Financial statements for Lemonade

Introduction Financial reports are very important tools used in gauging the financial health of business enterprises and making predictions of the future of a business. It is therefore important that any business organization use these reports in formulating its strategies and future goals to be delivered.Advertising We will write a custom report sample on Financial statements for Lemonade specifically for you for only $16.05 $11/page Learn More While the financial reports give a wider picture of the state of affairs of the business, the ratio provides specific areas of strength within the business and provides an opportunity for the management to leverage on its areas of strength and take corrective measures against the weaknesses. This paper will provide the financial statements and the corresponding ratios for Lemonade stand business for the two seasons. This will be followed by a critical analysis of the financial health of the business as shown by t he financial report. Financial statements Balance sheet This is a very important financial statement in a business entity. It shows the financial position of the business in terms of assets, liabilities and the owner’s equity. A well prepared balance sheet must therefore clearly indicate the assets owned by the business, the liabilities that the business owes and the money invested by the shareholders or owners of the business. The financial statement below shows the balance sheet for Lemonade business for the two seasons: The income statement on the other hand provides information about the financial performance of a business within a certain period of time.It gives the revenues and expenditures which must be matched to realize the earnings. The income statement below is a summary of the Lemonade business for the two seasons: Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Analys is of the ratios and the financial statements The balance sheet above shows that the business financial position improved greatly between season one and season two as the balance sheet value increased from $16480 to $18400 representing a 12.22% jump in the value of the balance sheet. The same trend was witnessed with the equity side of the balance sheet as the value of equity increased from $4900 to $6200 which was quite impressive for the business. The company liabilities also increased from 11880 to 12120 representing 2% increase. This can be attributed to the increase in the level of activity as the firm tried to improve its level of operation. From the income statement the firms total earnings increased by more than 78% from $9400 to $16800.The increase in earnings is attributed to the large jump in the firms revenues from $44000 to $5700.Although the expenses also increased, the percentage increase stood at 17% which was too low compared to the increase in the revenues which st ood at 29%. One of the key factors that determine the financial health of any business is the liquidity. A closer look at liquidity ratios such as current ratio and cash ratio shows a great improvement in the firm’s liquidity from season one to season two. The current ratio in season two stood at 2.10 up from 1.8 in season one and this clearly shows that the firms current asset were able to cover the current liabilities by more than 2 times compared to 1.8 times in season one. The same trend is seen in cash ratio where the firm’s cash and cash equivalents stands at 2.09 times its current liabilities. This is an improvement from 1.7 times recorded in the first season. The debt to equity ratio which shows the level of exposure to debt financing reduced from 2.3 to 1.4 from season one to season two. This means that the firm is properly protected from too much debt and hence the company can use much of its earnings to finance expansion projects rather than repay debt. The inventory turnover increased from 4 times to 9 times which clearly shows an improvement in the firm’s efficiency in operations and hence stock is able to move faster than in the first season. The asset turn over however declined from 3.09 to 2.6 which means that every dollar of asset invested only realized 2.6 in season two compared to 3.09 in season one. This calls for better ways of managing assets in the business. The firm should also avoid keeping too much idle assets (Brigham Houston, 2009).Advertising We will write a custom report sample on Financial statements for Lemonade specifically for you for only $16.05 $11/page Learn More Another major indicator of the financial health of a business is the profitability and from the profitability ratios presented the business was able to record improved profits in season two compared to season one. The profit margin increased from 70.5% to 78% and this indicates the firm was able to realize more th an 78% sales as profits. The return on equity increased from 47% in season one to 58% in season two. The returns on assets also increased from 10% in season one to 15% in season two. These are clear indications of poor management of equity and assets respectively and hence the need for prudent ways of managing assets and equity. Based on the above financial statements and ratios the firm still stands at a better position provided by strong liquidity and less exposure and hence it has a bright future. The management must however set up proper methods of managing assets and owners equity to realize maximum returns. Reference Brigham, E.F. Houston, F.J. (2009). Fundamentals of Financial Management. 12th ed. Mason, OH : Cengage South-Western. This report on Financial statements for Lemonade was written and submitted by user Thanos to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

How Physics Works and Why You We Study It

How Physics Works and Why You We Study It Physics is the scientific study of matter and energy and how they interact with each other.  This energy can take the form of motion, light, electricity, radiation, gravity - just about anything, honestly. Physics deals with matter on scales ranging from sub-atomic particles (i.e. the particles that make up the atom and the particles that make up those particles) to stars and even entire galaxies. How Physics Works As an experimental science, physics utilizes the scientific method to formulate and test hypotheses that are based on observation of the natural world. The goal of physics is to use the results of these experiments to formulate scientific laws, usually expressed in the language of mathematics, which can then be used to predict other phenomena. When you talk about theoretical physics, you are speaking of the area of physics that is focused on developing these laws and using them to extrapolate into new predictions. These predictions from theoretical physicists then create new questions that experimental physicists then develop experiments to test. In this way, the theoretical and experimental components of physics (and science in general) interact with each other and push each other forward to develop new areas of knowledge. The Role of Physics in Other Fields of Science In a broader sense, physics can be seen as the most fundamental of the natural sciences. Chemistry, for example, can be viewed as a complex application of physics, as it focuses on the interaction of energy and matter in chemical systems. We also know that biology is, at its heart, an application of chemical properties in living things, which means that it is also, ultimately, ruled by the physical laws. Of course, we dont think of these other fields as part of physics. When we investigate something scientifically, we look for patterns at the scale that is most appropriate. Though every living thing is acting in a way that is fundamentally driven by the particles of which it is composed, trying to explain an entire ecosystem in terms of the behavior of fundamental particles would be diving into an unhelpful level of detail. Even when looking at the behavior of a liquid, we look in general at the properties of the fluid as a whole through fluid dynamics, rather than paying particular attention to the behavior of the individual particles.   Major Concepts in Physics Because physics covers so much area, it is divided into several specific fields of study, such as electronics, quantum physics, astronomy, and biophysics. Why Is Physics (Or Any Science) Important? Physics includes the study of astronomy, and in many ways, astronomy was humanitys first organized field of science. Ancient peoples looked to the stars and recognized patterns there, then began using mathematical precision to make predictions about what would happen in the heavens based on those patterns. Whatever flaws there were in these specific predictions, the method of trying to understand the unknown was a worthy one. Trying to understand the unknown is still a central problem in human life. Despite all of our advancements in science and technology, being a human being means that you are able to understand some things and also that there are things you do not understand. Science teaches you a methodology for approaching the unknown and asking questions that get to the heart of what is unknown and how to make it known. Physics, in particular, focuses on some of the most fundamental of questions about our physical universe. Pretty much the only more fundamental questions that could be asked fall in the philosophical realm of metaphysics (named for being literally beyond physics), but the problem is that these questions are so fundamental that many of the questions in the metaphysical realm remain unresolved even after centuries or millennia of inquiry by most of historys greatest minds. Physics, on the other hand, has resolved many fundamental issues, even though those resolutions tend to open up whole new types of questions. For more on this subject, check out Why Study Physics? (adapted, with permission, from the book Why Science? by James Trefil).