Reflection Week Essay

Apply ratio, erect, and horizontal analyses to financial statements Ratio analyses are apply by companies to gather information in a attach tos financial statement. Ratios and numbers from a companys current year are compared to previous years and sometimes even the economic system to judge the companys performance. There are several ratios such as profitability ratios, liquidness ratios, activity ratios, leverage ratios and market ratios that can be employ to calculate financial information.In vertical analyses, each entry of the assets, liabilities and equities in a balance sheet is represented as a property of the total account of the financial statement. In horizontal analysis a companys ratios are compared in the financial statements over a period of time. Horizontal analysis can be used from revenues to earnings per share. make up a statement of cash flows using both direct and indirect methods. When preparing a statement of cash flows, thither are two different metho ds that can be used there is the direct method, and there is also the indirect method.The direct method shows operating cash receipts and payments, devising it more consistent with the objective of a statement of cash flow, while the indirect method adjusts earn income for items that do not affect cash. The FASB allows both methods to be used because in the end the results of the total meat for net cash provided by operating activities arrive in the same way. Companies use numerous adjustments when preparing such statements so following a proper guide such as the direct method or indirect method will help to ensure that everything is properly in order the way it should be.Prepare journal entries associated with the issuance of preferred and common stocks and the declaration and payment of dividends The issuance of common stock affects scarcely paid-in-capital accounts. Always record common stock at its par or stated value. Debit funds and credit Common Stock. Preferred stock ha s preference over common stock. However, preferred stockholders do not have voting rights. The entry is debit to Cash and credit to Preferred Stock. For a corporation to introduce cash dividends there must be retained earnings, adequate cash, and a declaration of dividends.A company does not pay dividends unless its board of directors decides to do so, then it is deemed declared. When it is declared then it becomes a liability. Three crucial dates are observed with dividends declaration date, record date, and the payment date. Declaration commits a corporation to legal obligations.