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Verona Springs Mineral Water

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Verona Springs Mineral Water

Verona Springs Mineral Water is a very new company. I have looked through their financial records and evaluated their performance. When I first look at the Balance Sheet I see that the company doesn't have a lot of assets or liabilities. This makes sense due to the fact that the company is just starting off. They have a pretty high cost for buildings and equipment since they just have to purchase their facilities and all the equipment. As I looked at the liabilities side, I noticed the company has $500,000 worth of common stock being invested in by shareholders. This shows that shareholders have residual interest in the company, which means they think it will be successful in the coming years.

Next, I looked at the Income Statement. The first thing that stands out is the net loss of $200. I feel that $15,000 in revenues is decent for the first two months a company has been around, however it is clear that is not enough for this company. The expenses accumulated of the first two months exceeded their revenues. I think that the company should take these numbers and either hope that in the next few months revenues increase or make budget cuts. The company's supplies expense seems a little high, but I feel that this section is the biggest reason for the net loss. They needed certain supplies to start off that they may not need in the coming months.

On the Statement of Shareholders' Equity, I noticed that there were no disbursements to shareholders'. I think this was in the best interest of the company since they just started, especially since they have a net loss after the first two months. Lastly, I looked at their Statement of Cash Flows. I notice that most of the cash came from their financing activities, such as sale of

stock and notes and long-term debt. The next thing that stands out is the $765,000 that was used for investing operations. Mostly used for land and a little for buildings and equipment, these are expenses that are normal to new businesses. Their overall cash as of February 2, 2013 was $36,100.

On the Statement of Cash Flows, the investing activities section shows a large decline in cash. $765,000 went out to invest in land and buildings. I feel that this is a large amount of cash to be going out of a new company. On a yearly basis, I feel that this may raise some concern. I do however feel that this cash investment was necessary to start their business. Without land and equipment, this company probably wouldn't have been able to get started in the first place. These types of investments are the ones that help a company in a long run. So no I do not see this decline as a concern.

Overall, I feel that these financial statements look good for having just started. I do not think that much was left out because they do not have many assets or liabilities as of right now. As time goes



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