fund for the profitable business
Even though the company is profitable, Butler is looking for the funds from the market to meet the capital needs. The company operation is increasing and the company needs to support its operating activities. In addition to this, the company must hold sufficient cash to provide flexibility in the company as well as for the consolidation of the outstanding debt; Butler is seeking for the funds from the market. The careful evaluation of business shows that the company is expanding its business and there is the need of funds to meet ...

Introduction

In his case, Ferrell (2012) discusses Enron Corporation from when it was formed, when it collapsed and all that followed after its collapse. Enron Corporation is an American company headquartered in Houston, Texas. This company was formed in the year 1985 through the merging of two gas pipeline companies. Enron Corporation deals in products and services such as natural gas, and also electric power generation and distribution. However, in the year 2001 when Ken Lay was the Chief executive officer and at his time of his stepping down, Enron was faced with financial problems which eventually led to its ...

Key metrics focused on

The key metrics used by Jefferson include the quality of the company’s earnings, balance sheet, cash-flows and operating efficiency. With that, Jefferson uses the metrics to rate the company in view of its performance. On the other hand, GMI focuses on the related party transactions, over boarding of the audit committee members and the non-exec directors as well as severance vesting and the asset-liability valuation. In addition, the GMI considers restatements and internal controls as key metrics in their rating. With the metrics, GMI rates the company’s risk in view of the appropriateness of the noted issues.

Recommendation on buy/hold/sell

...

Linear technology

1. Linear Technologies Payout Policy
Linear Technologies is a technology company that designs and manufactures integrated circuits since 1981 to the computers market. The company took the approach of the Personal Computer development in the 1980's assuring a constant growth in all those years, having participation in computers, automotive and communications. The company starts listing on the NASDAQ stock exchange in 1986 when the company was available to the public investors to trade its common stocks. The company, thanks to the high availability of cash in its balance sheets, the company decided to start paying dividends to its shareholders, ...

Introduction

The paper is a case analysis of Frog’s Leap Winery. The company has gained unmatched reputation in the industry because of its organic farming and traditional ways of winemaking. The paper is divided into six sections. The first section analyses the business strategies of the company in each consumer segment. The second section discusses its sustainability strategy. The third section performs a five-force analysis to understand competition outlook in the industry. The fourth section highlights the key factors contributing to the firm’s success. The fifth section explains how well the strategy is working in terms of financial ...

Individual Case Complete: Bank of America

Executive summary
Mission and Vision Evaluation: The Company has maintained a plausible vision and mission statement that focuses on ensuring that it develops customer centric financial products and services that are innovatively based. Thus, through the company vision and mission statement, it has managed to ensure growth and market capture.
Milestones: Among the most fundamental milestones, the organization has sustained a top position in the banking industry despite the prospect of financial crisis across US. The plausible performance has been as a result of effective policy statement that is centered on operational Excellency. With millions of customers across US, the ...

The article evaluates the critical success factors that made Outback Steakhouse succeed in the competitive restaurant industry where the failure rate for startups is 75%. The success of the company can be attributed to a number of factors. The entrepreneurial acumen of the founders Chris, Bob and Tim, combined with their experience in the industry contributed to the setting of up of a unique venture with a sustainable business model. The three could identify a market opportunity. The country faced a decline in the demand for meat while the market experienced unprecedented popularity of the steakhouses. Ability to develop a business model that bridges the ...

Business

5 June 201

Question 1

i). Bank Loan

ii) Sell stock to equity investors
In the case of sale of stock to the equity investors, the sales will increase in the income statement, and in the balance sheet the stocks (assets) will decrease.
iii) Extended credit terms from vendors

In this case, the assets will increase, and the payables also will also increase in the balance sheet.

Furthermore, in the above-mentioned cases
- Liquidity Ratio
- Debt Ratio
- Payable turnover Ratio will be influenced.

Considering bank loan, when loan is taken the liquidity ratio will increase, and the debt ratio will also increase.

In the case of the sale of stock to the equity investors, liquidity position will be better so the liquidity ratio will increase, and the debt to equity ratio will ...

In the United States, Federation of Accounting Standard Bodies sets Generally Accepted Accounting Principles(GAAP) and outside United States,International Accounting Standards Board, sets the International Financial Reporting Standards(IFRS).
The approach carried out in IFRS and GAAP accounting standards is different. There are many accounting treatments for various transaction that differ under both of the accounting standards.

LIFO Inventory accounting is not allowed under IFRS. However, US Firms following GAAP accounting standards are required to dislcose LIFO reserve in the footnotes of financial statements.
LIFO Reserve = COGS LIFO - COGS FIFO

This adjustment enhances the comparability between US GAAP and IFRS firms.

Treatment of Interest and Dividends ...

