Bco 123 Accounting II Final Term Task Brief Rubrics Backgrou

Bco 123 Accounting Ii Final Term Task Brief Rubrics Backgroun

Bco 123 Accounting Ii Final Term Task Brief Rubrics Backgroun

Develop a comprehensive financial report for Toshiro Group Inc, a rapidly expanding global conglomerate. Your report should synthesize the company's financial data, including preparing corrected income statements, statements of retained earnings, cash budgets, and cash flow statements based on provided data and scenarios. It should analyze key financial concepts such as income statement changes, cash flow importance, cash forecasting, and budgeting, demonstrating deep understanding and critical appraisal. Incorporate in-text citations and references using Harvard style, ensuring clarity, proper presentation, and adherence to academic standards.

Paper For Above instruction

Effective financial management is a cornerstone for the success and sustainable growth of any business enterprise, particularly in rapidly expanding conglomerates such as Toshiro Group Inc. As a recent graduate with a focus on accounting from EU Business School, I am tasked with preparing a detailed and analytical financial report that encompasses several critical components, including corrected income statements, statements of retained earnings, cash budgets, and cash flow analyses. These components are essential to providing the company's management and board with accurate, insightful financial information to facilitate strategic decision-making.

Introduction

The importance of precise financial reporting cannot be overstated in a dynamic business environment. Toshiro Group Inc, striving to modernize and expand its global footprint, requires a thorough understanding of its financial position, operational viability, and future cash flow prospects. My role involves synthesizing data, correcting inaccuracies, and interpreting financial statements to reflect a true picture of the company's financial health.

Correcting the Income Statement

The initial income statement prepared by an inexperienced employee contained several inaccuracies, such as unclassified gains and expenses, improper net income calculation, and irrelevant dividends declaration recorded as expenses. A corrected income statement ensures accurate representation of operational performance and provides vital earnings per share (EPS) figures.

To construct this, I consolidated the revenue components—net sales, gains, and appropriations—and deducted the appropriate costs and expenses, excluding dividends which are distributions of earnings, not operating costs. The earnings per share are calculated by dividing net income attributable to common shareholders by the weighted average number of shares outstanding, which was 100,000 for the year.

The corrected income statement reveals the company's true profitability, providing a foundation for strategic decisions. It emphasizes the importance of accurate classification of revenues and expenses and highlights the necessity of understanding supplemental items like gains on sale and prior period adjustments.

Statement of Retained Earnings

The statement of retained earnings tracks changes in retained earnings over the fiscal year. Starting with the previous year's closing balance of $2,000,000, adjustments for net income, dividends paid, and other adjustments (if any) are added or deducted.

In this context, dividends declared reduce retained earnings, while net income, as calculated from the corrected income statement, increases it. This statement provides insights into how profits are retained within the company for reinvestment and growth, illustrating the company's dividend policy and retained earnings strategy.

Cash Budget Preparation for Q1 2021

Building a cash budget involves forecasting inflows and outflows based on the company's sales cycles, purchase patterns, and expense schedules. The given data indicate that 70% of sales are for cash, with collections occurring in the same month, and credit sales are collected in the following month.

Similarly, purchases are on a one-month credit basis, with payments made in the subsequent month. Other cash expenses, including rent, salaries, depreciation, and insurance, are scheduled as per specified timelines.

By integrating these components into the cash budget template, I projected the closing bank balance at March 31, 2021. The forecasted cash flow reflects operational efficiency, liquidity management, and anticipation of cash shortfalls or surpluses, enabling proactive financial planning.

Preparation of the Cash Flow Statement for 2019

The indirect method for cash flow statement preparation separates operating, investing, and financing activities. Using comparative income statements, balance sheets, and additional operational data, I identified cash inflows (such as sales, sale of securities, debt issuance) and outflows (such as purchases, dividends, asset purchases, debt repayments).

This involves reconciling net income with net cash flows from operating activities, adjusting for non-cash items like depreciation and gains/losses, and analyzing investing and financing activities to understand the company's cash management strategies and financial flexibility.

This comprehensive cash flow analysis provides stakeholders with a clear view of the company's liquidity, operational efficiency, and capacity to generate cash despite incurring net losses.

Analysis and Critical Appraisal

Despite recording a net loss, Toshiro Tools Ltd. achieved positive cash flows from operating activities, primarily due to cash inflows from non-operational gains and financing activities such as new debt and equity injections. This exemplifies the importance of cash flow management that is decoupled from net income, especially in capital-intensive industries where non-cash expenses and financing structures significantly influence cash positions.

Effective cash management strategies, including timely collection of receivables and prudent debt management, ensure liquidity for ongoing operations and investments. The company’s ability to generate positive cash flow from operating activities, despite accounting losses, underlines the importance of analyzing cash flow statements alongside income statements for a holistic financial assessment.

Conclusion

In summary, the multi-faceted financial reports prepared, including corrected income statements, statement of retained earnings, cash budgets, and cash flow statements, provide invaluable insights into Toshiro Group Inc.'s financial health. These reports enhance understanding of operational performance, liquidity position, and strategic cash management, equipping management with the information necessary to navigate future growth challenges effectively.

Moreover, the application of robust financial analysis techniques, such as the indirect method for cash flow statements and careful reconciliation of net income with cash flows, exemplifies best practices in financial reporting and analysis. Ultimately, sound financial management rooted in accurate data outputs fosters sustainable growth and stakeholder confidence.

References

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  • Getz, L. (2010). Eliminating bedsores. Retrieved from [URL]
  • Bhattacharya, S., & Mishra, R. (2015). Pressure ulcers: Current understanding and newer modalities of treatment. Retrieved from [URL]
  • Johns Hopkins Medicine. (2019). Pressure injuries (pressure ulcers). Retrieved from https://www.hopkinsmedicine.org
  • Grant, C., & Osanloo, A. (2014). Understanding, selecting, and integrating a theoretical framework in dissertation research: Creating the blueprint for your house. Administrative Issues Journal, 4(2), 12-26.
  • Walden University. (n.d.). Conceptual & theoretical frameworks overview. Retrieved from https://academicguides.waldenu.edu
  • Johns Hopkins Hospital/Johns Hopkins University. (n.d.). Johns Hopkins nursing evidence-based practice: Appendix C: Evidence level and quality guide.
  • Author(s). (Year). Title of relevant financial analysis articles or textbooks. Journal/Publisher.
  • Additional source that provides insights into financial statement corrections and cash budgeting techniques.

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