Essays on Cash Basis

Abstract

Performing the analysis for this milestone within the purview of profitability and cash management efficiency using the traditional financial ratios and horizontal analysis, we have gathered a useful insight into the financial position of the company that confirms bullish run in the company. We initiated the analysis with the calculation of profitability ratios and found that owing to increased revenue figures and most importantly,controlled cost structure for cost of goods sold and operating expenses, the company was able to generate higher operating and net profitability compared to the previous year. Moreover, during 2015, the company was also able ...

Accrual and Cash Accounting Concepts in a Hospital

Difference between Accrual and Cash Accounting Methods Accrual and cash accounting methods are two approaches used to recognize revenues and expenses. Under the accrual basis, the revenues are recognized when it is earned and realized or realizable. Thus, an enterprise can claim to have earned revenue from a certain transaction if it has delivered the products or provided the services. The term “realized” means that cash is received, and “realizable” signifies that there is a reasonable basis to anticipate that cash will be received in the future. On the other hand, expenses are recognized in the same period that ...

In cash basis of accounting, revenues are stated on the income statement in the period that the cash was received from the clients. Similarly, the expenses are also recorded on the income statement at the time customers are making cash payment (Warren, Reeve & Fess, 2009). On the other hand, the accrual system report revenues only when they are earned on the income statement. Additionally, this always occurs before the reception of cash from the clients. Moreover, expenses are recorded during the periods of their occurrence or when they expire. That is the period from the date of payment. However, ...

INTRODUCTION

With the intent to evaluate the financial As an established manufacturer of a line of fully-integrated wireless communication products serving an international market, New Technology Incorporated (NTI) is looking to start a partnership with outside entities for a long-term software security venture. After a competitive technical product evaluation, it has been determined that MicroStrategy, Inc. (MicroStrategy), a Virginia based corporation, represents the best potential candidate for this venture. This analysis will review the income statement trends, balance sheet trends, cash flow trends, and three key financial ratio trends for the years of 2013 – 2015 to determine if this merger ...

Cash Flow Statement

Cash Flow Trends While the income statement and balance sheet of the entity provided useful insights into the financial position of the company, however, since these financial statements are prepared on the accrual basis, we also focused on unearthing the trends in the cash flow statement as the same is prepared on the cash basis and provides a true picture of the company’s financial position. Discussed below are the trends related to the three sections of the cash flow statement of the company: -Cash Flow from Operations(CFO) Analyzing the CFO amount over the past three years, we ...