FINANCIAL STATEMENTS

FINANCIAL STATEMENTS
INCOME STATEMENTS BALANCE SHEETS CASH FLOW

 A. Multiple Step I/S- determines the Net Income or Net Loss of the company. 1.Ex: Sales Revenue Sales of printed t-shirtsP650,000 Less:Sales returns &Allo.-P50,000 Sales discounts - 10,000 (P60,000) ________ NET SALES P590,000 ========

 2. Gross Profit Net Sales P590,000 Less:Cost of goods sold ( 150,000) _________ Gross Profit P 440,000 ========= In Percentage: Gross profit/Net sales= Gross Profit Rate (merchandising profit) P440,000/P590,000= 74.58%

 3.Operating Expenses and Net Income Gross profitP440,000 Less:Operating exp. ( 120,000) __________ Net P320,000 =========

 B.Single Step I/S- Revenue less Expense = Net Income Use: 1.Company does not realize profit until total revenue exceeds total expenses 2.Format is simplier and easy to calculate

 C.Departamental I/S- income derived from various departments of the hotel D.Consolidated I/S- over all I/S of the hotel(all inclusive)

 THE BALANCE SHEET -list up assets,liabilities,equity,shows the state of the business;composition of the business or the core of the business. THE STATEMENT OF CASH FLOW Provides the companys cash receipts ,and cash payments.Treasury bills, money market funds, investments with maturity less than five months.

 TYPES OF CASH FLOW 1.Operating activities- from sales of goods and services,returns on loans, dividends. 2. Investing activities- acquiring and disposing long term assets 3. Financing activities- obtaining cash to repay loans,and giving stockholders return on investments

SOURCES AND USES OF WORKING CAPITAL

WORKING CAPITAL- excess of current assets over current liabilities SOURCES: 1. Income from Operations- A/R and cash sales or sales revenue 2. Accrued Net Income- determined after deducting the non-cash expenses(intangible assets such as goodwill,amortization)

 3. Sale of long term or other non current assets-land,building,equipment sales. 4. Increase in a long term liability- borrowing additional loan term debt, or additional amount of debts. 5. The issuance of stocks- sale of equity or receipts of owners investments increases current assets.

USES OF WORKING CAPITAL

1. Loss from Operations- net loss maybe reduced by non cash expense 2. Purchase of long term or other non current assets-acquisition of additional land, buildings etc or opening of another branch. 3. Payment of long term liabilities 4.Redemption of stocks-unscheduled expenses

 5. Payment of cash dividends Reference: HOSPITALITY MANAGEMENT ACCOUNTING-Martin G.Jagels and Michael Coltman