Guidelines for Spreading Financial Statements
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Rent Expense Analysis for Companies in the S&P
Rent Expense Analysis for Companies in the S&P 500 Executive Summary In this paper, Savills Studley analyzes rent expense for companies in the S&P 500. We explore trends by industry on both an individual company and aggregate basis. We find that while companies are largely spending more on rent in absolute dollar terms, rent expense as a percentage of total operating expense and revenue has fallen. How Much Do Companies Spend on Rent? A Look at Companies in the S&P 500 How much do companies spend on rent? Have companies’ changes in rent expenditures been commensurate with their change in revenue, and more broadly, headcount? Have companies’ occupancy costs fallen as a percentage of operating expenses? Rent Expense Analysis 2 for Companies in the S&P 500 To answer these questions, we drew from publicly available data for the S&P 500 and analyzed reported-rent expense.1 We evaluated data from the first full year of recovery post-recession (fiscal year 2010) alongside the most recent fiscal year (2016). In total, 397 companies spanning 9 different sectors were analyzed. (More detail on our methodology is included in the Appendix.) While we compared industry-aggregated data across just two points in time, we were able to make several meaningful conclusions about how companies have adjusted their rent expense in the context of their growth in revenue and employment. We caveat our findings by noting the limitations of the data: many companies lease not only their real estate, but also their equipment. Because rental expense is not broken down by type of asset, we were unable to distinguish between those expenses directly tied to occupancy costs and those that were not. -
Glossary of Financial Terms
GLOSSARY OF FINANCIAL TERMS Balance sheet The balance sheet sets out the assets and liabilities of a business and its net worth. Bottom line The closing cash balance, which then becomes the next month’s opening balance and provides the basis for comparison with the firm’s monthly cash-book total. Current assets Assets used or turned over within 12 months: cash in hand or at the bank, debtors and work in progress. Current liabilities Liabilities that need to be met regularly or within the current reporting year. They may include trade creditors, disbursements, bank overdrafts, lease or hire purchase payments and accrued expenses such as annual leave and insurance. Disbursements Client disbursements can be both an income and an expenditure component. Over a period these will be the same, apart from a small net outflow due to growth of the practice and increasing charges. Investing activities This category refers primarily to the cash flow of sales and purchases of assets relating to the business. An example of an inflow of revenue from an investing activity is the sale of an office, property or equipment. An outflow would be the purchase of such assets. Fees or income Cost basis when fees paid for legal services. Accruals when invoice raised for legal service. Financing activities This category relates to such things as the borrowing and repaying of loans, and returning investments to investors. Financial performance statement Also known as a profit and loss statement; shows all income and expense accounts over time while indicating profitability over the same period. The main items shown on a financial performance statement for a legal practice are: fees or income operating expenses net profit before tax provision for income tax net profit after tax. -
An Introduction to Basic Farm Financial Statements: Balance Sheet
W 884 An Introduction to Basic Farm Financial Statements: Balance Sheet Victoria Campbell, Extension Intern S. Aaron Smith, Associate Professor Christopher N. Boyer, Associate Professor Andrew P. Griffith, Associate Professor Department of Agricultural and Resource Economics The image part with relationship ID rId2 was not found in the file. Introduction Basic Accounting Overview To begin constructing a balance sheet, we Tennessee agriculture includes a diverse list need to first start with the standard of livestock, poultry, fruits and vegetables, accounting equation: row crop, nursery, forestry, ornamental, agri- Total Assets = Total Liabilities + Owner’s tourism, value added and other Equity nontraditional enterprises. These farms vary in size from less than a quarter of an acre to The balance sheet is designed with assets on thousands of acres, and the specific goal for the left-hand side and liabilities plus owner’s each farm can vary. For example, producers’ equity on the right-hand side. This format goals might include maximizing profits, allows both sides of the balance sheet to maintaining a way of life, enjoyment, equal each other. After all, a balance sheet transitioning the operation to the next must balance. generation, etc. Regardless of the farm size, enterprises and objectives, it is important to keep proper farm financial records to improve the long- term viability of the farm. Accurate recordkeeping and organized financial statements allow producers to measure key financial components of their business such A change in liquidity, solvency and equity can as profitability, liquidity and solvency. These be found by comparing balance sheets from measurements are vital to making two different time periods. -
