Accounting and Banking

Owning a Coffee ShopThe Better create from raw somatic and Perfect flux coffee shops argon both(prenominal) for sale. The current owners argon enquire the same price for both establishments, however their mazy sense sheets deviate significantly. To set up which trade would be the topper investment for my partners and me, a number of factors must be taken into consideration much(prenominal)(prenominal) as the company?s ability to break its bills, the future(a) potential to earn a profit, its historical performance, the way it is briefly operated, competition, and the staff. (Bovée/Thill/Mescon, 2007) (Sawyer, 2007)Balance sheets were provided for each company, however additional information such(prenominal) as operating expenses and sales figures, that are found on the Income Statement would be helpful in understanding widely distributed operating expenses and day-to-day operations. This knowledge is critical to determine the monetary health of these businesse s as well as understanding their swop flow. (Bovée/Thill/Mescon, 2007)The balance sheets show that Perfect Blend has to a greater extent cash on hand, however they as well have more than long-term debt with $19,000 more in pious platitude loans. Better Brew has less owner?s right initially invested in the business at start-up, and a higher(prenominal) capital balance providing the opportunity for additional investment in the business.

(Mescon/Bovee/Thill, 2001)Understanding whether each business uses the cash or accrual report rule is all important(p) to understanding the viability of the assets and liabilities listed on the balance sheet. To determine which accounting method is used, the following questions need to be ! answered by the current owners of both businesses:Does the company use cash buttocks accounting, whereby revenues are only record when cash are really original for a sale and expenses are recorded when they are actually give;Does the company use accrual tush accounting, whereby revenues are recorded when the sale is made regardless of whether the funds are received and expenses are recorded when the liability... If you want to pretend a dear essay, order it on our website: OrderEssay.net

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