Constructing Pro-Forma Statements (Heartland Express)

Constructing Pro-Forma Statements (Heartland Express) Term Paper example
High school
Term Paper
Finance & Accounting
Pages 10 (2510 words)
Download 0
The company under consideration is Heartland Express, a renowned name and a considered leader in the United States when it comes to transportation and logistics. Heartland Express has been in business for quite a long time, delivering exceptional services to its customers and enabling the companies to improve their support their logistics infrastructure. …

Introduction

The liquidity ratio measures the company’s ability to pay its short-term liabilities. The ratio illustrates that how quickly a company can convert its assets into cash and cash equivalent in order to pay off its short-term liabilities. The most commonly used liquidity ratio, the current ratio, which is calculated by comparing the current assets and current liabilities. The strengthened the current ratio the more ability the company has to pay its debts and short-term obligations over the next 12 months. An overall analysis of the ratio would portray that in all the years the company had enough assets to pay off its obligations and debts. In the financial year 2007, the current ratio decreases from 3.35 to 2.91 due to the decrease in the current assets of the company by a staggering 32% which majorly pertains to the decrease in the short term investment from 322 million to 186 million. The cause of the decrease in the current ratio for the financial year 2008 also pertains to the massive decrease in the short term investment. The reason for this decline is during that particular period, the equity shares market was going through its worst time. The companies rather than recording losses on market to market of these securities started selling these securities in the stock market. The acid test, which is also regarded as the quick ratio, is calculated by subtracting the inventory balance from the total current assert balance. Out of the current assets mentioned, inventories are regarded as the one which takes comparatively more time to be converted into cash or cash equivalent. The acid test ratio has followed the same trend as the current ratio. ...
Download paper
Not exactly what you need?

Related papers

Financial Statements Essay
Financial accuracy and transparency is necessary for them as they would base their decision depending on the reports of the financial statement. The accurate representation of the financial statement would motivate an investor to invest, banks to lend money and the government to calculate the right amount of tax for the company. It also benefits the company by spreading their good name and…
Financial Statements Paper
Assets include all the properties of an organization that have value such as inventory, plants, equipment and trucks. It also includes intangible things that have value like patents and trademarks. On the other hand, liabilities refer to the money owed to other entities including obligations such as bank loans, rent, suppliers’ payments and salaries among others. Shareholders’ equity refer to…
Financial Statements
The debt amount is recorded as accounts receivable in the company’s books of accounts. The inventory represents items that are being sold in the company’s stores. The inventory also includes unused office supplies, unused cleaning supplies, and other unused items that are owned by the company. The building account is another company asset. Since the company owns the building, the building is…
Financial statements
The documents that constitute the financial statements include the balance sheets, income statements, cash flow statements and the statements of shareholders’ equity (Sinha, 2007). There are some aspects of relationship between these financial records. The three financial records are used to show the financial situation of the company. First, a balance sheet is a financial statement that is used…
organization's financial statements
In this way, the success of financial analysis process is depended on the use of accurate information, as incorporated in financial statements of each organization. Due to its role in the development of effective organizational decisions, the financial analysis has been extensively explored in the literature. Emphasis has been given to the different missions that financial analysis can achieve, as…
Consolidation of Financial Statements
This paper seeks to analyze how the acquisition method compares with the earlier two methods in consolidation of financial statements, its impact on financial statement reporting quality, potential Impact on decision making and International implications of consolidation of financial statements. The paper also discussed the differences between the standards of IFRS and GAAP in respect of…
Financial statements paper
The financial statements must be published in the annual report of publicly traded companies. The four financial statements are the income statement, balance sheet, statement of retained earnings, and the statement of cash flow. The income statement is a financial report that measures the profitability of a company. The first number reflected in the income statement is the total sales or revenues.…