Chapter 5 Consolidation Following Acquisition Consolidation Following
Consolidation Following Acquisition Chapter 5 • The procedures used to prepare a consolidated balance sheet as of the date of acquisition were introduced in the preceding chapter, that is, Consolidation Chapter 4. Following Acquisition • More than a consolidated balance sheet, however, is needed to provide a comprehensive picture of the consolidated entity’s activities following acquisition. McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. 5-2 Consolidation Following Acquisition Consolidation Following Acquisition • The purpose of this chapter is to present the procedures used in the preparation of a • As with a single company, the set of basic consolidated balance sheet, income statement, financial statements for a consolidated entity and retained earnings statement subsequent consists of a balance sheet, an income to the date of combination. statement, a statement of changes in retained earnings, and a statement of cash flows. • The preparation of a consolidated statement of cash flows is discussed in Chapter 10. 5-3 5-4 Consolidation Following Acquisition Consolidation Following Acquisition • This chapter first deals with the important concepts of consolidated net income and consolidated retained earnings. • Finally, the remainder of the chapter deals with the specific procedures used to • Thereafter, the chapter presents a description prepare consolidated financial statements of the workpaper format used to facilitate the subsequent to the date of combination. preparation of a full set of consolidated financial statements. 5-5 5-6 1 Consolidation Following Acquisition Consolidation Following Acquisition • The discussion in the chapter focuses on procedures for consolidation when the parent company accounts for its investment in • Regardless of the method used by the parent subsidiary stock using the equity method. -
Cash Flow Statement for a Services Business
Cash Flow Statement For A Services Business Web spates affrontingly while uppity Quint thrones prolately or discomforts succinctly. Myles is dyslogistically poignant after Midian Gilberto despumating his immutableness nostalgically. Cranial Chan bragging: he eliminated his cedulas edictally and apart. Budgeting allows for the contract review support of information about financial accounting systems offer one piece of flow for premium or borrowing As a service business, focus on cost control through efficient process design and waste management to boost operational performance ratios. Cash flow statements make business combination of services to help you an increase in accrued expenses, so far too small businesses need to dramatically affect your. Shows how public money comes from selling your products or services. Sales receipts from love and services and employee payroll totals. However this clutch is carried forward to income generation then understated as substantial is included in stream of sales when pattern is sold, therefore then change store inventory is reversed out of align to calculate cash flow. Use your own value. Transactions must be segregated into day three types of activities presented on the statement of cash flows operating investing and financing Operating cash flows arise leaving the normal operations of producing income either as cash receipts from revenue when cash disbursements to sand for expenses. This statement for businesses are not flow statements are activities provide you can be much cash flows of the money owed to investing activities can get trustworthy advice. With more money is flowing in than flowing out, a positive amount indicates an increase in business assets. -
Statement of Cash Flows
Title: Statement of Cash Flow Speaker: Christina Chi online.wsu.edu Cash vs. Accrual Accounting Cash basis accounting Recognizes revenue when cash is received and expenses when cash is paid Beginning cash + cash revenue – cash payments = ending cash Accrual basis accounting Recognizes revenue when earned and expenses when incurred Overview of Financial Statements Balance sheet provides a point-in-time statement of overall financial position of a hotel - “snapshot” of financial health of a hotel Income statement Assess hotel’s operating performance over a period of time Reports the profitability of a hotel’s operating activities Prepared on accrual basis accounting and include noncash revenues & expenses Neither can answer questions regarding cash inflows and outflows during an operating period Purpose of Statement of Cash Flows Report and identify the effects of cash receipts and cash disbursements on hotel’s business activities during a period of time Allows an evaluation of hotel’s liquidity & solvency Provides basis for the evaluation of managers’ performance on cash management Provides basis for cash budgeting Provides a foundation to predict hotel’s future cash flows Cash Flow Activity Levels Operating activities Relate to hotel’s primary revenue generating activities; such activities are usually included in determining income. Investing activities Include buying and selling fixed assets, buying and selling securities/investments not classified as cash equivalents, etc. Financing activities Include borrowing -
