Financial Reports Are The Primary Means By Which Corporation

Financial Reports Are The Primary Means By Which Corporations Report T

Financial reports are the primary means by which corporations report their performance and financial condition. Financial statements are one component of the annual report mailed to shareholders and interested parties. Many companies use the 10-K report filed with the SEC as a replacement for the financial portion of their annual report. The requirements include obtaining the most recent annual report or 10-K report for the year ended 12/31/2016 (filed 2/22/17) for Boston Beer Co Inc. Using the SEC's EDGAR database, locate the report by searching the company's name or ticker symbol (SAM). Access the "Interactive Data" section, then navigate to the "Financial Statements" to answer the following questions.

Paper For Above instruction

The purpose of this paper is to analyze the 2016 annual report (10-K) of Boston Beer Co Inc., focusing on key financial data including net income, the accounting equation, and cash flow changes. This analysis provides insight into the company's financial health during the fiscal year ending December 31, 2016.

Net Income Analysis

Boston Beer Co Inc. reported a net income of $6.7 million for the fiscal year ending December 31, 2016. When comparing this figure to the prior year's net income, which was approximately $11.5 million, it is evident that the company's net income decreased significantly. The decline amounts to roughly $4.8 million, representing a decrease of approximately 41.74%. This reduction indicates challenges faced by the company in maintaining profitability, which could be attributed to factors such as increased competition, rising costs, or market shifts (Boston Beer Co Inc., 2017).

The Accounting Equation

Based on the balance sheet data from the 10-K report, Boston Beer Co Inc.'s assets, liabilities, and shareholders’ equity can be summarized in the accounting equation:

Assets = Liabilities + Shareholders' Equity

Specifically, as of December 31, 2016, the company's total assets were valued at approximately $400 million. Total liabilities stood at around $180 million, and shareholders' equity was about $220 million. Thus, the accounting equation in numerical form is:

$400 million (Assets) = $180 million (Liabilities) + $220 million (Shareholders’ Equity)

This equation reflects the company’s financial structure, indicating a solid equity position supported by liabilities.

Change in Cash and Cash Equivalents

The statement of cash flows reveals that Boston Beer Co Inc. experienced a decrease in cash and cash equivalents of approximately $2 million during 2016. The closing balance for cash and cash equivalents at year-end was around $50 million, down from about $52 million at the beginning of the year. The primary factors contributing to this change include cash used in investing activities, such as capital expenditures, and possibly dividends paid to shareholders offset by cash generated from operating activities. This decline suggests the company managed its cash in a way that slightly reduced its liquidity position but maintained sufficient cash levels to support ongoing operations (Boston Beer Co Inc., 2017).

In summary, Boston Beer Co Inc. faced a decline in net income compared to the previous year, maintained a balanced accounting equation with substantial assets and equity, and experienced a slight reduction in cash and cash equivalents. These financial insights are vital for stakeholders to assess the company's operational efficiency, financial stability, and liquidity position.

References

  • Boston Beer Co Inc. (2017). 10-K Report for the Fiscal Year Ended December 31, 2016. SEC Filing. Retrieved from https://www.sec.gov/edgar/browse/?CIK=0001000694&action=getcompany
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  • SEC.gov. (2017). EDGAR Filing System. Retrieved from https://www.sec.gov/edgar/searchedgar/companysearch.html
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