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Company Balance Sheet Analysis

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According to the Income Statements, Retained earnings statement, and the Balance Sheet, it illustrates that Elite Service was success in their first month of operation. Their liability did not out weight the income. Elite Service had initial 22,000 worth of investment into the company. The retained earning stated that it was enough working capital to pay dividend to their investors and still retain a profit. Some investors do not expect a return in their first month of investing. elite Services did better than expect, by paying dividend in the first month of operation, it is gaining the investors trust to invest more into the company. If the service revenue and salary, wages were increased to $900 and $1800 this would increase the net in the …show more content…

Income Statement covers four areas of the company income, Gross Profit, Operating Expense, Net Earning, and problem zones. The document listed all the income and expenses the company may occur. The document is normally prepared for a period of time. The Gross profit is the total sales or product of a company before the expense are subtracted. This is mandatory entry required. It is mandatory cause it is a baseline for the Income Statement, everything else is built off of it. In the statement shows investors what, how many levels of income is the company receiving and how much is the operating cost to keep the business operational. Investors want to know how much it cost to run the business and is it financially conducive to the company. Some failing businesses income fall drastically short of the operating cost. Making the company to have deceit. Net Earnings is the profit the company earning after the expense are paid …show more content…

The unclassified Balance Sheet have items on the sheet not group together. The classified Balance Sheet is categorizing into four subgroups Current Assets, Investment, Property, Plant, and equipment, and Intangible Assets. This type of Balance sheet provides organization to readers. The readers will have to scramble all over the sheet to find all the assets and liabilities. The entire premises of a Balance Sheets to show the financial position of the company, comprehending the value of each asset. Balance statements is show if the business has the finances to pay for their acquired debt. Long term and short term debt is discussed in classified sheet unlike the none classified sheet. Assembling all of the assets, cash, account receivable, notes receivable, investments, equipment inventory. Each subgroups of asset have a total amount which is calculated in total assets. Liabilities is organized that exact way. The depreciation of the equipment is also calculated as a liability. The long term and short term assets and liabilities is when the items take longer than 12 months to receive or pay out, this is called long term. The short term is when something takes less than a year to receive. Some categories need clarification on the value on the item. Sometimes different classification is does not hold monetarily value. In order for the Balance sheet to true and accurate, the total amount of

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