... Stockholders elect the board of directors • The board sets policy, appoints the officers, and elects a chairperson • The board also designates the president, who is the chief operating officer Authority ... on thebalancesheet lists preferred stock, common stock, and retained earnings – in that order Objective Prepare the Stockholders’ Equity Section of a Corporation BalanceSheet Review of Accounting ... represent the stockholders’ equity (ownership) in the assets ofthe corporation • Paid-in capital comes from the corporation’s stockholders who invested in the company • Retained earnings come from the...
... about the operating segment Segment profit or loss, segment assets, and the basis of measurement Reconciliations ofthe totals of segment revenues, reported profit or loss, assets, and other significant ... purpose of an audit and describe the content ofthe audit report 3-24 Auditors’ Report Expresses the auditors’ opinion as to the fairness of presentation ofthe financial statements in conformity ... any noncurrent assets not falling in one ofthe other classifications Property, Plant and Equipment Are tangible, long-lived, and used in the operations ofthe business Includes land, buildings,...
... some ofthe more common misconceptions we, the authors, encounter in our training sessions See if any of them seem familiar ◆ TheBalanceSheet tells me the value ofthe business’ ◆ ‘At the ... year-end the retained profit must be somewhere; in the bank, or the accountant’s drawer’ ◆ ‘If the company’s share price rises it has more money’ ◆ ‘If I compare the results of two businesses, the ... businesses, the one which has made more profit has done better’ ◆ The accountant balances theBalanceSheet by entering a balancing figure somewhere probably profit’ These misconceptions will be dealt...
... of paper a Share Certificate When the company prospers, Bill offers to buy the shares for £1,200 Alex hands over the piece of paper; Bill hands over the £1,200 Alex has made a gain of £200 The ... creating the opportunity to sell at a profit THE BUSINESS FINANCIAL MODEL SOURCE OF FUNDS IMPLICATIONS OF SHARE CAPITAL ● The shareholders own the business, not the Chief Executive and Board of Directors ... that the proposed venture is viable, the lender will require - interest on the loan - eventual repayment ofthe loan itself ● The terms ofthe loan will be defined by a contractual agreement 13 THE...
... Lead time through the manufacturing process Range of products/services offered Moving from cash to other parts ofthe cycle entails risk and must therefore offer the prospect of a sufficient return ... CASH) less CREDITORS 23 THE BUSINESS FINANCIAL MODEL USE OF FUNDS WORKING CAPITAL CYCLE Note The amount of working capital required is a function of: ● ● ● ● 24 The size ofthe business Credit given ... GOODS These ideas are developed in TheManaging Cashflow Pocketbook 25 THE BUSINESS FINANCIAL MODEL SUMMARY The model so far: SHARE CAPITAL LOAN CAPITAL RETAINED PROFITS SOURCE OF FUNDS USE OF FUNDS...
... profit and so the process continues THE BUSINESS FINANCIAL MODEL COMMON MISCONCEPTIONS ‘At the year-end the Retained Profit must be somewhere; in the bank, or the accountant’s drawer.’ Yes The ... re-cycling is, therefore, happening continuously, ie: there is no tank at the bottom ofthe model, simply a meter and a pump Every year the meter is set to zero and the profits are measured as they are ... Profit is somewhere - it has been re-invested back within the business If the company merely ‘collected’ Retained Profit and held it until the year-end before tipping it back into the top of the...
... where the money invested in the business came from SOURCE OF FUNDS - and how it is currently invested USE OF FUNDS THEBALANCESHEET FORMAT TheBalanceSheet format swops the two halves ofthe ... investment a BalanceSheet ii) a summary ofthe operating performance the Profit and Loss Account 43 FINANCIAL REPORTS INTRODUCTION TheBalanceSheet and Profit and Loss Account are reports ofthe Business ... model over: ● ● Use of Funds appears at the top ofthe statement Source of Funds appears at the bottom ofthe statement Hence Balance Sheet: ARC plc as at 31st December 200£ Use of Funds Fixed Assets...
... Remember: theBalanceSheet must balance because the two halves are explaining: Source of Funds where the money came from Use of Funds 58 - where it is now THEBALANCESHEET ARC plc THEBALANCESHEET ... disappear! ✗ ✗ THEBALANCESHEET COMMON MISCONCEPTIONS The accountant balances theBalanceSheet by entering a balancing figure somewhere probably profit.’ TheBalanceSheet balances automatically ... THEBALANCESHEET SOURCE OF FUNDS VALUATION We now reach the bottom half oftheBalance Sheet, which shows where the funds (used in the top half) came from ● SHARE CAPITAL the number of shares...