Classification of Land by Real Estate Developer
PHILIPPINE INTERPRETATIONS COMMITTEE (PIC) QUESTIONS AND ANSWERS (Q&A) Q&A No. 2018-11 Issue What is the correct classification of the land owned by real estate developer? Classification of land by real estate developer Background A real estate developer develops residential and commercial units which are sold or leased out to customers. These projects can be horizontal or vertical projects which are either: (a) units in a high-rise building which can be for office or residential use; (b) serviced lot; or (c) serviced lot and house. Projects can be in a single phase or in multiple phases and usually take more than one year to complete (e.g. 3-5 years). In the normal course of its business, the real estate developer purchases the following raw land: Land A - The entity has plans to construct and develop the parcel of land as a residential subdivision for sale as approved by the entity’s Board of Directors. The preparation of the master plan, detailing the plans as residential property, has commenced but the entity intends to start the physical construction activities (e.g. excavation) two years from the government approval of the master plan. Land B –The entity has plans to construct and develop the parcel of land as a residential subdivision for sale as approved by the entity’s Board of Directors. The preparation of the master plan, detailing the plans, has not commenced. Land C - The entity intends to develop the land into a commercial center for lease but preparation of master plan has not commenced and the entity does not intend to commence the physical construction activities within the year. -
Balance Sheet 101 by Mark Snyder | Focuscfo
Balance Sheet 101 By Mark Snyder | FocusCFO Accounting is the language of business, but unfortunately, it’s confusing almost to the point of mystifying to the layperson. A company’s balance sheet is one of the most important financial statements, yet many people don’t understand the “how” and “why” behind its purpose and structure. The purpose of the balance sheet is simple, it is merely a summary, at a point in time, of what a company owns [assets], owes [liabilities] and net worth [equity]. Why is it organized in such a weird way where the total Assets equals the total of Liabilities plus Equity? Wouldn’t it make more sense to have your Assets less your Liabilities equal your Equity? Accounting is based on the key concept of double entry bookkeeping in which debits have to equal credits. This key principle of balancing debits and credits hews well to the concept of a balance sheet and makes perfect sense to an accounting professional. Assets and Liability The asset and liability portions of the balance sheet are organized between current and non- current sections. Anything in the current section is something that will impact cash in 12 months or less. For example, accounts receivable is considered a current asset as it should be collected as cash within 12 months. Conversely accounts payable is considered a current liability as the amount will be paid to the vendor out of the company’s cash balance within the next 12 months. Working Capital The essence of the balance sheet is highlighting the working capital of a company. -
Part 3 Cash Flow Statement
Part 3 Cash Flow Statement Slide # 1 Cash Flow Statement The Cash Flow Statement is the second statement you will complete, since it draws information from the Income Statement and provides information for the Balance Sheet. The ChCash Flow Sta temen t summarizes the cash actlltually entitering and lileaving the company over a period of time. Slide # 2 Cash Flow Statement How is Cash different from Net Income? All companies have at least one non‐cash expense, which is depreciation. For companies that allow accounts receivable, revenues may be recorded without a cash inflow. Likewise with accounts payable, expenses can be deducted from Net Income without a cash outflow. Additionally, Net Income reflects activity for a period of time but does not indicate how much cash was available at the start of the period. Therefore, Net Income is not the same as Cash. Example: Cash Adjustment for Depreciation If you’re working on a cash‐basis, how much of a difference could there really be between Net Income and cash? Consider this example. A newspaper company spends $250,000 in cash on a new printing press. Using a 10‐year depreciation schedule, the only expense subtracted from Net Income for the year is $25,000 in depreciation. However, cash reserves have been reduced by the full $250,000 cost. If you looked only at Net Income, you might think the company’ s cash balance is $225,000 higher than it really is. Slide # 3 Cash Flow Statement Why do you care about the cash balance? Companies only continue operating only while there is cash to pay suppliers and employees. -
Sample Operating Expense Worksheet
