Analyzing Financial Statements Free Essays

HSM 260 Analyzing Financial Statements By Darrell L. Lee Axia College of University of Phoenix October 31, 2012 Instructor: Danette Brown Calculate the accompanying: Current ratiolt; Long-term dissolvability proportion, commitment proportion, programs/cost proportion, general and the executives/cost proportion, and income/cost proportion for the years 2003 and 2004. Current proportion = current Assets Current Liabilities 2003 Current Ratio = [pic] Current Ratio = 0. We will compose a custom exposition test on Examining Financial Statements or then again any comparable subject just for you Request Now 87 2004 Current Ratio = Current Assets Current liabilities Current Ratio = [pic] Current Ratio = 0. 90 (adjusted â€up) Long-Term Solvency Ratio Long-Term†¦ Solvency Ratio = Total Assets Total Liabilities Long-Term†¦ Solvency Ratio = [pic] Long-Term†¦ Solvency Ratio = 1. 38 2003 Contribution†¦ Ratio = Last income source Total Revenue Contribution†¦ Ratio = [pic] Contribution†¦ Ratio = 0. 51 (gathered together) 2004 Contribution†¦ Ratio = Last income source Total†¦ Revenue Contribution†¦ Ratio = [pic] Contribution†¦ Ratio =0. 49 Program Expense Ratio 2003 Program/Expense Ratio = Total Revenue Total Expense Program/Expense Ratio = [pic] Program/Expense Ratio = 1. 0 2004 Program/Expense Ratio = Total Revenue Total Expense Program/Expense Ratio = [pic] Program/Expense Ratio = 1. 11 2003 Management/Expense Ratio = Total General and Management Expense Total Expenses Management/Expense Ratio = [pic] Management/Expense Ratio = 0. 28 (adjusted â€Up) 2004 Management/Expense Ratio = Total General and Management Expense Total Expenses Management/Expense Ratio = [pic] Management/Expense Ratio = 0. 33 (Rounded â€up) Revenue/Expense Ratio 2003 Revenue/Expense Ratio = Total Revenue Total Expenses Revenue/Expense Ratio = [pic] Revenue/Expense Ratio = 0. 94 2004 Revenue/Expense Ratio = Total Revenue Total Expenses Revenue/Expense Ratio = [pic] Revenue/Expense Ratio = 1. 11 Incorporate the current proportion, long haul dissolvability proportion, commitment proportion, program/cost proportion, general and the board/cost proportion, and income/cost proportion determined in week four Assignment. 2002 Current Ratio = Current Assets Current Liabilities Current Ratio = [pic] Current Ratio = 0. 75 2002 Long-term Solvency Ratio = Total Assets Total Liabilities Long-term Solvency Ratio = [pic] Long-term Solvency Ratio = 1. 26 2002 Contribution Ratio = Last Revenue Source Total Revenue Contribution Ratio = [pic] Contribution Ratio = 0. 53 Program/Expense Ratio = Total Revenue Total Expense Program/Expense Ratio = [pic] Program/Expense Ratio = 1. (Adjusted â€up) 2002 Management/Expense Ratio = Total General and Management/Expense Total Expenses Management/Expense Ratio = [pic] Management/Expense Ratio = 0. 30 (Rounded â€Up) 2002 Revenue/Expense Ratio = Total Revenue Total Expense Revenue/Expense Ratio = [pic] Revenue/Expense Ratio = 0. 98 Provide a 200-to 30 0-word clarification of the significance of every proportion for each of the three years recorded in Appendix D. Incorporate an announcement of whether the organization’s money related picture has improved or not inside the three-year time frame indicated in Appendix D. Informative supplement D records 5 proportions that are each significant in various manners. A non-benefit association utilizes the current proportion to assess a portion of its advantages. These benefits are both money and different things that could be changed into money, and they may be utilized if important to pay their expenses of working. A non-benefit association utilizes the drawn out dissolvability proportion to see whether they are probably going to have the option to take care of their tabs. This proportion will tell the non-benefit precisely the amount they rely upon commitments from different sources outside of their association. The association utilizes the administration/cost proportion to disclose to them the amount they should save for managerial expenses, other than their program costs. In the event that they set aside an excessive amount of cash in this class, they can spend less cash on their projects. The income/cost proportion reveals to them how much subsidizing they have used to help their raising support. The income/cost proportion resembles the administration/cost proportion in such a case that an excess of cash goes into income/cost, insufficient will go to their projects. Figure the fixed cost, variable expense and equal the initial investment point for the XYZ Corporation for the years 2003 and 2004 recorded in Appendix D. Expenses20032004 Program Services Payroll/Benefits $520,069. 00 $915,787. 20 Supplies $171,622. 7 $ 320,525. 52 Rent/Utilities $150,000. 00 $150,000. 00 Phone $24,000. 00 $24,000. 00 Other $79,888. 00 $115,999. 00 Management/Other $371,101. 00 $ 445,819. 00 Total Expense $1,361,681. 00 $ 1,972,131. 00 Variable Cost:20032004 Supplies: $171,622. 77 $320,525. 52 $171,622. 77 + $320,525. 52 = $ [pic] = $264. 074 Fixed Cost20032004 Rent and Utilities $150,000. 00 $150,000. 00 Telephone $24,000. 00 $24,000. 00 $174,000*2 = $348,000. 00 = [pic] = $261,000. 