Chemalite, Inc. is a company that manufactures and sells chemical products. The balance sheet is a financial statement that presents a company's financial position at a specific point in time. It is made up of two main sections: assets and liabilities.
Assets are resources owned by a company that have monetary value. They are divided into two categories: current assets and non-current assets. Current assets are those that are expected to be converted into cash within one year or less, such as cash and cash equivalents, accounts receivable, and inventory. Non-current assets are long-term assets that are not expected to be converted into cash within one year, such as property, plant, and equipment, and intangible assets such as patents and trademarks.
Liabilities are obligations that a company owes to others. They are also divided into two categories: current liabilities and non-current liabilities. Current liabilities are obligations that are expected to be paid within one year or less, such as accounts payable, taxes payable, and short-term debt. Non-current liabilities are long-term obligations that are not expected to be paid within one year, such as long-term debt and pensions.
The balance sheet also includes shareholder equity, which is the difference between a company's assets and liabilities. It represents the residual interest in the assets of the company after liabilities are paid. Shareholder equity is made up of capital stock, retained earnings, and any other equity components.
Overall, the balance sheet provides a snapshot of a company's financial position at a specific point in time. It shows what a company owns and owes, as well as the amount of capital invested by shareholders. By analyzing a company's balance sheet, investors and analysts can assess the company's financial strength and risk.
In early 2003, Chemalite, Inc. For this promise to become true, a number of hurdles, including the design and deployment of adequate resource management and information services, need to be overcome. Rest assured that expenditures for inventory will decrease significantly beginning with Year Two, with primarily repair and upgrade expenditures being incurred. Things are looking way up for this young company. Assume use of the indirect approach. It shows that once the product has penetrated the market well, the company will be able to generate higher returns for the shareholders. Therefore, zero debt, high liquidity, positive cash flow, and a high solvency level will give the company stability and an opportunity to grow in the future.
The case study shows that Chemalite Inc. I strongly disagree to continue to sell the old product and complete the fix-price contracts. It also provides a picture of how liquid those assets might be. Exhibit 1 shows the proforma cash flow statement for 1992 using the indirect method. Use the following assumptions: 1 Sales grow by 6%.
EXECUTIVE SUMMARY In the case of Chemalite, Inc. An income statement mainly shows the net profits or loss of a company. All of the financial statements are for a period of time except the a. Johnson and Michael G. Furthermore, it is obvious from the cash flow statement that the firm is using its short term loans to buy long term assets. Specifically, the items that will be analyzed are the gross profit, operating profit, and net income.
Registered office: Proctor House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG8 7PJ. Another reason is that Chemalite Inc does not buy the material on credit. From the income statement, a number of ratios can be computed in order to evaluate the profitability of Chemalite Inc. How much is related to investments? Decisions I do believe that Chemalite, Inc. Income Statement Balance Sheet Statement of Cash Flows For Year Ended December 31, 2003 December 31, 2003 For Year Ended December 31, 2003 Revenues 754,500 Cash 113,000 Operating Cash Flows Expenses: Accounts Rec.
I am sure that the unemulsified plasma product allows more people to be infected with AIDS and it had been proved by CDC in 1983. The net profit margin is estimated at 5. Therefore, the company has a high potential of generating more profit at the beginning of 2004. Plus, the prototype value will soon increase and the Olympic Games Athens 2004 just placed a huge order with the company, which will both bring in a big profit and help promote the product. Refer to the Cash account in column 1. In addition, the loans borrowed were cleared during the first year of operation.
The investors were convinced that the business was not doing well since there was no revenue generated during this period. This will enable the company to manufacture more than enough Chemalites for this order. This can be assumed from the absence of accounts payable from the balance sheet. United States: Pearson Publishers. This solution includes: A Word File and An Excel File Chemalite, Inc. In a service-type Premium Balance sheet Generally Accepted Accounting Principles Liability Balance Sheet: the Basics Balance sheets: the basics A balance sheet is a financial statement at a given point in time.
Problem Set 2: Chemalite Case 15. Company registration number- 4964706 Company registered in England and Wales. Exhibit 2 shows that the cash flow statement where direct method is used. Further, a review of the inventory shows that the company had a balance of 55,000 raw materials. Financial management for decision makers.
This shows that the leverage level of the company is zero. You should use this data as the basis for your forecast. Prepare a report that lists transactions in these three categories and the corresponding amount of cash inflow or outflow this report is called the direct statement of cash flows. The future of the business is bright because currently, they have an order for The Olympic Games, Athens. The main source of cash for Chemalite Inc. Prepare a proforma statement of cash flows for 1992 using the direct method. The gross profit margin for the equipment industry in 2003 was 25.
Preferred stock did not change during the year. The expenditures, transactions and cash outflows are given in two halfs of the year 2003. The industry average for the ratio is 35%. Accounts receivable and inventory remained relatively constant during the year. Try to analyse it in your own words.
Similarly, the increase or decrease in accounts receivable, inventory, taxes payable and prepaid insurance were adjusted to derive the actual cash from operations. KCCL was founded in 1956 and became pioneer in manufacturing high quality beauty and personal care products in this subcontinent. Yet again, between years six and seven a strength is noted in gross profit, increasing by 37. Also attached is an Excel Copy of Chemalite Forecast Example which gives an example of what is needed. The Olympics Committee placed an order for 60,000 Chemalites. This could indicate that the company may have liquidized some of their assests within the year.