ACC 201 Project Summary Report

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School

Southern New Hampshire University *

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Course

201

Subject

Accounting

Date

May 21, 2024

Type

docx

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Uploaded by CoachTank12556

Summary Report: Financial Statements 1 Summary Report: Financial Statements Reanna Diaz Southern New Hampshire University

Summary Report: Financial Statements 2 Introduction The purpose of this analysis of financial data is to provide a detailed report of accurate information for entities such as potential investors, business partners, banks, and creditors. The information in this report assesses your company’s gross profitability. Financial statements like these allow current and future business partners to determine your ability to maintain financial commitment. With this information, they have the ability to make an informed decision on their investment in doing business with your company. Process My financial analysis is to determine your company’s performance in your internal and external environment to assist potential business partners. An evaluation of all financial elements concerning your company’s overall financial health was conducted to obtain this information. The income statement provides a picture of your ability to produce income and maintain the cost of a functioning business. The balance sheet provides your current and future business partners a view of your assets and liabilities at the date requested, providing accurate and up-to-date information; giving them the ability to determine their investment or credit decision to assess their rate of return. Your statement of stockholder equity discloses your company’s total assets after deducting your total liabilities. At the end of each reporting cycle, your final closing entries are determined by zeroing out and closing interim accounts and transferring their open balance to permanent accounts. Each of these financial statements plays a role for different types of investors looking to do business with your company. Financial Statement Analysis

Summary Report: Financial Statements 3 In conducting my analysis of this data, it can be found that 46.6 % of your revenues result in positive income. This is determined by dividing your total revenue by your total net income. I then determined your company’s ability to address current liabilities. In order to obtain this information, I refer to your balance sheet, as we can see your total assets exceed your total liabilities, proving that as of 06/30/20XX, your company can return a profit. Internal Controls Five specific areas make up the internal control process: risk management, information & communication, control procedures, control environment, and monitoring. Each of these five processes ensures your company functions morally correctly and that your data and finances are secure. Think of these procedures as the safeguard to ensuring your company's stability, functionality, and integrity. As your company does not yet utilize a computerized financial system, I highly recommend investing in one. Doing so can save your company a lot of heartache and money should your books ever be compromised. I would also recommend an internal and external monitoring system. This can aid in monitoring areas that handle cash transactions and monitoring your employees' productivity to ensure that they are operating within your code of conduct. Putting systems like this into place will help prevent any loss of money and time. Looking to the Future Assets such as equipment and property are considered long-term assets. We can expect these to be replaced after 12 months or longer than a normal reporting cycle. These assets are known for depreciation, and they can be adjusted over time to determine if they still benefit the

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Summary Report: Financial Statements 4 company or need to be replaced as they may no longer benefit from its income. There are many methods of deprecation. These include declining balance and the sum of years balance, units of production, and straight-line deprecation. The easiest one to determine is the straight-line process of deprecation. We would deduct the end-of-life value from the purchase price and divide it by the asset's useful life to assess this depreciation. This provides us with the depreciation by year. In addition, we can also utilize the declining balance method. This system of deprecation is found by monitoring the value of the asset during its course of life. It is my professional recommendation that the straight-line method be utilized. When discussing inventory methods, there are three methods to consider. FIFO, LIFO, and WAC. Based on the movement of goods and deprecation of goods based on how long they retain shelf life, I would recommend utilizing the FIFO method as this method would allow the movement of older items to the front for sale and any new incoming inventory to the back of the line for sale at a later date.