Analyzing Pro forma Statements Essay Example for Free

Analyzing Pro forma Statements Essay This financial analysis will define an initiative of what to implement, that would increase sales over the next five years. It can either be, another market, product, or a corporate expansion. A pro forma will be created and used for the XYZ Manufacturing Company of a five year projections. Assumptions will be made to support each line item, to increase or decrease the forecasted statements. There will also be interpretation of the financials, in relation to the initiative. Recommendations are to made on the potential discretionary financing needs. This word analysis is the company’s short term and long term financing needs, and strategies to help the company manage their working capital (University of Phoenix, 2014). Pro forma statements are created by, forecasting and combining the income and balance into a financial statement format. This will determine how the account balances are forecasted by acquiring forces that will influence and project how the accounts will be influenced. These forces are recognizable as restrictive debt agreements, sales, and company policies The following illustrations below is the Pro forma’s process for a five-year projection. This information is based on historical data collected from the sample provide (UOPX, 2014)..There is acquired information of a increase in sales new product as the result of a new product introduction also an increase in the production capacity. The increase in sales will acquire fixed assets with the excess cash (Parrino, Kidwell, & Bates, 2012) Pro forma Balance Sheet for XYZ Company, INC. Total Liabilities and Stockholders’ Equity-$559,608 $649,251 $848,766 $1,,037,172 $1,183,541 In the above balance sheet the current assets and current liabilities has increased in the ratio of sales (Parrino,Kidwell, & Bates, 2012, p90,91. 92) There is also an additional increase in the fixed assets. The company to take out an additional loan to meet the capital expansion, and the working capital needs (Parrino, Kidwell, & Bates, 2012) I would recommend that the company The first step in this pro forma financial statements is the forecasting of sales. Sales always influence the current asset and current liability account balances. For example: the account receivable balances would need to become larger increased if the firm needs to carry more inventory. Through the profit margin, and the dividend payout ratio. There is much difficult in forecasting sales, but it is an essential, it only depend on the season of the year, economy and the industry There could also be many other factors as well. Reference Parrino, R., Kidwell, D. S., & Bates, T. W. (2012). Fundamentals of corporate finance (2nd ed.). Hoboken, N. J.: John Wiley & Sons. University of Phoenix material, (2013) â€Å"Analyzing Pro Forma Statements†

Comparative International Reporting (Accounting) Essay

Comparative International Reporting (Accounting) - Essay Example Financial reports should be understandable, relevant, comparable and reliable (New Zealand International Financial Reporting Standards.2008). Financial reporting as said earlier is mandatory in all countries irrespective of laws prevailing. Accounting reports are prepared according to laws or standards framed for this purpose. In New Zealand the Financial reporting standards board or the FRSB is responsible for developing, implementing and ensuring accounting standards in the country (New Zealand Equivalents to International Financial Reporting Standards. 2011). The FRSB forwards new accounting standards to the Accounting Standards Review board or the ASRB for approval. It also works along with the International accounting standards board. In New Zealand issuers of securities and large profit making reporting entities are required to fully comply with the international financial reporting standards. According to the financial reporting act of 1993, reporting entities includes busines s which issues securities under the securities act and companies and other entities whose legislation requires them to comply with the act of 1993. The financial reporting act of 1993, places obligations to all such organizations to prepare financial statements in compliance with the generally accepted accounting practice within five months of their financial year. Smaller companies except issuers of securities and overseas companies can comply with less stringent requirements up to the limit of justification on their costs. It is also mandatory for companies to audit their financial statements and to file them with the registrar of companies in the public register. Meanwhile small overseas companies are exempted from this condition. The 1993 act has established the ASRB with the prime purpose to approve financial reporting standards. The Institute of chartered accountants of New Zealand, a professional body is responsible for developing and submitting financial reporting standards to the board (Financial reporting law. 2010). Since the introduction of New Zealand eqvallent to the IFRS, all the entities have to work through ever changing and more complex requirements of reporting. These challenges have reached the point of height when the entities are required to prepare and submit their annual report to share holders and other stake holders. With regard to presentation of the income statement, the companies have two options. The financial statements are approved for the purpose of issue within a period for 65 days average for listed entities and 100 days for non listed entities. Financial statements make up nearly 60% of the annual report. According to NZ IAS 1 , a minimum and separate disclosure on the face of the income statement of revenue, finance costs, profit and loss share of associates and joint ventures accounted for using equity method, profit or loss and tax expenses. Even though there is no specific requirement to show operating expense on the sta tements, the NZ IAS1 gives a choice for companies to select presentation of services by function or by nature. The NZ IAS1 also requires inclusion of primary statements that show changes in equity. This can be due to changes arising other than from transactions with equity shareholders acting in their capacity and all changes in equity or SOCIE. With regard

Position Statement (outline) Essay Example | Topics and Well Written Essays - 500 words - 1

Position Statement (outline) - Essay Example II. Another reason for decriminalizing marijuana may be the benefits the government will receive. This is through the amount of capital they might save in terms of the war against drugs. Billions of dollars are used in this expensive battle to catch, prosecute and house those who purchase and sell drugs (Gerber 59). When dealing with marijuana, the costs are soaring high, and it is no more harmful than other regulated drugs. III. There is also the issue of the capital lost in terms of tax collection when it comes to drugs. Revenue lost because the government cannot tax illegal drugs is proving costly in modern day. By decriminalizing marijuana, the government may earn tax revenue from legalizing marijuana than fighting it off the market, losing revenue in the process (Gerber 64). I. The implications of legalizing/decriminalizing marijuana are tremendous. Like anything else legalized in the economy, the government is likely to get involved in the stakes of marijuana production, harvest, and sale. This means that; it would be just like any other drug in the economy at the moment; controlled to profit of a few corporations (Morgan 79). The economy should not be controlled by these few corporations, and neither should the production, harvest, and sale of this drug. II. Just like any other drug, legalizing marijuana may lead to the growth of other trades. Other drugs may make their way into the market, which leads to rise in illegal and illegitimate trade. This implies that, the government might use extra capital annually to fight and combat other drugs off the market (Morgan 98). A. Through decriminalizing marijuana, it is highly likely the revenue a state may receive annually will benefit it tremendously. This is through tax collection, and reduction in costs incurred trying to fight the drug (Gerber 64). B. Decriminalizing marijuana also means the growth of employment opportunities. Many people will get employment through the