Memo for ABC Complete Kitchens Inc Essay Example for Free

Memo for rudiment Complete Kitchens Inc Essay huge organizations demand a high level of commitment by the people involved- Bill Gates. ledger entryHaving the right man for the right job is imperative for corporate success. The person that inst in alls the cabi mesh topologyry for alphabet Inc. is belike not the same person you want managing the pecuniary responsibilities and obligations. Employees of ABC Complete Kitchens Inc. encompass a interchangeable work ethic, professionalism and accountability however their skills vary and need to be accommodated suitably in spite of appearance the society. Maintaining this level of medical prognosis is imperative to achieve organizational success. Maturity, health, financial stability and the ability to compensate accordingly to cur drive and bulky term fiscal challenges is the responsibility of the financial manager and within this organization or for ABC Inc. the chief(prenominal) Financial Officer (CFO).The CFO assesses, d irects, monitors, dominations, develops strategies, plans for on-line(prenominal) and recollective term financial goals and most importantly determines the organizations investment funds decisions. The CFO and/or financial manager must weigh the costs and benefits of all investments and fuddles and decide which of them throw away as good physical exertions of the money (Northcentral University, 2011. 7 709). This is money invested by others as wellhead as yourselves within this gild. There ar three main tasks financial managers argon responsible for beyond applying management brave outards to financial capital or income of this conglomerate. These consist of making (preferably good) investment decisions, financial decisions and managing the conjunctions cash in break away on a daylight to day and a long term basis. In order to stand behind these investment decisions, it is imperative to understand the terminology and processes within the financial systems development. A ssetsAssets be items of ownership that erect be converted into cash or drive an exchange apprize. They ar investments this follow has make. From an accounting read/write head of view, assets can be divided further into two categories, current and long-term assets. Current assets are cash or other liquid items that can be turned into cash within one year. vendable securities are short term, low risk investments such as, the current stock you hold and what it is worth or can be sold at. Accounts receivable are debts owed to this telephoner by consumers for products and services nominated already on credit. Inventories are assets comprised of raw materials such as cabinetry, sinks, and appliances including kitchens creation currently installed that ABC Inc. still owns.There are other current assets that we allow for view on our sleep sheet later on and they are mostly prepaid expenses and deferred assets as well as expenditures for future costs such as insurance, rent and interest. Intangible assets have no physical existence. These can include intellectual property or employees who reveal knowledge and skill (NCU, 2011. 713). If the employee leaves to go to another organization, this is considered an intangible asset. Perception of the troupe within the conjunction is important. Take for example the communities perception of the union. Wal-Mart and most recently Target with their credit card theft mercantile establishment experienced intangible assets. Copyrights, patents and goodwill are also intangible assets. Recently, I was asked if I was going to wake an employee who made a mistake that cost the company $600,000. No, I replied, I just spent $600,000 learn him. Why would I want somebody to hire his experience?-Thomas J. Watson (founder of IBM).LiabilitiesA liability is an obligation to creditors, an entity arising from early(prenominal) transactions, where the settlement can result in the transfer of assets,services or other yielding of b enefits in the future. They include any type of borrowing from persons or banks for improving 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, oer a short or long time block or possibly on demand. Liabilities are categorized as current and long-term classification. Classifying liabilities as either current or long term will assist ABC Incs CFO assess if the risk of these liabilities will involve disbursement of cash or further company assets in the near or distant future. A current liability will be convenient within one year. Diving deeper into the definition of current liabilities, a company also identifies them as debts that are expected to be taken care of with current assets or with the use of other current liabilities.Accounts collectable are considered the ingrained sum of monies or obligations owed to purveyors for goods and/or services purchas ed with credit. When 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 blow over 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 utilized in the assembly of t he kitchens. A capitol lease is a turn out that requires this organization to make scheduled payments in exchange for the use of a certain 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. needs 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 faithfulness or Shareholders EquityOwners or shareholders right is the ownerships interest in a corpo reliefn in the form of common or preferred stock. This amount is calculated and identified as shareholders equity, net 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 satisfactory to equity plus liabilities, thus indicating how overmuch of the companys assets belong to or are owned and by whom. The Balance SheetThe equilibrate or instruction of financial position lists the companys assets and liabilities, providing a model of the corporations financial position at any given time. The balance sheet summarizes the remainder of all the assets, liabilities and boilers suit worth of a companys accounts as of a specific date, usually the last day of the accounting period or the last day of the quarter or fiscal year (Thomsett, 2011). The primeval 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 analyzed as an estimate of the extinction 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 affairs as well as abiding by the provisions of GAAP 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 after fulfill 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 point in time, including but not limited to assets, liabilities and net worth. The first part of a balance sheet shows all the productive assets a company owns, and the second part shows all the financing procedures, the liabilities and the shareholders equity. This is better seen from the table demonstrate 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 explanation 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 thought of as a plus and a minus. At any time , the sum of all accounts in the corporate books will add up to zero, because debits and credits counterpoise one another (Thomsett, 2013). It is important to remember that creditors often compare a companys current assets and current liabilities to evaluate whether or not the company has adequate working capital to endure 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 suggestion 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 PL statement, and the net income is also referred to as the companys earnings (NCU, 2011). The income statement is based on the accounting equat ion 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 issue but also the international fiscal aspects of ABC Complete Kitchens Incorporated. Generating sales overseas is taking this company to new heights within the business world. The income statement or statement of financial performance catalogs the companys revenues and expenses. It is putting our name on the map while increasing profit, employment opportunities and as the get on 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 significant advancement within all of the departments. If everyone invo lved collaborates cohesively, communicates respectfully and complies with ABC Complete Kitchen Incorporateds mission and vision, the finality will be a company that last produces an exceptional product with complete customer and corporate satisfaction.ReferencesAverkamp, H. (2013). What is owners equity? Accounting Coach, LLC. Fort 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). List 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/