Identify the criteria of the following items (Assets, Liabilities or Owner Equity): Create Balance Sheet from Following items
Notes payable 22,400
Inventory 55,000
Account receivable 9,600
Capital 72,000
Account payable 43,200
Building, Land and Equipment 96,000
Short Term Loan or Short term debt 5,000
Office supplies 12,000
Retained earnings 34,800
Cash 4,800
Problem Two:
Indicate which of the following statements is True or False:
it is better for the company to own assets greater than the liabilities and owner-equity
the accounting is identical to the finance
The start of any company done by the Financing activity, then the investing then the operation.
If you decided to buy a car, this considers expenses.
It is better to have short and profitable operating cycle.
The ineffective collection function can affect the operating cycle
One of the function of the supply chain management may interfere to the financial management
The cash flow statement contain the finance and investing activities only
The liquidity ratio indicate the capacity of the company to pay long term obligation
If you have a profitable project and have shortage in the finance, it’s better to raise funds by invite new partners
` Problem Three:
According to the above income statement:
Comment on the following points according to you own opinion:
What is the main reason for increase Sales increase?
The reason behind increase the percentage of cost of goods sold from sales revenue from one year to another.
Do you think that the company should continuous with its market strategy?
Comment on the distribution cost and the reason for its decrease as a percentage.
What could be the reason for the fluctuation in the Administrative Expenses?
Interest expenses increase due to extend the credit facilities, what do you recommend?
Problem Four:
According to the above financial ratios:
Comment on the liquidity and the assets efficiency and the profitability
