Summary Report: Financial Statements Southern New Hampshire University 02:22:24 GMT -05:00 Introduction The purpose of this report is bookkeeping for the first month of a new service business that just opened. I created a financial statement that included and income statement which calculates ...
The purpose of this report is bookkeeping for the first month of a new service business
that just opened. I created a financial statement that included and income statement which
calculates net income, stockholders’ equity statement which contains a summary and finally a
balance sheet to make sure assets and liabilities even out. Financial statements are imperative in
success for a company, showing line by line their strengths and weaknesses.
Financial Statement Analysis
This financial analysis has been calculated using the financial statements for the opening
month of this company. While looking at the income statement, we can see this company total
revenues were $6,225.00, the net income was $3224.17 which is 51.8% in sales and finally the
expenses finalizing at 3000.83 and 48.2% of sales. When calculating the current ratio of
liquidity, I removed the long-term loan liability to get a more accurate answer. With the 125,000
long term loan taken out of the equation and leaving only $410.00 for liability the calculated
current ratio came to 44.3. This companies’ liabilities show lesser than their assets which means
they are starting off in the right direction towards financial success. Though everything looks in
good standings now the next few months reports will be crucial in seeing true success.
Internal Controls
Since this is a new business there are a few simple internal controls, they can focus on
right off. Checking all financial reports monthly to start and then possibly going quarterly after
finding a good system will be imperative to make sure everything remains positive. Where a
paper trail is necessary for tax purposes as well as for documentation, I would highly suggest you
look into getting an electronic reporting system so you can input and save your income
statements, balance sheets and stockholders’ reports. This will ensure that all records are in safe
02:22:24 GMT -05:00
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