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Balance Sheet and Income Sheet

Essay by   •  October 12, 2013  •  Essay  •  1,849 Words (8 Pages)  •  1,218 Views

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Balance Sheet

The balance sheet of Riordan Manufacturing shows the assets, liabilities, and stockholders' equity of the company. Each area provides information that is beneficial to the operation of the plant. Under assets it shows their current assets of cash, account receivable, current portion of notes receivable, inventories, prepaid expenses, and other items. It also shows notes receivable less current portion, investment in joint venture, property, plant, and equipment, intangible assets, and other assets. We will do an analysis of this balance sheet to show what is going on with each area for the fiscal year ending September 30, 2011. We will do an analysis of the balance sheet starting with the assets and then the liabilities and stockholders' equity.

Assets

The first area of the balance sheet describes the assets of Riordan Manufacturing which we will cover below next starting with the current assets and the sum of the total current assets. We will show how each area of the assets are calculated to show the sum of the total assets.

Current Assets

The current assets have a cash value of $3,725,406 which is an increase of $918,377 from the year prior. This is always a good sign when a company is in the black with their cash assets. It also shows an increase in the accounts receivable with a cash value of $3,192,094 that is an increase of $496,752, inventories with a cash value of $9,709,611 that is an increase of $1,192,408, and pre-paid expenses and other items with a cash value of $666,591, that is an increase of $264,351. The current portion of the notes receivable was the only area that is lower than last year and a lost. The balance sheet shows that the total current assets are $17,377,957 which is a total of $2,853,167 increase from last years. Other breakdown of the balance sheet is as follow:

Notes Receivable, less current portion (2011) $842,551 - (2010) $936,168

Investment in Joint Venture (2011) 1,734,004 - (2010) 1,609,004

Property, Plant and Equipment - net (2011) 26,366,949 - (2010) 16,658,218

Intangible Assets - net (2011) 904,473 - (2010) 904,473

Other Assets (2011) 183,203 - (2010) 192,845

Total Assets

The total assets for Riordan Manufacturing is (2011) $47,409,137 - (2010) $34,825,498 which is an increase over the year before. An increase in assets of over 36% in only one year indicates both strong and aggressive growth of the company. The biggest change in assets came in the Property, Plant and Equipment category. In 2011, the company had $26,366,949 worth of assets, compared to its 2010 assets, which only numbered $16,658,218 worth. That's a difference of nearly $10 million, and makes up over 77% of the total increase in assets.

Liabilities and Stockholders' Equity

Riordan Manufacturing is a rapidly growing entity. Its total current liabilities are $3,685,152 (2011), including its current portion of the long-term debt, accounts payable, accrued liabilities, and income taxes payable. In 2010, Riordan's liabilities were $2,750,057, meaning that Riordan's liabilities are increasing, likely due to company growth. The breakdown is as follows:

Current Liabilities 2011 2010

Current Portion of Long-Term Debt $1,560,959 $474,032

Accounts Payable 1,141,561 1,391,385

Accrued Liabilities 430,477 524,685

Income Taxes Payable 552,155 359,955

Total Current Liabilities $3,685,152 $2,750,057

The par value of Riordan's common stock is currently at $.01. With retained earnings being $4,392,494 (2011), compared to $891,504 (2010), one can see more evidence of continued company growth. Including the value of retained earnings and total stockholder's equity, Riordan's Total Liabilities and Stockholder's Equity have increased from $34,825,498 in 2010 to $47,409,137 in 2011. The breakdown is as follows:

Stated par value is $.01.

20,000,000 shares authorized.

Issued and Outstanding 15,801,332 net of treasury shares. $29,055,488 $29,055,488

Retained Earnings / (Accumulated Deficit) 4,392,494 891,504

Total Stockholders' Equity $33,447,982 $29,946,992

Total Liabilities and Stockholders' Equity $47,409,137 $34,825,498

Income Statement - Chaitali

Sales

On Riordan's income statement it will show the revenue that they earned by selling their products. The cost of goods sold is the cost of the merchandise that Riordan's sold. It also shows the cost of the raw materials. In Riordan's gross profit it is how much the company earned from selling their merchandise. In Riordan's revenues it is from what they earned by selling its products. Below is Riordan's sales, direct cost of goods over the last two years. To find Riordan's gross margin we need to subtract the sales from the direct cost of goods sold.

2011 2010

Sales $66,608,660 $56,534,254

Direct of Goods Sold 51,592,470 43,970,250

Gross Margin $15,016,190 $12,564,004

Operating Expenses

The total operating expenses of Riordan Manufacturing has ranged from $4,832,924(2002) to $11,189,262(2008) from 2002

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