Business Finance Research Paper Example | Topics and Well Written Essays - 1500 words

Business Finance - Research Paper Example The Financial Review is where business performance is quantified in dollars The Financial Review has two major parts: Discussion and Analysis, and Audited Financial Statements. A third part might include information supplemental to the Financial Statements. In the Discussion and Analysis, management explains changes in operating results from year to year. This explanation is presented mainly in a narrative format, with charts and graphs highlighting the comparisons. The Operating results are numerically captured and presented in the Financial Statements. (http://www.terry.uga.edu/akefalas/courses/mirrors.htm 2005) The balance sheet represents the financial picture as it stood on one particular day, December 31, 19X9, as though the wheels of the company were momentarily at a standstill. Typical Manufacturing's balance sheet not only includes the most recent year, but also the previous year. This lets you compare how the company fared in its most recent years. The balance sheet is divided into two sides: on the left are shown assets; on the right are shown liabilities and shareholders' equity. Both sides are always in balance. ... Current liabilities Accounts payable $60,000 $57,000 Notes payable 51,000 61,000 Accrued expenses 30,000 36,000 Income taxes payable 17,000 15,000 Other liabilities 12,000 12,000 Total current liabilities $170,000 $181,000 Long-term liabilities Deferred income taxes $16,000 $9,000 12.5% Debentures payable 2010 130,000 130,000 Other long-term debt 0 6,000 Total libilities $316,000 $326,000 Shareholders Equity Preferred staock $5.83 cumulative,$100 par value authorized, issued and outstanding60,000 shares $6,000 $6,000 Common stock $5.00 par value,authorized 20,000,000 shares,19x9 issued 15,000,000 shares,19x8 14,500,000 shares 75,000 72,500 Additional paid-in capital 20,000 13,500 Retained earnings 249,000 219,600 Foreign currency translation adjustments 1,000 (1,000) Less: Treasury stock at cost (19x9-1,000; 19x8-1,000 shares) 5,000 5,000 Total shareholders' equity $346,000 $305,600 Total liabilities and shareholders' equity $662,000 $631,600 Typical Manufacturing Company Inc. Consolidated Income Statement December 31,19X9 and 19X8 (dollars in thousands) 19X9 19X8 Net sales $765,000 $725,000 Cost of sales 535,000 517,000 Gross margin $230,000 $208,000 Operating expensesDepreciation and amortization 28,000 25,000 Selling, general and administrative expenses 96,804 109,500 Operating income $105,196 $73,500 Other income (expense) Dividends and interest income 5,250 9,500 Interest expense (16,250) (16,250) Income before income taxes and extraordinary loss $94,196 $66,750 Income taxes 41,446 26,250 Income before extraordinary loss $52,750 $40,500 Extraordinary item: Loss on early extinguishmentof debt (net of income tax benefit of $750)