LettPSKS7000-4 NORTHCENTRAL UNIVERSITY ASSIGNMENT COVER SHEET

Learner: Patricia Lett THIS FORM MUST BE COMPLETELY FILLED IN Please Follow These Procedures: If requested by your mentor, use an assignment cover sheet as the first page of the word processor file. The assignment header should include the Learners last name, first initial, course code, dash, and assignment number (DoeJXXX0000-1) justified to the left and the page number justified to the right. Keep a Photocopy or Electronic Copy of Your Assignments: You may need to resubmit assignments if your mentor has indicated that you may or must do so. Academic Integrity: All work submitted in each course must be the Learners own. This includes all assignments, exams, term papers, and other projects required by the faculty mentor. The known submission of another persons work represented as that of the Learners without properly citing the source of the work will be considered plagiarism and will result in an unsatisfactory grade for the work submitted or for the entire course, and may result in academic dismissal. SKS7000-8 Doctoral Comprehensive Strategic Knowledge Studies Gillian Silver #4 Memo Business Finance and Accounting

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LettPSKS7000-4

Memorandum

To: XYZ Construction, Inc. Employees From: Patricia Lett Date: June 3, 2012 Subject: Mandatory Meeting Concern Business Finance and Accounting

As many of you may have already heard, our Chief Financial Officer (CFO) for XYZ Construction Inc. has been promoted to the newly created position of Vice President of Overseas Operations. The CFOs absence leaves a void in the knowledge base of the owners group regarding several key financial and accounting principles. To make sure everyone knows exactly what to expect there will be a mandatory employee meeting this Wednesday, the 6th of June. The meeting will be held in the lounge from 6:00 a.m. to 8:00 a.m. A breakfast of doughnuts, milk, and coffee will be served so there is no need to eat before you come. At the meeting we will discuss Financial management Accounting Internal control Cash management Sarbarnes-Oxley regulations

Background: XYZ Construction, Inc. is a company that performs horizontal construction work including roads, airfields, and bridges. The companys headquarters is in Denver, Colorado, and has 16 field offices located in 11 states. The workforce includes heavy and light equipment

LettPSKS7000-4 operators, civil engineers, and project managers along with an administrative staff in the headquarters facility with support staff in each of the 16 field offices. The company has 2,300 year-round employees and will surge to an average of 4,500 employees during peak construction periods. Currently, XYZ Construction Inc. is a privately owned company that began as a family business in the 1950s. The present owners have decided that it is time to transform the business from one of private ownership to public ownership and plans for its Initial Public Offering (IPO) in 12 months. Evaluation: XYZ Construction has profit $33.3 million in the last year. The total done in work were $186.7 million, and cost of upkeep and supplies were ($153.4) million. The net income of the company earning per shares ended at $0.556 and Diluted earnings per shares was $0.526. A financial statement balance sheet must be keep in order to keep track of what is going out and coming in. (Valacich & Schneider, 2011) The SOX regulations must be followed which can be found in the company handbook which will reduce issues in the company. Every public company is required to construct four financial statements that include the balance sheet, the income statement, the statement of cash flows, and the statement of stockholders equity. Each of these statements will present investors and creditors with a summary of the firms financial performances. The balance sheet or statement of financial position reports the amounts of assets, liabilities, and stockholders equity at a specified moment, such as midnight of December 31; also known as the statement of financial position. The income statement or statement of financial performance reports revenues, expenses, gains, losses, and net income during the period of time stated in its heading; also known as the statement of operations. In addition, if asked by someone to get to the point; the term one may ask for is often referred to as the bottom line. The last or bottom line of the income statement will show the firms net income. The net income is a measure of the firms profitability during that period. In other cases, the income statement is also referred to as the profit and loss, or P&L statement better known as the firms earnings. The statement of cash flows utilizes the information from the income statement and balance sheet to Measures the cash generated from operations, not counting capital spending or working capital requirements. The statement of cash flows provides the most important out of the four financial statements related with financial management. (Valacich & Schneider, 2011) Retained earnings are another statement that is used is a financial statement that outlines the changes for a specific time. The statement of retained earnings reconciles changes in the retained earnings accounting during an accounting period. The statement begins with the beginning balance in the retained earnings account, and then adds or subtracts such items as profits and dividend payments to arrive at the ending retained earnings balance. The general calculation structure of the statement is: Beginning retained earnings + Net income - Dividends = Ending retained earnings. The statement of retained earnings is organized in accordance with generally accepted accounting principles (GAAP). This statement can also appear as a separate

LettPSKS7000-4 statement or as an inclusion on either a balance sheet or an income statement. Also, the statement of retained earnings can be known as a statement of owner's equity statement or statement of shareholders' equity. Networking Capital is a measurement of the operating liquidity available for a company to use in developing and growing its business. The working capital can be calculated very simply by subtracting a companys total current liabilities from its total current assets. (Valacich & Schneider, 2011)

LettPSKS7000-4 References Valacich, J.S., & Schneider, C. (2011). Information Systems Today, Managing in the Digital World, (4th Ed), In Pearson Learning Solutions (Ed.), SKS 7000 Executive concepts in business strategy [VitalSource Bookshelf electronic version for Northcentral University]. Retrieved from http://online.vitalsource.com/books/9780558870638 (Original work published 2003)