Tesla Motors Incorporation is a company located in Silicon Valley. The company develops, produces, and sells electric vehicle powertrain elements and electric cars. In addition, the public company uses the symbol TSLA while trading on the NASDAQ stock exchange. Tesla Motors attained extensive attention by manufacturing the Tesla Roadster. This was the foremost complete electric sports car. The company has situated itself among the leading actors in America’s motor vehicle sector (Garcia-Valle and Lopes 33). This paper is a case study of Tesla Motors Incorporation and will look at the company’s objectives, customer scenario, Identifications of the nucleus of ...

According to the Ford Motors balance sheet, it may seem that it indeed does have too much cash reserves. However, in deciding whether or not the company has too much cash, several factors will have to be considered. Companies hold cash for various reasons, chief among them the financing of routine transactions of the company, meeting covenants with lending institutions and other debtors, for speculation purposes and as a source of flexibility in the operations of the company.
Cash reserves held by Ford are high for the reason that the company intends to conduct a value enhancement plan. Such a move ...

Apple Incorporation is a company that was established in California in 1977 and which consists of wholly owned subsidiaries that manufacture, design and market a number of products which include iPad, iPhone, Mac, iPod and various software applications for both consumers and professional applications (Annual Report, 2011). The company caters to a number of consumers which include small and mid-sized businesses, Government, education and enterprises. The fiscal year of Apple consists of either 52 or 53 week period and it ends on last Saturday of every September.
The business strategy that the company has chosen for itself is providing the best ...

Analysis of the negotiation

Following between the co – owners of the Hackerstar Company, I was appointed the chief attorney representing one of the owners by the name Alan Hacker. This negotiation is taking place so that the two can come to an agreement that will see Litigation ruled out, Hackerstar receive royalties that Star is claiming and Hacker gets to move on with his innovations with another group of investors.

The peripheral elements that may have an impact on the negotiation include sharing of HackerStar’s assets, possibility that Star may have a personal grudge with Hacker. Star may be out to sue Hacker ...

Competition Bikes Inc. Storyline

Horizontal Analysis
Horizontal analysis involves a comparison of companies’ performance over a specific duration. The intent of this paper is to analyze the performance of Competition Bikes Company using various methods. There is a commendable performance in Competition Bikes Inc as is shown by the analysis done on the income statement and the balance sheet. There is a decrease in sales in the year 7, as well as 8 by 15 percent, but an increase in net sales by 33 percent was achieved in year 6 and 7. The decrease in sales could have been attributed by a general increase in prices, recession ...

The x-ray machine has a useful life of eight years and will be used for five years. In addition to that, the machine does not have a bargain purchase offer. In addition, the title of the equipment does not pass automatically to the lessee at the end of the lease term. The term of the lease is 62.5% of its useful life. The present value of the lease payments is 1.4% of the fair market value of the machine. In that case, it is not capital lease equipment (Epstein et al, 2009).

The IT network has a useful life of seven years, ...

The major things that IT managers will have to do differently when Sarbanes-Oxley becomes fully implemented and effective

On 30th day of July 2002, The Sabarnes -Oxley Act of 2002 whose intention is to give protection to investors through enhancement of accuracy and dependability of company revelation made pursuant to the laws of security together with other related purposes was applied as a reaction to the scandal that occurred of Enron and Arthur Andersen. The corporation offered glaringly fiscal statements that didn’t demonstrate the right returns in its statement of income and balance sheets. Enron was not alone; there were many other corporations that had the same outcome. The minimum prerequisite of this act is that an ...

Andrew Fastow, Enron’s Chief Financial Officer (CFO), devised two limited partnerships in 1999 – the LJM Cayman, LP (LJM1) and LJM Co-Investment LP (LJM2). The underlying purpose for this scheme was to buy back the stocks and stakes of Enron that were performing badly and in this way improve the appearance of the company’s financial statements. These partnerships were formulated exclusively to operate as independent equity investors intended for the special purpose entities that were being exploited by Enron (Bratton 31). Special purpose entities (SPEs) were utilized by Enron to finance and deal with risks related with particular ...

1. Company Profile

Thomas Cook Group Plc operates within the tourism and travel industry. The Company owns, operates and manages travel agencies, tour operators and car hire agencies, as well as owning their own aircraft fleet, cruise ships and resort properties. Thomas Cook is known as one of the largest travel companies in Europe.

2. Financial Analysis

The Thomas Cook Group has reported a robust set of results for the 2009 and 2010 financial years despite the uncertain economic environment and the significant adverse impact of a weak sterling pound. Thomas Cook‘s revenue for the year decreased by4% to £8,890million (5% deduction at constant currency).

...

Description of Business

“Magical Healthy Goodies” is a home-based business, selling low-calorie healthy cookies, cakes, and pastries. Business objectives, which are specific clearly defined targets, are the following: starting from December 2010, to increase sales twice by the end of February 2011, and achieve sales of $15 000 in the following 6 months. In order to do this, sole proprietor of the business Ms. Fatmah Hemdan will hire one personal assistant Ms. Alyaa Mohamed, who will be helping with orders, deliveries, and overall management. The business will use social media marketing, namely Facebook group, to promote their products. Social media activities will include ...