Memo for ABC Complete Kitchens Inc Essay

Great institutions demand a high level of commitment by the people studyd- Bill Gates. IntroductionHaving the decline man for the right job is imperative for corporate success. The person that inst everys the cabi boodlery for alphabet Inc. is plausibly non the same person you want managing the financial responsibilities and obligations. Employees of first rudiment flesh out Kitchens Inc. encompass a similar work ethic, professionalism and accountability all the same their skills qualify and need to be accommodated suitably at bottom the fellowship. Maintaining this level of expectation is imperative to achieve organizational success. Maturity, health, financial stability and the ability to overlay consequently to electric current and long term fiscal challenges is the responsibility of the financial director and at heart this organization or for ABC Inc. the Chief Financial police officer (CFO).The CFO assesses, directs, monitors, controls, develops strategies, pl ans for current and long term financial goals and most signifi sewertly determines the organizations investment decisions. The CFO and/or financial manager must constrict the costs and benefits of all investments and acoustic projections and decide which of them qualify as good rehearses of the currency (Northcentral University, 2011. 7 709). This is money invested by others as well as yourselves within this family. There atomic number 18 three main tasks financial managers atomic number 18 trusty for beyond applying managementstandards to financial capital or income of this conglomerate. These consist of qualification (preferably good) investment decisions, financial decisions and managing the caller-ups capital flow on a day to day and a long term basis. In order to stand behind these investment decisions, it is imperative to understand the speech and processes within the financial systems development. AssetsAssets atomic number 18 items of ownership that can be conve rted into interchange or have an exchange jimmy. They are investments this association has make. From an be point of view, assets can be divided further into two categories, current and long-run assets. Current assets are cash or other crystalline items that can be turned into cash within one year. marketable securities are short term, low risk investments such as, the current crease you hold and what it is worth or can be sold at. Accounts receivable are debts owed to this keep partnership by con shopping centreers for products and services provided already on reference point. Inventories are assets comprised of raw materials such as cabi inter take inry, sinks, and appliances including kitchens being currently installed that ABC Inc. facilitate owns.There are other current assets that we will view on our dimension sheet later on and they are mostly post give expenses and deferred assets as well as expenditures for future costs such as insurance, rent and interest. In tangible assets have no physical existence. These can admit intellectual property or employees who attain knowledge and skill (NCU, 2011. 713). If the employee leaves to go to another organization, this is considered an intangible asset. Perception of the compevery within the federation is important. Take for example the communities perception of the guild. Wal-Mart and most recently Target with their credit card theft issue experienced intangible assets. Copyrights, patents and goodwill are also intangible assets. Recently, I was asked if I was going to fire an employee who made a mistake that cost the corporation $600,000. No, I replied, I except spent $600,000 training him. Why would I want somebody to wage his experience?-Thomas J. Watson (founder of IBM).LiabilitiesA liability is an obligation to creditors, an entity arising from past transactions, where the settlement can result in the transfer of assets,services or other fall of benefits in the future. They include any type of borrowing from persons or banks for improve on a business or increasing personal income. Liabilities of this company are duties or responsibilities that require settlement by future use of assets at or by a specific date, over a short or long age period or by chance on demand. Liabilities are categorized as current and long classification. Classifying liabilities as either current or long term will facilitate ABC Incs CFO assess if the risk of these liabilities will involve disbursement of cash or further company assets in the beneficial or distant future. A current liability will be satisfied within one year. Diving deeper into the definition of current liabilities, a company also identifies them as debts that are expected to be interpreted care of with current assets or with the use of other current liabilities.Accounts account account payable are considered the organic sum of monies or obligations owed to purveyors for goods and/or services purchased with credit. W hen accounts payable are paid off, it represents a negative cash flow for the company. short-term debt otherwise known as notes payable is the reimbursement that will occur within the next year to satisfy a debt. Items that are known monies of the company that have not been paid such as the salary for employees or taxes and deferred or unearned profit that has been received for products that have not been distributed are classified within the current liability category (NCU, 2011. 723-24). long-term liabilities are debts payable over a longer period of time and unlike current liabilities, extend beyond one year. Examples of these are long-term debts, a capitol lease and deferred taxes. Long-term debt involves the obligation of our company to compensate our providers for a period of time that extends beyond one year.Currently, ABC Incs long-term debt consists of the construction of buildings overseas as well as most of our products utilize in the assembly of the kitchens. A capitol lease is a contract that requires this organization to make scheduled payments in exchange for the use of a authorized asset. An agreement is made between ABC Inc. and another proprietor to compensate for use of things such as equipment, the plant or property. ABC Inc. take to bear this risk and act as if it is owned as a company asset. Deferred taxes are taxes this company owes but has yet to pay. They appear as a liability because eventually they will be paid for however currently