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Analysis of Polly’s Pet Products’ Financial Statement

MBA

Writing Assignment Unit 1

BUS 5110-01: Accounting

University of the People

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Financial statement includes balance sheets, income statements, and cash flow. Balance

sheets show (Beginners' Guide to Financial Statement, 2007).

Balance Sheet

It displays the company’s assets, shareholders’ equity, and liabilities also known as assets

equal liabilities plus equity. (Three Financial Statements, n.d.).

The total current assets were calculated by sum of cash, accounts receivable, and other

assets. Total current assets were added to long term fixed assets. Accrued expenses is the

difference between the liabilities and sum of accounts payable, income tax, portion of notes

payable, and deferred income taxes.

Cash 200,000
Total current assets 275,000
TOTAL ASSETS 350,000
Accrued expenses 30,000
Notes payable (long term) 38,000
Retained Earnings 168,500
Total stockholders' equity 188,500
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 350,000

Income Statement

It is a financial statement that shows the company's income and expenditures. Using the

available financial information, we calculated the income statement.

Operating Costs 445,000

Operating Income 130,000
Income Before Provision for Income Taxes 70,000
Net Income 65,000
Net Income 65,000
Retained Earnings, Ending Balance 168,500

Cash Flow Statement

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Cash flow is the net amount of cash and equivalents that are being transferred in and out

of the company.

Cash paid out to suppliers and

employees 400,000
Net cash provided by
financing activities 10,000

Net change in Cash 170,000

Cash balance, end of year 200,000

Conclusion

Financial statement is all related. These three, balance sheets, income statements, and

cash flow are the core statements and are involvedly linked to each other. It also provides a clear

view of the company’s financial health, that gives us insight in performance and operations.

They are essential because they provide information about a company’s expenses, revenue, debt,

and profitability.