Summary report: Financial statements (Essay Sample)

Summary Report: Financial Statements [Your Name] Southern New Hampshire University Introduction Users or customers need to have a reliable source of information regarding the financial institution that they wish to invest in or become a partner. Therefore, they need to have a trustworthy platform to get the required facts. The financial statements present in the report have the actual amounts of the company’s financial health, hence enabling relevant investors and stakeholders to make competent and informed decisions. On this note, the purpose of this report is to present the financial statements of the organization to the consumer. The comprehensiveness of the reports shows that the company has a strong performance at an individual and professional level. The information provided helps the investors make the correct decision before investing. Process There are several processes used to generate the account balances, in addition to the financial statements from investors and stakeholders. There are several steps taken to achieve the above goal and include: * Posting of ledger accounts * Adjusting the entries * Adjusting the trial balance * The preparation of financial statements * The recording of all transactions In terms of business decision-making, the income statement generated communicates how the expense of the company affects the value of the assets. The statement of equity communicates the benefits of investing more capital in a business to increase the value of its assets. Financial Statement Analysis The comprehension of the financial capability of the company depends on the cash position, the net percentage of sales, and the type of liabilities affecting the growth of the organization. Key points observed from the cash position is that the company can liquidate its assets thus meeting both short-term and long-term goals. The net income aids in understanding the profitability of the organization. Finally, liabilities can be paid from the short-term assets hence important for an organization to know the types of liabilities present. The company is operating profitably since the debits are equal to the credits ($81,255). In terms of whether the company is poised to meet its liabilities, an observation of the profits of the first month is crucial. Assets in the month of June were $50,650 while the liabilities were $25,000 indicating that the organization can pay off its liabilities through its assets. Thus, the current liabilities are evaluated through the current ratio. Internal Controls One suggestion for internal controls is asset valuation through current and long-term resources on the balance sheet. Under the valuation, the current assets can be converted into cash at an annual rate. The long-term assets provide economic sustenance beyond one year. Another suggestion is depreciation which involves declining balance and straight-line methods. However, it is vital to note that the choice of method for internal controls depends on the nature of assets and the financial strategy of the organization. Looking to the Future The accounting considerations associated with long-term...