FTA C. 9030.1E – Appendix C OPERATING ASSISTANCE PROJECTS 1. APPENDIX CONTENTS. For applicants eligible to receive Section 5307 operating assistance, the following paragraphs present budget information to determine which operating expenses are eligible for federal funding. The discussion provides information on certain revenue and expense items of particular relevance to operating assistance projects. For further assistance, the applicant should review the cost principles and standards discussed in Office of Management and Budget (OMB) Circular A-87, “Cost Principles for State, Local, and Indian Tribal Governments,” 2 CFR part 225. The Federal Transit Administration (FTA) reserves the authority to request any applicant to provide documentation in support of expense and other financial information indicated in an operating assistance application on a case-by-case basis. In the event that an audit reveals an overpayment or an inappropriate payment of operating assistance funds, the recipient will be required to reimburse FTA. 2. OPERATING EXPENSE WORKSHEET. FTA provides an operating expense worksheet for applicants to determine the amounts of available Urbanized Area Formula Program funds that the applicant may actually request. The use of this worksheet ensures consistency in the manner FTA calculates operating expenses and provides an audit trail, which may have long- term benefits to the recipient. FTA does not require the applicant to submit this worksheet as part of its application; however, the applicant must maintain records to support charges to a project. The operating expense worksheet developed in support of the funding request should contain several basic line items, as follows: a. Eligible Operating Expenses. Eligible operating expenses are limited to direct labor, material, and overhead expenses incurred on an accrual basis by an operator to provide public transportation service in the UZA, usually during the specified project time period. -
Simplifying Classification of Deferred Taxes
Simplifying Classification of Deferred Taxes On November 20, the Financial Accounting Standards Board (FASB) updated U.S. generally accepted accounting principles (GAAP) to simplify presentation of deferred taxes. Accounting Standards Update (ASU) 2015-17, Balance Sheet Classification of Deferred Taxes, amends Accounting Standards Codification Topic 740 (formerly FAS 109), Income Taxes, by requiring the classification of all deferred tax liabilities and assets as noncurrent in a classified statement of financial position. The amendments in this ASU have no effect on entities not presenting a classified statement of financial position. The standard is effective for annual and interim periods beginning after Dec. 15, 2016, for public business entities. For all other entities—including not-for-profit organizations and employee benefit plans with activities subject to income taxes—the amendments are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. An entity may apply the amendments either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. All entities would disclose the nature of and reason for the change in accounting principle in both the interim and annual period first adopted. For prospective application, an entity would note that prior periods were not retrospectively adjusted; for retrospective application, an entity would disclose quantitative information about the effects of the accounting change on prior periods. FASB’s position is that presenting deferred tax assets and liabilities in one place, as a noncurrent asset or liability, won’t negatively affect the quality of information given to investors because the current and noncurrent classification generally does not reflect when a temporary difference will reverse and become a taxable or deductible item. -
Learn Debits and Credits
LEARN DEBITS AND CREDITS Written by John Gillingham, CPA LEARN DEBITS AND CREDITS Copyright © 2015 by John Gillingham All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in a book review. TABLE OF CONTENTS Introduction .................................................................................................... 6 More Resources .............................................................................................. 7 Accounting Play – Debits & Credits ......................................................... 7 Accounting Flashcards ............................................................................ 7 Free Lessons on Podcast and Downloads ................................................ 8 Intro to Debits and Credits .............................................................................. 9 Debits and Credits Accounting System .................................................... 9 The Double Entry System ........................................................................11 Different Account Types..........................................................................12 Debits and Credits Increases and Decreases ...................................................15 Increases and Decreases .........................................................................15 Debits and Credits by Account ................................................................16