the company has exceeded its financialincome. Owners justice or Shareholders EquityOwners or shareholders fair-mindedness is the ownerships interest in a corporation in the motley of common or preferred stock. This amount is calculated and identified as shareholders equity, unclutter worth or book value (Averkamp, 2013). The equity a company has is determined by taking the total assets and subtracting the total liabilities. Equity is the quantity of ABC Incs assets that you as shareholders own, as opposed to what the company borrowed. Owners equity is also classified as net worth or net assets its your interest as owners in this company. Equity can be considered as the calculation of a companys money that is left over if an asset were converted to cash and all of the current and long-term liabilities against it are paid. Equity is the stock this company and you as individuals possess, it is the value of the assets that you the proprietor actually own. Assets are equal to equity plus liabilities, thus indicating how much of the companys assets belong to or are owned and by whom. The Balance SheetThe rest or literary argument of financial sight lists the companys assets and liabilities, providing a homunculus of the corporations financial position at any stipulation time. The balance sheet summarizes the remainder of all the assets, liabilities and overall worth of a companys accounts as of a specific date, usually the extend day of the accounting period or the last day of the tail or fiscal year (Thomsett, 2011). The fundamental accounting equation is the sum of all asset account balances is equal to the sum of liabilities plus net worth accounts. It can at times be utilized and canvass as an estimate of the liquidation worth of the corporation, aiding in foreseeing the value that would be left if the assets were bought and liabilities remunerated. A balance sheet must provide a fair and valid view of an organizations state of personal matters as well as abiding by the provisions of generally accepted accounting principles in its preparation. A balance sheet statesWhat assets the company ownsHow assets are paid forWhat the company owes or what they are liable forAmount left afterwards satisfying their debtsBalance Sheet Analysis and Current RatioAnalyzing the balance sheet assesses the companys value, control and short term cash needs. The balance sheet is a quantitative summary of a companys financial situation or condition at a specific poin t in time, including but not limited to assets, liabilities and net worth. The first part of a balance sheet shows all the arable assets a company owns, and the second part shows all the financing procedures, the liabilities and the shareholders equity. This is go against seen from the table demonstrated on the next page. The asset accounts are added together, providing the total amount of the corporations properties prior to being decreased by debts and obligations. The balance sheet is comprised of assets and liabilities, each with similar sub-groups providing a final commentary of the balance sheet subsection for reference.The total of all liabilities plus net worth accounts is always equal to the total of all assets, WITHOUT EXCEPTION How is the balance accomplished? The sum of liabilities and net worth is always equal to the value of all asset accounts because of double-entry bookkeeping. Every entry has a debit and a credit and these are equal in value. They may also be tho ught of as a plus and a negative. At any time, the sum of all accounts in the corporate books will add up to zero, because debits and credits offset one another (Thomsett, 2013). It is important to remember that creditors oftentimes compare a companys current assets and current liabilities to evaluate whether or not the company has adequate working capital to stick up their short-term financial needs. This comparison can be summarized in the companys current ratio. The current ratio is the percentage of current assets in relation to their current liabilities. A higher current ratio gives the significance of the company experiencing less risk of a cash deficit in the near future (NCU, 2011. 7727).The Income StatementThe income statement shows the companys net income or profitability during a specific period of time. The income statement can also be referred to as the profit and loss, or P&L statement, and the net income is also referred to as the companys requital (NCU, 2011). The income statement is based on the accounting equation that income equals revenue minus expenses which in turn illustrates the value of the owners equity as increasing or decreasing. The income statement analysis explains how the profitability ofthe company relates to the companys shares. Different ratios are used providing information on ABC Incs operation and worth (NCU, 2011). ConclusionThis leaves us now analyzing not only the national but also the international fiscal aspects of ABC Complete Kitchens Incorporated. Generating sales overseas is taking this company to new senior high school within the business world. The income statement or statement of financial execution catalogs the companys revenues and expenses. It is putting our name on the map period increasing profit, employment opportunities and as the Board of Directors you are responsible for maintaining this stature. This position is not only exciting, it is manageable as well. As a project manager I foresee signif icant advancement within all of the departments. If everyone involved collaborates cohesively, communicates respectfully and complies with ABC Complete Kitchen Incorporateds deputation and vision, the finality will be a company that ultimately produces an particular(a) product with complete customer and corporate satisfaction.ReferencesAverkamp, H. (2013). What is owners equity? Accounting Coach, LLC. fortress Atkinson, WI Retrieved from http//www.accountingcoach.com/privacy-policy (2011). SKS 5000- Business strategies for organizational effectiveness within the global perspective. Pearson Learning Solutions ISBN 9780558870447 (2013). lean of key accounting terms and definitions. InvestorGuide Staff.Retrieved from http//www.investorguide.com/article/13789/list-of-key-accounting- terms-and-definitions/Thomsett, M., C. (2013). The balance sheet. Getting Started in Stock Investing and TradingRetrieved from http//www.investorguide.com/article/12689/the-balance-sheet-ws/