ReportingtomanagmentWeek4ArianaBusciglio.pptx

Gem Star Production

1. Gemstar production. By: Ariana Busciglio.

2. Summary The following presentation will introduce the company Gemstar Production's financial condition, we will be discussing, the balance sheet, profit and loss statement, statements of cash flow, and internal controls of the company, and we will go into detail about the financial background of the company and lastly, we will dive into the key points and concepts Learn over the past 4 weeks

3. Balance Sheet This balance sheet provides a snapshot of the company's financial position typically at the end of a reporting period such as a quarter or a fiscal year. We can o bserve 3 types of accounts: Assets: which r efers to various valuable resources or properties that an individual, organization, or entity owns or controls. Liabilities: these r epresent obligations or debts that an individual, organization, or entity owes to others. Equity: That represents the ownership interest in a company or entity. It is the residual interest in the assets of the entity after deducting liabilities.

4. Assets

5. Liabilities

6. Equity

7. Three Types of Ratio Debt Ratio: The debt ratio measures the proportion of a company's assets that are financed by debt. It provides insight into the company's financial leverage and risk. The formula for the debt ratio is: Total Liabilities=$40,233 Total Liabilities=$40,233 Total Assets=$65,066 Total Assets=$65,066 Therefore, Debt Ratio=$40,233$65,066≈0.618Debt Ratio=$65,066$40,233​≈0.618 Gem Star Productions has a debt ratio of approximately 0.618, meaning that about 61.8% of its assets are financed by debt .

8. Three Types of Ratio 2. Return on Assets (ROA): Return on assets measures how efficiently a company utilizes its assets to generate profit. The formula for return on assets is: ROA=Net Income Total Assets ROA= Total Assets Net Income​ Liabilities loan Payable has a balance of $49,280 Interest Payable balance of $233.00

9. Three Types of Ratio Return on equity measures how efficiently a company utilizes its equity to generate profit. The formula for return on equity is: ROE= Net Income Total Equity Total Equity Net Income​ Equity  Common Stock has a balance of $20,000. Retained Earnings have a balance of  $4,833.00 .

10. Profit & Loss Statement A profit and loss statement, also known as an income statement, is a financial statement that summarizes a company's revenues, expenses, and profits (or losses) over a specified period. It provides a snapshot of a company's financial performance during that period, typically quarterly or annually. The profit and loss statement provides valuable insights into a company's financial performance, indicating its ability to generate revenue, control expenses, and ultimately, generate profits. It is used by investors, analysts, creditors, and management to assess the company's profitability, efficiency, and overall financial health over a specific period. Profit and Loss Statement ACTUAL BUDGET VARIANCE Sales: Event Revenue $11,400 $11,400 Less Expenses: Utilities Expense 220 220 Payroll Expense 3,200 3,200 Depreciation Expense 297 297 Interest Expense 233 233 Office Supplies Expense 667 667 Insurance Expense 1,200 1,200 Equipment Rental Expense 750   750 Total 6,567 Net Income 4,833 4,833

11. Cash Flow GemStar Productions Statement of Cash Flows OPERATING ACTIVITIES Net Income 4,833 Adjustments to reconcile Net Income to net cash provided by operations: Supplies Inventory -1,333 Deposit at Venue -500 Interest Payable 233 Net Cash Provided by Operating Activities 3,233 INVESTING ACTIVITIES Depreciation 297 Vehicles -14,250 Net Cash Provided by Investing Activities -13,953 FINANCING ACTIVITIES Loan Payable 40,000 Common Stock 20,000 Net Cash Provided by Financing Activities 60,000 Net Cash Increase for the Period 49,280 Cash at End of the Period 49,280 The Statement of Cash Flows is a financial statement that provides information about the cash inflows (receipts) and outflows (payments) of a company during a specific period. Its primary purpose is to report the company's sources and uses of cash, helping stakeholders understand how cash is being generated and utilized by the business. This statement complements the income statement and balance sheet by focusing specifically on cash transactions, providing insights into the company's liquidity, operating efficiency, and financial flexibility.

12. Cash flow Cash Flow

13. Five internal Controls Detective Control: Purpose: To identify errors, irregularities, or fraud after they have occurred. Function: Helps ensure no fraudulent activities go undetected and provides evidence for investigation and corrective action. Example: Regular audits, reconciliations, and review processes. Preventive Control: Purpose: To reduce the likelihood of fraud or errors from occurring in the first place. Function: Aligns various areas of the company to prevent misuse of funds and protect company assets. Example: Implementing travel authorization procedures, access controls, and segregation of duties. Corrective Control: Purpose: To rectify errors or issues identified through detective controls or audits. Function: Addresses and resolves identified problems to prevent recurrence and ensure accuracy in financial records. Example: Adjusting entries, implementing new procedures, and providing additional training. Physical Control: Purpose: To physically secure assets and valuable resources of the company. Function: Protects physical assets from theft, damage, or unauthorized access. Example: Using locks, safes, surveillance systems, and security personnel to safeguard equipment, inventories, and cash. Access Control: Purpose: To manage, restrict, and monitor access to financial data, systems, and resources. Function: Ensures that only authorized individuals have access to sensitive information, reducing the risk of data breaches and unauthorized transactions. Examples: User authentication, password policies, role-based access controls, and encryption techniques.

14. Recap

15. References Accounting Terminology Guide - over 1,000 Accounting and Finance Terms. www.nysscpa.org/professional-resources/accounting-terminology-guide#sthash.zao5cAht.dpbs . Bloomenthal , Andrew. “Financial Ratio Analysis: Definition, Types, Examples, and How to Use.”  Investopedia , 26 Feb. 2024, www.investopedia.com/terms/r/ratioanalysis.asp . Bragg, Steven. “ AccountingTools .”  AccountingTools , 21 Mar. 2019, www.accountingtools.com/articles/basic-accounting-concepts.html . CFI . “Fraud Triangle.”  Corporate Finance Institute , 28 Nov. 2022, corporatefinanceinstitute.com/resources/accounting/fraud-triangle/. Murphy, Chris B. “Understanding the Cash Flow Statement.”  Investopedia , 29 Feb. 2024, www.investopedia.com/investing/what-is-a-cash-flow-statement/ .

16. Thank you.