Two Assignment so be completed

BUS 637 Week 4 - Discussion Forum 2

Guided Response: Respond to at least two of your fellow students’ or instructor posts in a substantive manner and provide information or concepts that they may not have considered. Each response should have a minimum of 100 words and be respectful of others’ opinions and beliefs that differ from your own. Support your position by using information from the week’s readings. You are encouraged to post your required replies earlier in the week to promote more meaningful and interactive discourse in this discussion forum. Continue to monitor the discussion forum until Day 7 and respond with robust dialogue to anyone who replies to your initial post.

There are two of my classmate’s discussion that is on this document. I need to respond to each one. Lisa Schreiner and Elyse Dinome Please follow the instruction above and make it as detailed as possible.

Lisa Schreiner

MondayOct 12 at 6:30am

Manage Discussion Entry

An organization’s balance sheet provides data investors use to analyze a company’s strength under consideration for funding. Figures found on the balance sheet calculate ratios indicating the business’s liquidity, financing ability, debt obligations, and quick ratios. The balance sheet in the discussion indicates the organization funding occurs through financing and equity. The financing portion relates to long-term debt or a loan on the balance sheet, and the equity portion is in the common stock line in the shareholder’s equity section (Glackin & Mariotti, 2020). Common stock are shares of ownership in the company issued and sold to investors for a price, raising capital. In return, investors receive dividend payments on a quarterly or annual basis, as the business earns a profit.

Risks exist in every daily task. Assessing this entrepreneur’s risk in funding strategy through the debt-to-equity ratio method is appropriate. The ratio indicates if the organization carries enough equity to cover its long-term debt payments by dividing long-term debt by total shareholder’s equity ($1.264M/$2.141M = .59). The results of .59 means that for every $1.00 of equity, $0.59 applies to long-term debt. At this point in time, the organization presents a low risk of its inability to pay debt obligations. One can conclude the business’s financing based on the composition of the organization’s capital primarily consists of loans secured with retained earnings building from net income year over year.

References

Glackin, C., & Mariotti, S. (2020). Entrepreneurship: Starting and operating a small business (5th ed.). Pearson.

Elyse Dinome

YesterdayOct 15 at 11:45am

Manage Discussion Entry

Finances are obviously the most important part of creating and sustaining a company. Without money coming in, there is little to no way to be sustainable in any environment. When looking for investors, or just looking into the financial state of your company, analyzing a balance sheet can be a make or break for any large decisions that an investor or you, the owner. Looking at this balance sheet, quickly you can notice that majority of the company is owned by its shareholders. This can be looked at as good or bad, but I would personally not prefer it this way. It gives you, as the owner, a little less flexibility because shareholders have a say in many of the decisions that are made because they technically own a portion of the company (Glackin & Mariotti, 2020).

After reviewing this balance sheet further, I think that it is safe to say that the balance between assets current assets and current liabilities is fair. When looking at their debt to equity ratio, 1.264M/2.141M=0.59. This means that for every $1.00 of equity, $0.59 goes towards long-term debt. This shows that they are at lower risk and can pay off their debts. Depending on the company and type of business certain debt to equity ratios are better than others, but I’d say in this case it is a very good thing to be at .59.

Reference

Glackin, C., & Mariotti, S. (2020). Entrepreneurship: Starting and operating a small business (5th ed.). Pearson.