Principles of Accounting - Project

Principles of Accounting - Project

Student Name

Corporation Name : BMW Group : Group and subgroups

BMW Group is an international manufacturer of automobiles and motorcycles that contemplates in producing high-class standards and quality for all the bands BMW , Rolls-Royce and MINI targeting the entire probable segment in the market

For the year 2005 and 2006 , the corporate financial statements of the BMW Group are going to be studied and reviewed . Doing these steps would enable the outside users including individuals and organizations such as potential investors and creditors to examine and analyze

the standing of the company and its stability in terms of its monetary value (1 ) A current asset reports the value of all assets that are projected to be converted into cash within the course of the business operation This consists of cash in bank , cash on hand , account receivables inventory , marketable securities , prepaid expenses and other liquid assets that are readily convertible to cash . Based on the Balance Sheet of the BMW Group as of December 31 (See Table 2 of Appendix A , the current assets of the BMW Group for 2005 amounted to 27 ,010 euro and for 2006 , it amounted to 28 ,543 euro

A current liability , on the other hand , is the debts and obligation of the company , which are outstanding within a year . Current liability like current asset is reflected on the balance sheet of the company 's financial statements and it comprise short termed debt , accounts payable , accrued liabilities and other debts . The current provisions and liabilities of the BMW Group for 2005 is amounted to 28 ,084 euro and it went up to 28 ,555 in the following recent year , 2006 (See also Table 2 of Appendix A

Furthermore , the working capital or also known as the company 's equity is the determination of the efficiency and health of the company Working capital Current Assets - Current Liabilities . For 2005 , it is of Appendix A . Moreover , it is important to compute for the current ratio to determine whether the company such as the BMW Group has enough resources to pay the current liabilities over the next twelve months Current ratio is calculated using the formula : Current Ratio Current Assets / Current Liabilities . The BMW Group has current ratio of 0 .96176 for 2005 and 0 .99958 for 2006 . Based on this information , the short-termed liquidity of the BMW Group provides enough margin of safety against uncertainty and random fluctuations and to cover up the current liabilities of the company knowing the amount of current asset that the BMW Group had . BMW Group was certified with an extraordinarily sound solvency for the debt with a maturity of more than one year (2 ) The net earnings or the net profit can be quantified when the cost and expenses that the company accumulated is reduced in the revenue . The BMW Group has net earnings for the year 2005 of 2 , 239 euro and 2 ,874 euro for the year 2006 (See Table 1 of Appendix A . On the...