Interpreting the Financial Statements of Newport News, Virginia's Public School System
The Newport News Public School System of Virginia provides its stakeholders with a complete annual report, including the Government-Wide Financial Statements, the Fund Financial Statements, the Fiduciary Fund Financial Statements , and all of the appropriate supporting documentation. Supplementary information includes a Budgetary Comparison Schedule for the General Fund, a Schedule of Funding Progress for the Public Employee Retirement System, and reports on other government school-related activities.
The fiscal year starts on July 1 and ends June 30. This coincides with the end of the school year. Since there is less activity during the summer months, the school system would choose this date to allow time to assemble the data and use it to project the budget for the coming year. Also, by this time they will have a solid count for most of the grades on the number of teachers, both standard and special-education, that will be required for the following year.
The statement of cash flows is the single most useful statement in analyzing the performance of the company. It combines information from the balance sheet, income statement, and statement of retained earnings. It also breaks income down to help the user determine how income was earned. For example, if the company shows an increase in income but a decrease in inventory, both of which can be determined from the statement of cash flows, this is not an increase in profitability but a liquidation of an asset. Finally, it is more common for a business to file bankruptcy due to a lack of cash than it is from accounting losses.
According to the report of management (page 5), the School System finished a new elementary school building in 2004. This would mean the closing of a construction fund and a transfer of the assets and loans to the buildings fund. This fund probably owes m...