FINANCIAL REPORTING

Financial Reporting on the Internet (AMETEK, Inc.)

Financial Reporting on the Internet (AMETEK, Inc.)

Task 1 - Responsible Authority to Prepare Financial Statements

Analysis of the annual report 2012 shows that Ametek's management is responsible to prepare financial statements and related information to be presented in the annual report. Evidence can be collected from section 13 of the Securities Exchange Act of 1934, which is pursued by Ametek in preparing financial statements for FY 2012 (Ametek, 2012, p. i).

Task 2 - Importance to Follow GAPP

In accordance with New York Stock Exchange's requirements, Ametek is required to follow GAAP while preparing financial statements. It is a set of guidelines that helps Ametek to prevent manipulation or misrepresentation in the financial accounts. In addition to this, compliance with revenue recognition and cost principle requirement enables Ametek to communicate relevant financial and accounting information with the key stakeholders including investors, government agencies and shareholders (Ernst & Young, 2012, p. 13).

Task 3 - Analysis of Financial Performance

Items of Income Statement

2012 ($'000)

2011 ($'000)

Revenue

3,334.2 2,989.9

Operating Income

745.9 635.9

Net Income

459.1 384.5

Table 1: Income Statement Analysis (Ametek, 2012, p. 20)

Comparative analysis of the FY 2011 and FY 2012 shows that Ametek is growing over the years. Evidence can be collected from 11.52% change in the business revenue during FY 2012 (Ametek, 2012, p. 20). In addition to this, 19.40% increase in the net income indicates that the firm is profitable. During the given two FYs, the firm has expanded by posting 17.30% increase in the operating income of the business (Ametek, 2012, p. 20).

Figure 1: Trend of Financial Performance (Ametek, 2012, p. 20)

Analysis shows improving graph of the revenue turnover. Analysis of figure 2 shows that the trend of revenue from 2010-2012 has been favorable for Ametek, Inc.

Figure 2: Trend of Revenue (Ametek, 2012, p. 20)

Task 4 - Analysis of Financial Position

Items of Financial Position

2011

2012

Total Assets

4,319,490 5,190,056

Total Liabilities

2,266,685 2,654,905

Total (Owner's or Shareholder's) Equity

2,052,805 2,535,151

Table 2: Balance Sheet Analysis (Ametek, 2012, p. 20)

Analysis of the balance sheet items shows that the firm has expanded over the span of given two years (Ametek, 2012, p. 25). Yes, the accounting equation of balance sheet holds true for the firm because value of business assets is equal to the cumulative worth of liabilities and owners' equity i.e.:

Assets = Liabilities + Shareholders' Equity

In other words, the firm's asset value is equal to the capital sources of the business. Moreover, the firm has adopted classified format of reporting consolidated balance sheet. The evidence can be collected from the fact that the firm has subdivided assets into current and non-current categories and liabilities into current and long term categories (Ametek, 2012, p. 57).

Task 5 - Property, Plant and Equipment (PPE)

The term PPE refers to a balance sheet account, which denotes summative value of all business purchases regarding property, plant and equipment to the date of balance sheet (Warren, 2013, p. 25). On the other hand, PPE is identified as a long term business asset to be depreciated ...