Case Study Of Payton Approved Company

Operations is separate from the accounting department. The employees in operations handle promoting the products. Also, Operations is in charge of making the products. The company’s accounting system is handled in-house by the cashier and the bookkeeper and by the accounting firm hired to handle the businesses’ financial reporting. The cashier handles all sales through the register. The register is balanced against the drawer each night by the bookkeeper and a deposit made the same day. The bookkeeper gives the accountant the drawer receipts and bank receipts for journal entries and later reports. The accountant checks all cash received and payments made against bank statements and collected paperwork. There is not a single person assigned to do all duties.

The process requires Peyton Approved to discover how much inventory is sold and what the cost of goods will result in. The process requires the business to review three forms of merchandise inventory to determine which summary benefits the business’s operational behavior. One will discover when assuming that first inventory purchased by the store is the first to be sold, it is determined that the FIFO method displays the best financial outcome for the business. During the process of updating journal entries, one must enter the information proved appropriately into the T-accounts to add the balance under each record. Once the T-accounts for transactions and adjusted transactions are balanced, the next step is to enter the information provided on the balance sheet. The balance sheet will list Peyton Approved assets, liabilities and stockholders equity after added during the T-account process (Nobles, 2014). Once the balance sheet is completed the income statement, statement of retained earnings, and closing entries can be filled with the information proved. This will give the business a full review from journal entry to closing entries of the business for the six month accounting

In order to ensure responsible accounting practices Peyton Approved will be investing in QuickBooks Pro; this accounting software will allow us to make sure all the steps are being followed correctly. We have also hired Fusion Group; Fusion Group is an accounting firm that specializes in new business owners to help with the accounting process. As a company we are also taking classes to get a better understanding of accounting, getting an understanding of why the accounting cycle is important, what the numbers mean for the company, whether or not we are in debt, we owe money, but also being able to get a true sense of the monthly profit (Scheid, J., (2011).

The analysis of a company's financial statements helps in the determination of both the weaknesses and strengths of the concerned entity. Further, such an analysis helps in the determination of the future viability of firms. There are a wide range of techniques utilized in the analysis of financial statements. In that regard, it is important to note that the relevance of a horizontal, vertical as well as ratio analysis of a company's financial statements cannot be overstated. This is more so the case when it comes to the interpretation of the various dollar amounts presented in both the balance sheet and the income statement. In this text, I carry out a horizontal, vertical as well as ratio analysis of both The Coca-Cola Company and PepsiCo, Inc. The analysis' results will be critical in the evaluation of each company's performance. Findings will be used as a basis for recommendations on how each company can improve its financial status.

The liquidity, profitability, and solvency ratios reveal some interesting points about Kudler Fine Food’s financial position. The liquidity ratios revealed that during 2002 and 2003, Kudler was having no trouble paying short-term debt. However, the current and acid-test (quick) ratios showed that during 2003 Kudler had an excess amount of cash that they were not investing properly. These ratios also showed that Kudler was collecting receivables and selling average inventory very quickly. The profitability ratios revealed that during 2002 and 2003, Kudler was using assets efficiently and making a decent profit. The profit margin ratio showed that during 2002 Kudler made a profit of four cents per dollar, and during 2003 they made a profit of roughly six cents per dollar. In addition, the return on assets ratio (which is also a profitability ratio) showed that Kudler utilized their assets efficiently enough to turn a profit. The solvency ratio used, which was the debt to total assets ratio, showed that during 2002 and 2003 Kudler only had around a quarter of their assets financed in debt. All of these ratios show that Kudler was a fairly strong company financially during 2002 and 2003. When trying to figure out how successful Kudler Fine Foods is, it is critical to review all financial statements. By using the horizontal and vertical analysis and the determining ratio calculations the profitability, liquidity, and solvency are figured. A specific

Ratio analysis is a very useful tool when it comes to understanding the performance of the company. It highlights the strengths and the weaknesses of the company and pinpoints to the mangers and their subordinates as to which area of the company requires their attention be it prompt or gradual. The return on shareholder’s fund gives an estimate of the amount of profit available to be shared amongst the ordinary shareholders; where as the return on capital employed measures an organization 's profitability and the productivity with which its capital is utilized. Return on total assets is a profitability ratio that measures the net income created by total assets amid a period.

