BUSINESS AND FINANCE ESSAY 3
Business and Finance Essay
Following the Guidelines of the American Psychological Association
Name
Professor
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Date
Introduction
This essay will look at the four basic financial statements in the most recent annual report (listed as "10K") for any publicly traded corporation. The corporation is Walmart. I can find the annual reports at the SEC website using the search tool. I found the annual report using the Internet. I will respond to the following questions: what basic information does each of these statements provide? I will find the total assets, liabilities, and shareholders' equity for the most recent year. I will make a list of 10 questions I have about the financial statements. I will save the list so I can check to see how many of the questions I am able to answer at the end of the course. Secondly, I am a consultant who advises potential new business owners. An acquaintance is planning to start a small business that he wants to run as a sole proprietor. But he explains that he does not understand other business forms that he may adopt, and two of his friends may want to join the business in management roles. The business will be a landscaping firm that is expected to grow rapidly and require large investments in equipment in two to three years. Create a PowerPoint presentation for the potential new business owner that compares and contrasts the three main business forms and addresses advantages and disadvantages of each form. Include examples of types of businesses that would best fit each form. I will present my recommendation for best business type for the new business owner. I have formed a new sole proprietorship and my primary business is buying and selling fine art. My business is not publicly traded so I can choose to use the cash basis method or the accrual method for my business. Which would I use and why? Since my business is not publicly traded, is it important for me to prepare journal entries and financial statements? Explain why or why not. Research computer systems methods I can use to record my transactions and create my financial statements. MSN Money offers information about companies, industries, and related news items. For researching a company, the website is a good place to start gathering basic information. Go to http://moneycentral.msn.com. I will pick a large company that does business in my community and view their financial results. For the most recent year list the amounts reported for sales, cost of goods sold, and total net income. Does the amount reported for revenue represent cash received from customers during the year? If not, what does it represent? What does the amount reported for cost of goods sold represent? Is your company a profitable company? How can I tell? Does my company use accrual-based or cash-based accounting? How can I tell?
Publicly Traded Corporation
What basic information does each of these statements provide? The basic information that the report provides is information on how many employees the company has, their annual revenue, their net revenue, their stakeholders and vision and goals for the future (Walmart Annual Report, 2016). I will find the total assets, liabilities, and shareholders' equity for the most recent year. The total assets are $199.581 billion. The total liabilities are $80.546 billion. Total shareholder’s equity is $80.546 billion. I will make a list of 10 questions I have about the financial statements. Ten questions that I have about the financial statements are:
1. Is this information accurate?
2. Why is not a run-down included of how much is paid out to employees, included in the financial statements?
3. When does the company start gathering their information for the annual report?
4. Who does the annual report?
5. Does the annual report need to be seen by the IRS?
6. Does each stakeholder receive a copy of the annual report automatically, or by request?
7. How long has this company been doing annual reports since it has been around since the 1950s?
8. When is the annual report released?
9. When will they be doing the annual report for the 2017 fiscal year?
10. Do they provide the annual report to in-store customers at Walmart?
I will save the list so I can check to see how many of the questions I am able to answer at the end of the course.
PowerPoint Presentation
Secondly, I am a consultant who advises potential new business owners. An acquaintance is planning to start a small business that he wants to run as a sole proprietor. But he explains that he does not understand other business forms that he may adopt, and two of his friends may want to join the business in management roles. The business will be a landscaping firm that is expected to grow rapidly and require large investments in equipment in two to three years. Create a PowerPoint presentation for the potential new business owner that compares and contrasts the three main business forms and addresses advantages and disadvantages of each form. Include examples of types of businesses that would best fit each form. I will present my recommendation for best business type for the new business owner. Note: Please see attached PowerPoint Presentation.
Selling Fine Art
I have formed a new sole proprietorship and my primary business is buying and selling fine art. My business is not publicly traded so I can choose to use the cash basis method or the accrual method for my business. Which would I use and why? Since my business is not publicly traded, is it important for me to prepare journal entries and financial statements? Explain why or why not. Research computer systems methods I can use to record my transactions and create my financial statements. MSN Money offers information about companies, industries, and related news items. For researching a company, the website is a good place to start gathering basic information. Go to http://moneycentral.msn.com. I will pick a large company that does business in my community and view their financial results. For the most recent year list the amounts reported for sales, cost of goods sold, and total net income. Does the amount reported for revenue represent cash received from customers during the year? If not, what does it represent? What does the amount reported for cost of goods sold represent? Is your company a profitable company? How can I tell? Does my company use accrual-based or cash-based accounting? How can I tell?
It is good for a company to ensure that they have proper bookkeeping for tax purposes. The amount reported for revenue represents the cash received from customers during the year. The amount reported for cost of goods sold represents the revenue or the unit price of the items for sale. My company is a profitable company. We earn more than $100,000 USD per year. I can tell because the company is not in any debt and earns a profit after expenses. My company uses a cash-based accounting. My company examines the actual income coming in.
Conclusion
This essay has been a constructive exercise in understanding business and finance.
References
Walmart Annual Report. (2016). Walmart Annual Report, Walmart. United States. Retrieved
from: http://s2.q4cdn.com/056532643/files/doc_financials/2016/annual/2016-Annual-Report-PDF.pdf