FINANCIAL ACCOUNTING

CASE STUDY 1: FINANCIAL STATEMENTS

Visit Unilever Pakistan Limiteds Home page: www.unilever.pk From Unilevers home page, access the most recent annual report of Unilever Pakistan Foods Limited (see Investors Centre link in About us and Financials). Instructions: From the Balance Sheet, Income Statement, Statement of Cash Flows, Notes to the Financial Statements, answer the following questions: 1. In reviewing the Companys Balance Sheet: a. What are the largest assets included in the companys balance sheet? Why would a company of this type (size and industry) have a large investment in the particular type of asset? b. Identify the accounts most likely to have been involved in the end-ofyear adjusting entry process. 2. In reviewing the Companys Statement of Cash Flows: a. What are the Primary Sources and Uses of Cash from Investing Activities? b. Did the Investing Activities cause the Companys Cash to Increase or Decrease? c. What are the Primary Sources and Uses of Cash from Financing Activities? d. Did the Financing Activities cause the Companys Cash to Increase or Decrease? 3. In reviewing the Companys Income Statement, did the Company have a Net Income or a Net Loss for the most year? What Percentage of total revenues was the Net Income or Loss? 4. Select three items in the notes accompanying the financial statements and explain briefly the importance of these items to people making decisions about investing in or extending credit to this Company. 5. Assume that you are a lender and this Company has asked to borrow an amount of Cash equal to 10 percent of Total Assets, to be paid in 90 days. Would you consider this Company to be a good Credit Risk? Explain.

MSFA 122 Financial Accounting Isra University, Fall 2013