Founded in a kitchen at home, Peyton Approved comes from humble roots with only your pet’s needs in mind. Although an up-and-comer to the dog food industry, Peyton Approved has begun looking at ways to grow and diversify. The demand is increasing and in order to keep all markets satisfied, Peyton Approved wants to look a different variety of treats. The purpose of this memo is to request a loan so that the company can expand and continue growing. The accounting system used by Peyton Approved will be detailed in order to show the effectiveness when managing their finances. Furthermore, the memo will address any strengths and weaknesses and what opportunities may be available in order to continue growing.

1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms?

The last of the three analyses in the financial statement is the Ratio analysis. There are three different ratios with different calculations in each they are liquidity, Solvency, and profitability. In the text book it states that the “Ratio analysis expresses the relationship among selected items of financial statement data” (Weygandt and Kimmel 2008 p.699). The first ratio I am going to find is the current ratio for each company in 2004 and 2005 which is a liquidity. To do this ratio I will have to take the current assets and divide by the current liabilities. In 2004 the current ratio for Pepsi was 1.28:1 I found this by taking 8,639 ÷ 6,752 = 1.28:1. Using the exact same method I take the number for 2005 doing the same calculations and the current ratio turns out being1.11:1 by taking $10,454 ÷ $9,406 = 1.11:1. The same

5. A complete analysis of the company’s financial statements for a minimum of the most recent three years of available data including a comparison of the company's ratios to most recent year’s peer company average ratios. Complete the ratio calculations yourself. Do not copy them from another source.

Peyton Approved sells dog treats that are all natural and hypoallergenic for dogs that have severe allergies and cannot consume the usual store bought dog treats. This dog treat bakery has been quite successful within the first three months of business and looks promising to target an even larger market. Looking from July to September Peyton Approved has a service revenue of $60,221 and a net income of $32, 184.07. To continue to grow these numbers and provide more dog owners with reasonable all natural and hypoallergenic treats, Peyton Approved’s purpose of this memo is to request for funding from Bank of America to expand Peyton Approved. With the growth seen within those three months, this line of credit can help further expand this

In this report, the balance sheet shows the total assets and total liability of the company at end the financial year. The complete expenditure and the revenue is shown in the income sheet with net profit.This report will examine the financial statement by ration analysis method which includes liquidity ratios, solvency ratios and

Analyzing profitability is one of the most important measures of success for a business. It is critical for the company to increase profitability in order for it to succeed in its industry. For a company to tie ends on short and long-term liabilities, healthy profits are required. Conversely, minimal profits may have a direct correlation with operational inefficiency, leading to short-term debt and long-term insolvency. In reality, no business can endure their market for a significant amount of time without making a profit. Thus, the analysis of a company 's profitability, both current and future, is crucial in the assessment.

When we observe the financial statements comprising the balance sheet and profit and loss account is that they fail to reveal all the information related to financial operation of an organization. It will provide a summarized view of the organization. Therefore in order to critically examine profitability and constitution of the assets and liabilities it is necessary to carry out comparison of financial statements with the help of ratio analysis.

The present study of the research entitled “A STUDY ON FINANCIAL PERFORMANCE USING RATIO ANALYSIS OF HINDALCO ALUMINIUM COMPANY LTD”. The study was based on secondary data from records, reports and profile of the organization. The ratio analysis is the process of identifying the financial soundness and cost effectiveness of the firm establishing relationship between the items of balance sheet and profit and loss a/c. The present study has thrown major concentration in ratio analysis from the 5 years balance sheet and profit and loss a/c. An objective of the study includes the profitability, cost of goods sold and overall financial performance of the company. Based on the five years balance sheet and profit and loss a/c suitable suggestion were given by the researcher for a better soundness and cost effectiveness of company.