All your Writing needs covered

Kyle’s Lawns Inc.’s Income Statements Analysis

Calculate the price
of
your order:

275 words
+
Approximate price
$ 0.00

Kyle’s Lawns Inc.’s Income Statements Analysis
Table of Contents
  1. Statement of Retained Earnings
  2. Balance Sheet
  3. Ratios
  4. Depreciation

The financial accounts of Kyle’s Lawns Inc, using the multiple step formats appear as below.

On-Time Delivery!
Get your customized and 100% plagiarism-free paper done in as little as 3 hours
Let’s start
322 specialists online

For the Year ended November 30, 2005.

Kyle’s Lawns Inc.’s Income Statements Analysis

Calculations

The EPS of a company is calculated as below;

EPS = Retained Earnings

No. Of outstanding ordinary shares

Yes, we can!
Our experts can deliver a custom Kyle’s Lawns Inc.’s Income Statements Analysis paper for only $13.00 $11/page
Learn More
322 specialists online

= 378,000/150,000 = 2.47

The EPS of a company is a ratio that shows how much earnings an investor’s ownership has had. In the case of Kyle’s, there has been $2.47 for every share held.

Statement of Retained Earnings

Kyle’s Lawns Inc’s statement of retained earnings appears as follows;

Details Common stock Share Capital($) Retained Earnings
($)
Total Capital and reserves
($)
Balance brought down 95,000 122,000 217,000
Additional Capital 255,000 255,000
Retained Profit for the year 2005 378,000 378,000
Balance carried down 350,000 500,000 850,000

Balance Sheet

A Balance Sheet is prepared as at a particular date the company wishes to give the financial position. In the above case, Kyle Lawns balance sheet will be prepared as follows as at November 30, 2005.

Kyle’s Lawns Inc. Balance Sheet As at November 30, 2005

Balance Sheet

Ratios

Assets Turnover ratio is calculated as follows;

Cut 15% OFF your first order
We’ll deliver a custom Accounting paper tailored to your requirements with a good discount
Use discount
322 specialists online

Asset Turnover ratio = Total Revenue/Total Assets

3,000,000/1,200,000= 2.5

The higher the ratio, the more efficient a company is utilizing its assets to generate sales. Kyle’s Lawns Inc has utilized its assets optimally. This is a ratio of the total credit sales over the average accounts receivable of a company. Assuming that Kyle’s Lawns Inc makes all sales on credit then the debtors’ turnover per year is very good at 16.39 for this company.

Accounts receivable ratio = Total Credit Sales Average Debtors

= 3,000,000/(191,000+175,000)/2

= 3,000,000/183,000= 16.39

The average accounts receivable collection period is the number of times in year a company collects its accounts receivables. Debtors collection period = 360

Get a custom-written paper
For only $13.00 $11/page you can get a custom-written academic paper according to your instructions
Let us help you
322 specialists online

Debtors’ turnover= 360/16.39= 21.96

The debtors of Kyle’s Lawns Inc take on average 22 days to pay up it accounts. Anything below 30day is highly recommended for most companies. This company is therefore doing very well. The current ratio is the ratio of a company’s current assets over its current liabilities it is calculated as below;

Current Ratio = Current Assets/Current Liabilities

= 570,000/300,000= 1.9

This means that for every $1 owned by the company $1.9 is recovered. In its computation, it normally leaves the value of inventory out as sometimes inventory may be difficult to turn into cash. This is calculated by leaving the stock value out in the computation of the current ratio as follows. Quick ratio = Current assets – Stock

Current Liabilities

= 570,000 – 245,000/300,000= 1.08

This means that for every $1 owned by the company there is $1.08 to pay it up when it falls due. The interest earned ratio shows how well the company is able to pay interest expense using the profits generated as a result of using other people’s money and is calculated as follows.

Times interest Earned ration = Earnings before interest and tax

Interest Expense

= 600,000/22,000= 27.27

The higher the ratio the better is the company since this shows that the company has the ability to pay it interest expense by that number of times that is, 27 times. In general, Kyle’s Lawns Inc is financially sound and it is able it meet its obligations when they fall due. This is an indicator of a company that is financially sound and runs its affairs efficiently.

Depreciation

J.T Company’s depreciation the stamping machine is calculated as below;

Depreciation = Cost of asset – Residual Value/Useful economic life

= 480,000 – 40,000/5yrs

= $88,000

This depreciation is recorded as follows. With this value, we debit the depreciation expense account and credit the provision for depreciation account.

Selling this asset at the end of the second year means that the asset has an accumulated depreciation of $176,000 that is, (88,000*2yrs). This means that its book value is (480,000 – 176,000 = 304,000) selling it at $350,000 gives a gain on disposal of $46,000. This is recorded as follows, with the accumulated depreciation of $176,000 we debit the provision for depreciation account and credit the disposal account. With the gain on disposal of $46,000 we debit the disposal account and credit the profit and loss account. The proceeds from disposal of $350,000 we debit the bank account and credit the disposal account.

Basic features

  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support

On-demand options

  • Writer's samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading

Paper format

  • 275 words per page
  • 12pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, CHicago/Turabian, Havard)

Guaranteed originality

We guarantee 0% plagiarism! Our orders are custom made from scratch. Our team is dedicated to providing you academic papers with zero traces of plagiarism.

Affordable prices

We know how hard it is to pay the bills while being in college, which is why our rates are extremely affordable and within your budget. You will not find any other company that provides the same quality of work for such affordable prices.

Best experts

Our writer are the crème de la crème of the essay writing industry. They are highly qualified in their field of expertise and have extensive experience when it comes to research papers, term essays or any other academic assignment that you may be given!

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Open chat
1
Reliance Papers Inc.
Get Help With All Your Homework Questions. Any Deadline, Affordable, Quality Work Guaranteed!!