Balance Sheet and Income Statement Commentary Essay
Organizations need to keep a close eye on their finances. They need to know from where the money is coming and where it is going. A close look at the balance sheet and income statement will answer those questions. This paper will make statements about different organizations and their balance sheet and income statements.
Deswell industries has been losing face value according to NASDAQ. In the balance sheet the amount of their total current assets in 2010 was 72,844 and in 2012 it was 75,203 dollars, but the total assets in 2010 were 134,011 and in 2012 they were at 121,959 dollars. Even though their total current assets increased, their total assets decreased less than 12 thousand. Deswell’s liabilities increased close to 2,000 dollars and stockholder’s equity decreased by 13 thousand all within the 2010 and 2012 physical year. The income statement has the same sad news. Deswell’s gross profit has gone from 12,656 down to 9,465 dollars. Their operating income has increased close to 1,000 dollars and their net income has stayed gradually the same but decreased by 30 dollars. Management needs to look at the root of the problem and come up with a solution. Old Dominion Freight Line
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Old Dominion Freight Line, Inc. (ODFL) is a strong financial company. ODFL’s total current assets have increased from 17,000 in 2010 to 21,000 dollars in 2012. In two years ODFL’s total assets increased by 500,000 dollars. Total liabilities increased, which is normal, but the increase was a slight 100,000 dollars not much compared to the total assets acquired within those physical years. The stockholder’s equity and tangible assets increased close to 400,000 dollars. ODFL’s income statement has the same good news of increasing profits.
In 2010, OFDL’s gross profit was 1,048,671and it increased to 1,485,428 dollars more than 300,000 dollar increase. Their operating income has increased but that is normal for a company expanding. The operating income increased more than 150,000 dollars within 2010 and 2012. The best financial news is their net income. ODFL’s net income more than doubled within 2010 and 2012. This company is obviously doing well financially. Centennial Specialty Foods Corporation (CHLE)
This company is probably going out of business because its shares are at 0.0030. The balance sheet from 2003 had 7,610 dollars and in 2004 it had 2,820 dollars in total current assets. The total assets for that period were 15,596 dollars in 2003, and it decreased to 10,425 dollars, a decrease of 5,000 dollars. The total liabilities in 2003 were 7,832 dollars and they decreased to 3,709 dollars most likely because they did not want to incur any more debt. The stockholder’s equity and net tangible assets decreased by 1,000 dollars as well.
The income statement is just as bad as the balance sheet. In 2003, the gross profit was 1,821 dollars and it decreased to 1,149 dollars. The operating income increased from 286 dollars in 2003 to 1,355 dollars in 2004. The only real good news about the income statement is the net income increased by 761 dollars in 2004. Looking at the financial statements, CHLE shares are very low and nobody would want to invest in this company. BOK Financial Corporation (BOKF)
BOKF is a growing company that has a great looking balance sheet because in 2010 it had 23,941,603 dollars in total assets and in 2012 it had 28, 148,631 dollars in total assets, an increase of five million dollars. The total liabilities increased from 21,419,877 dollars in 2003 to 25,190,771 dollars, an increase of close to five million as well. The stockholder’s equity increased by 400,000 dollars and the net tangible assets increased about the same. The income statement for BOKF shows an increase in total revenue of more than 100,000 dollars from 2010 to 2012. The income statement does not show any numbers for gross profit or operating income. Their net income was more than 100,000 dollars also. A person will be wary of this company because of the numbers not displayed. The company is doing well but the value of the stock increases slowly.
Conclusion The balance sheet and income statement will tell the story of how the business is doing financially. After reading the financial statements of these aforementioned companies, the reader may decide on whether to invest or not to invest in one of those companies.