CHURCHILL DOWN

Churchill down Financial Statement

Churchill down Financial Statement

Introduction

The main purpose of this paper is to look at the financial position of Churchill Downs Inc. and make an analysis on the components of its cash and cash equivalents. Churchill Downs acts as the proprietor and operates the pari-mutuel wagering properties and businesses. Company is classifies into four sections: Racing operations, which is comprised of Calder race course, Churchill downs racetrack, Fairground race course, Arlington park racecourse (EASC 2005). The second section is an online business, which is comprised of a horseracing television channel, Twin spires, and equity investment in HRTV, LLC, and Bloodstock research information services. The third section is gamin which is comprised of fairground slots, Calder casino, and other investments like Churchill Downs Simulcast productions. The fourth one is LLC, which works as a facilitator of television production and provides services to the racing industry.

Components of the Organization's Cash and Cash Equivalents

This section discusses the components of Churchill Downs cash and cash equivalents. The cash and cash equivalent of Churchill hills consists of unrestricted cash (this is the cash in hand or any bank balance which can easily be withdrawn for use). The estimated equivalent cash of the company is $1.7 million as reported in the income statement of the company. There are no other assets and liabilities on company's account subject to the fair value (Accounting Standards Board 2005).

Churchill Downs uses the investments having maturities less than three months in order to make it cash equivalent. Company has kept this cash in reserves of federally insured limits. The main components of Churchill Downs cash and equivalent cash are unrestricted cash, demand deposits, short-term investments and other maturities. The purpose of holding cash equivalents is to meet cash obligations in the short term and not make any investment or for other purposes. In order to make an investment easily convertible to cash, it is necessary that it should be very easily transferable into a specific cash amount and should possess irrelevant change risk in values. This is the reason why, an investment can be considered equivalent to cash only when the investment are of three months or less than three months maturity. Cash equivalents do not include equity investments inside it, until and unless it is equal to cash.

Bank loan is also included in the financing activities. This is different in some countries, as some countries make the repayments if bank overdrafts on demands. These overdrafts are an essential part of cash management of any Churchill Down. Thus, for Churchill Down, these overdrafts are key components of cash and cash equivalents. One of the main key factors to be kept in consideration is its fluctuation from debtor to creditor (Accounting Standards Board 2005).

Cash flows do not include the fluctuations between those items, comprising cash or cash equivalents. The reason behind is, that these components are an essential tool of cash management of any organization and not it's operating, investing or financing (EASC ...