Financial

1. Reporting to
Management
By: Travonn Lee
1

2. GemStar Corporation
BALANCE SHEET
As of May 31, 2020
TOTAL
ASSETS
Current Assets
Bank Accounts
Cash 50,700.00
Total Bank Accounts $50,700.00
Accounts Receivable
Accounts Receivable (A/R) 0.00
Total Accounts Receivable $0.00
Other Current Assets
Deposit at Vendor 500.00
Supplies Inventory 1,333.34
Total Other Current Assets $1,833.34
Total Current Assets $52,533.34
Fixed Assets
Vehicle 13,953.13
Total Fixed Assets $13,953.13
TOTAL ASSETS $66,486.47
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable (A/P) 1,420.00
Total Accounts Payable $1,420.00
Other Current Liabilities
Interest Payable 233.33
Total Other Current Liabilities $233.33
Total Current Liabilities $1,653.33
Long-Term Liabilities
Loan Payable 40,000.00
Total Long-Term Liabilities $40,000.00
Total Liabilities $41,653.33
Equity
Common Stock 20,000.00
Retained Earnings
Net Income 4,833.14
Total Equity $24,833.14
TOTAL LIABILITIES AND EQUITY $66,486.47
2

3. Current Ratio
Current Assets divided by Current Liability
$52,533.34 divided by $41,653.33 = 1.20
This is the measurement of liquidity, and a
business’s ability to pay short-term
obligations.
3

4. Debt to Asset Ratio
Total Liability divided by Total Assets
$41,653.33 divided by $66.486.47 = 1.59
This is to determine the total debt to total
assets.
4

5. Return on Assets Ratio
Net Profit divided by Total Assets
$11,400 divided by $66.486.47 = 0.17
This manages performance ratio to
compare different companies and the use
their assets.
5

6. Return on Equity Ratio
Net Income divided by Average Common Stock
$4,833.14 divided by $20,000 = .24
Return on equity reveals how much after-
tax income a company earned in
comparison to the total amount of
shareholder equity found on the balance
sheet
6

7. Trends
7

8. Explanation
1) Event Revenue: GemStar Corp made a $8,400 profit. All Sells
exceeded expectation.
2) Equipment Rental Expense: GemStar Corp went over the budget by
$500. More people showed up, so hired more vendors and outdoor
canopies.
3) Insurance Expense: GemStar Corp over budgeted by $1,100. The
insurance company lowered the premium.
4) Interest Paid: GemStar Corp under budget by $83.33. Interest went
up due to more people showing up to venue.
5) Office Supplies Expense: We were under budget by $123.66. We
needed more receipt papers.
6) Salaries & Wages: We went $1700 under budget. We had to hire
more people.
7) Utilities: We over budgeted by $120. We had to budget more for
power usage for the other vendors.
8) Depreciation: We over budgeted by $4,703.13. Just in case of any
damages to truck.
8

9. 9

10. Explanation
1) Event Revenue: $11,400
2) Equipment Rental Expense: $750
3) Insurance Expense: $1200
4) Interest Paid: $233.33
5) Office Supplies Expense: $666.66
6) Salaries & Wages: $3,200
7) Utilities: $220
8) Depreciation: $296.87
TOTAL EXPENSES: $6,269.99
NET INCOME: $4,833.14
10

11. 11

12. Statement of Cash Flow
12
• Operating Activities:
Net Income: $4,833.14
• Investing Activities:
Vehicle: -$13,953.13
• Financing Activities:
Loan Payable: $40,000

13. 5 Internal Controls
13
• Security Cameras
• Hiring Security Guards
• Hire Loss Prevention
• Payroll
• Accounting

14. 14

15. 15