00 Break-even Point Customers:20032004 ,821 11,822 6,821 + 11,822=18,643 [pic] = 9,322 PX = A + BX 9322 X = 174,000 + 246,074 X 9322 X = 174,000 + 22,939,018. 28 X = 22,940,758. 28 Include the fixed cost, variable expense, and make back the initial investment point for the XYZ Corporation for the year 2002 from the week Six Checkpoint Average Variable Cost per Unit: $1,011. 00 20028 **** $417,004 + $ 125,101. 20 +$117,903 + $ 351,000 1, 142, 683 20031 ****$520,069 + $ 171,622. 70 +$79,888 + $371. 101 1,798,113 20041 ****$915,789. 50 +$320,525. 52 +$115,999 +$445,819 $3, 951, 82 Total0 Number of years 3 1, 317, 27 Average VC3 Average Customers 8,202 Average VC per Unit$ 161 $174,000. 00 Fixed Cost:0 ****150,000 + 24,000 Breakeven = Fixed expense/(Average Revenue per unit-Average VC Per unit) Breakeven = $174,000/($187 †$ 161) Breakeven = $174,000/$26 Breakeven = 6, 682 Customers Discuss the reason, points of interest, disservices, and kind of criticism gave by a detail, execution, and program financial plan in a 350-to 700-word exposition. Utilizing execution, detail, and program spending frameworks has a couple of favorable circumstances. Every framework is best for a specific explanation. Every framework has both is aces and its cons. The organization will think about the necessities of its association, and in view of this pick which framework they should utilize. Martin (2009) clarifies, â€Å"The three significant planning frameworks (detail, execution, and program) give the budgetary exhibition input in a presentation estimation system† (p. 77). An exhibition planning system’s most significant bit of leeway is that it gives the organization data about the expense of the organization’s â€Å"outputs. †For model, this presentation planning framework ascertains the expense to the association of specific individual administrations. In the event that this financial plan is identified with a homecare program, it would consider even help that is remembered for or identified with the homecare service†for example, if there is a different charge for organization of drugs or for movement time. Just the program-level is the perfect spot for this sort of spending framework. This sort of financial plan likewise gives a lot of detail, which makes it regularly better than detail planning. One detriment to execution planning is that it is increasingly hard to compute. An umbrella is a valuable similitude for a program planning framework. It comes to over every one of the individual program costs. A cafeteria, for instance, has costs like supplies, utilities, compensations. A program spending plan doesn't list every individual cost; it rather gives the program an absolute figure of cost. Organization can utilize a program financial plan to take a gander at the littler pieces of the absolute spending plan. This system’s hindrance is that it just applies at the program level and doesn't give any insights regarding which costs originate from what. An easier sort of spending framework is the detail, which is anything but difficult to utilize. Organization can immediately peruse a detail spending plan and use it to anticipate the future costs of the association. In the event that there is any inquiry of check, the data can be gotten to whenever. A detail framework would consider specific things like pay rates, gifts, and the working costs of the organization†like utilities or the telephone. A detail planning framework, however, isn't reasonable for use by a huge association, which is a disservice. It doesn't plot what the association spends on the expenses of its projects. Both a presentation financial plan and a program spending plan are utilized at the program level, yet a program planning framework and an exhibition spending framework work in various manners. The greatest contrast is that a presentation spending plan computes how much each of the organization’s singular administrations costs them. For models, for the homecare program, this sort of spending plan would consider the entirety of the administrations offered with the homecare program in its financial plan for this program. These could be specific charges for medication organization or for time spent voyaging, for instance. An umbrella is a valuable similitude for a program planning framework. It comes to over every one of the individual program costs. A cafeteria, for instance, has costs like supplies, utilities, pay rates. A program spending plan doesn't list every individual cost; it rather gives the program a complete figure of cost. Organization can utilize a program financial plan to take a gander at the littler pieces of the all out spending plan. A human help organization should consistently remember its costs. They need the sort of point by point data that originates from a presentation planning framework so as to know precisely how much each help costs them. Keeping this sort of spending lets the organization think about how much things will cost later on, and change their expenses if the need to. A program spending tells the organization precisely how much their projects costs, so they can alter their expenses by taking a gander at the financial plan. The program spending tell