... respect of a defined trading period ● TheBalanceSheet provides a picture ofthe business investment at a specific point in time, eg: - ● at the start ofthe trading period and at the end ofthe ... return on the Net Capital Employed ● The Report provides essential management information 65 THEBALANCESHEET PUBLISHED FORMAT TheBalanceSheet published format A Report to the Owners ofthe Business ... feature the different needs ofthe Shareholders the owners ofthe business This change of end user requires a change of format only The accounting terms used to this point are retained with the same...
... Gross Profit Less: Expenses 600 Operating Profit 200 400 Note: Gross Profit is the difference between the selling price and the cost of manufacturing the goods sold in the period Operating Profit ... is the Dividend The rest will be re-invested back within the business enabling the business to grow This is the Retained Profit and will be included on theBalanceSheet as Reserves p54 83 PROFIT ... what is left after all the business costs have been met Earnings, therefore, belong to the shareholders Some ofthe Earnings will be paid out to the shareholder to give them income on their investment...
... use 29 Dividend: The part of Earnings paid out to the Shareholders in order to give them an income on their investment 30 Earnings: The profits left for the Shareholders once all the business costs ... profit but profitability, ie: how much profit has been made on every £1 invested in the business After all, if evaluating the opportunity to invest in a project offering a profit of £1,000 the first ... for use within the business rather than for purposes of re-sale Gross Profit: Sales less Cost of Goods Sold 80 Interest: Lenders will expect a return on their investment in the form of interest...
... DEPRECIATION OTHER METHODS NB There are other methods of calculating depreciation, eg: ● Reducing balance - where the depreciation charge is a fixed % per annum ofthe reduced balance (ie: cost ... by the business ie: Cost less residual/scrap value at the end ofthe asset’s useful life to the business 103 APPENDIX TWO NB CALCULATING DEPRECIATION ● What is the effective useful life? The ... where the depreciation charge depends on the number of units of output produced Companies must select the method which is most appropriate to the asset in question and its application within the...
... increase on theleft or debit side and decrease on the right or credit side 2-20 LIABILITIES + STOCKHOLDERS’ EQUITY Liability accounts increase on the right or credit side and decrease on theleft or ... than 12 months after thebalancesheet date 2-34 Learning Objective Interpret thebalancesheet using the current ratio and an understanding of related concepts 2-35 Assessing the Ability to Pay ... classified balancesheet 2-32 Preparing a BalanceSheet It’s a good idea to check that the accounting records are in balance by determining whether debits = credits We this by preparing a Trial Balance...
... Here too, the right hand, obsessed by the question of financial equilibrium, knows nothing ofthe problems oftheleft hand, confronted with the often very costly social consequences of ‘budgetary ... completed the demolition of belief in the state and the demolition ofthe welfare state that was started in the 1970s in the name of liberalism I am thinking in particular of housing policy.8 The declared ... advocate the ‘minimal state’ and who are rather too quick to bury the notion ofthe public and the public’s interest in the public interest We see there a typical example ofthe effect of shared...
... two, and then tell the entire story of that theme: the history of salt; the fragility of democracy; the use and misuse of punctuation This book has no such unifying theme We did consider, for ... Most of their theories sounded perfectly logical It was the roaring 1990s economy, they said, that helped turn back crime It was the proliferation of gun control laws, they said It was the sort of ... speeches about the wonderful opportunities ofthe global economy; they’ll be trying to keep body and soul together for people on the streets of these cities.” The smart money was plainly on the criminals...
... revenue Unlike the busy lifestyle of fulfilling orders taken through a Web site, the passive-revenue lifestyle lets the site the work, not you 19 20 Part I: Meeting the Other Sideof Google Google ... controlled their costs and tracked their returns) In time, the advantages of eBay’s system got the attention of midsize brick-and-mortar stores, which now operate eBay outlets as an essential part of their ... Part I: Meeting the Other Sideof Google In the next two years, online businesses might want to diversify their marketing efforts, reaching for recognition on other platforms besides Google’s...
... differences in the spectral maxima in the visible region ofthe Fe(III) species, spectra ofthe Asp40 mutants were essentially similar to that ofthe wild-type protein Additionally, spin states ofthe Fe(III), ... mM)1Æs)1) ofthe wild-type protein (Table 2) The data indicate that mutation of Asp40 at the haem proximal side alters the cyanide binding property only slightly, and may not significantly affect the ... significantly affect the binding of exogenous ligands, such as the cyanide anion, to the Fe(III) complex [17], and O2 and CO to the Fe(II) complex [18] However, the PDE activities of these mutants are...
... 2,100 At the start ofthe War of 1812, about 80,000 volunteers and militia augmented the regular Army of 6,744 At the start ofthe Mexican War, the regular Army was 8,349, and at the start ofthe ... not the end of a war but xiv America Goes to War the end of a battle The Cold War and draft continued The problem of equity was captured in the title of one of numerous government studies ofthe ... Defense, the service chiefs of staff, and the head ofthe Joint Chiefs all still favored the continuation of a mixed system of professionals and draftees It was reported that the head ofthe Navy...