Guidance on Financials:
The table below is the three financial statements from the High Quality Nursery spreadsheet that is on D2L. We are expecting this general structure in your financials. I suggest constructing your own statements in Excel building upon this structure. You will have: (1) more and perhaps differences in labeling (e.g., accrued interest); (2) many of you will have statements with current, intermediate, and long terms assets and liabilities; and (3) you will need to show - if you are starting with a cash income -- how you got to an accrual income statement (Chapter 4, beginning with Cash vs Accrual Accounting).
To show how you got from cash to accrual income, show cash income and expenses with the adjustments to accrual. If you like, you see these adjustments under cash flows; you are ‘reversing the process'. Most of you will not have dividends but you will have an owner draw. When you get these statements developed and reconciled, we will discuss the opportunity cost of family labor in making some of the ratio calculations. In the High Quality Nursery Case, labor costs were included in cost of goods sold or operating costs.
Some teams will have market value balance sheets, some will have cost (book) value balance sheets, and some will have both.
We have one case where the team has a ending balance sheet, an accrual income statement and a cash flow statement (that looks like High Quality Nursery). That is enough information to calculate what the beginning balance sheet would have been.
Attachment:- Financial Worksheets.rar