Financial Statements
|
|
- Phillip Ramsey
- 8 years ago
- Views:
Transcription
1 Financial Statements The financial information forms the basis of financial planning, analysis & decision making for an organization or an individual. Financial information is needed to predict, compare & evaluate the firm s earning ability. All these financial information is contained in the financial statements. The three most important financial statements at our disposal are: Balance Sheet Profit & Loss Account Statement (Income statement) Cash flow statement 1. Balance Sheets: A balance sheet is the most significant financial statement & it indicates the financial condition or the state of affairs of a business at a particular point of time. It provides detailed information about a company s assets, liabilities and shareholders equity. (1) Assets are things that a company owns that have value. This typically means they can either be sold or used by the company to make products or provide services that can be sold. Assets include physical property, such as plants, trucks, equipment and inventory. It also includes things that can t be touched (intangible) but nevertheless exist and have value, such as trademarks, goodwill and patents. The money claims i.e. the receivables & stock also is a part of company s asset. And cash itself is an asset. So are investments a company makes. Assets can further be classified as fixed and current assets. Current assets sometimes referred to as liquid assets are those resources which are held in the form of cash or can easily be converted into cash within an accounting period (one year).these include cash, tradable securities, account receivables, stock of raw material, work in progress & finished goods. Fixed assets these are long term in nature & held for more than an accounting period. The tangible fixed assets include land, building, machinery, equipment, furniture etc. The tangible assets depreciate over a period of their life time. The intangible fixed assets represent the firm s rights & include patents, franchises, goodwill, trademark, copyright etc. These are amortised over a period of time. (2) Liabilities are amounts of money that a company owes to others. This can include all kinds of obligations, like money borrowed from a bank to launch a new product, rent for use of a building, money owed to suppliers for materials, payroll a company owes to its employees, environmental cleanup costs,
2 or taxes owed to the government. Liabilities also include obligations to provide goods or services to customers in the future. Liabilities are further classified as current & long term liabilities. Current liabilities are the debts which are repayable within an accounting period. These include creditors, bills payable, banks overdraft, outstanding expenses & income received in advance. Current assets are converted into cash to pay the current liabilities. Long term liabilities are the obligations payable in a period more than an accounting year. These include bonds, debentures and secured loans from financial institutions (3) Shareholders equity is residual in nature. It is arrived at after deducting the liabilities from the assets. It is sometimes called capital or net worth. It s the money that would be left if a company sold all of its assets and paid off all of its liabilities. This leftover money belongs to the shareholders, or the owners, of the company. It comprises of two parts: Paid up Share capital Reserves & Surplus or Retained earnings Paid up capital is the amount of funds directly contributed by the shareholders through the purchase of shares. Reserves & Surplus is the undistributed profits. From this some amount can be distributed to the share holders as dividends when the company makes profit. Analyzing a balance sheet: A typical balance sheet has two main divisions viz: (1) Sources of funds: The liability part (2) Application of funds: The asset part The Source of funds part thus shows the share capital, the reserves & surplus & other debt components like loans taken. The Reserves & Surplus amount in the balance sheet is equal to the Profit after Tax (PAT) of the P&L account. Share capital plus Reserves & Surplus is equal to the Net worth of the company or the shareholders fund or the owners fund. Application of funds includes fixed assets, current assets & Investments.
3 Thus in the balance sheet the total value reflecting under the head sources of funds should be same as that under the head application of funds. Note: There can be a component called as contingent liability which is not actually included in the balance sheet because it may arise only when some event occurs. 2. Profit & Loss Account / Income Statement: Balance sheet is considered as a very significant statement by bankers & lenders as it gives the solvency & the liquidity position of an organization. However, the creditors, particularly the bankers & financial analysts in India have started paying more attention to firm s earning capacity as a measure of its financial strengths. Thus there arises a need of studying the P&L account or the income statement. In contrast to the balance sheet which gives information of the business as on a particular day, P&L gives the information of the business over a period of time. Profit & Loss account presents the summary of revenues, expenses & net income of a firm. Revenue is the amount earned by the company in exchange of the products/services provided to the customers. In order to earn these revenues, there are a lot of operational expenses involved. Thus there is a matching Revenues & expenses carried out over a period of time. This matching is done for an accounting period (normally a year). This matching is known as the matching concept. A firm is said to be profitable if its revenues exceed the expenses made in the process of providing the customer with the products/services. The revenues can of two types namely the operating revenue & the non operating revenue. The revenues arising from the main operation of the business are the operating revenues. For example: Total receipts from the sale of the manufactured goods by a firm. The revenues which are incidental or indirect to the main operations of the firm are non operating revenues. Eg: Receipts from the sale of equipments, Interest & dividend earned from temporary business is said to a non operating one. Expenses incurred in generating non operating revenues are called the non operating expenses Understanding the P&L: The P&L statement consists of all the revenues & expenses that the business incurs in an accounting period. Thus the topmost line of the P&L is the Sales; from the sales all the expenses the company comes across are subtracted. These expenses are operational in nature i.e the expenses incurred in the
4 course of manufacturing. These can be the raw material cost, rent of the workshop or manufacturing unit, wages rolled out to the employees, costs of researching new products and the electricity bill. After the mentioned deductions, depreciation is deducted to obtain Profit before interest & tax (PBIT). From PBIT, further there is a deduction of Interest & then the income tax. The residual value is called the Profit after tax (PAT). This quantity actually signifies whether the company actually earned or lost during the accounting period. The value obtained in the PAT field is what goes to the Reserves & Surplus of the balance sheet, 3. Cash flow Statement: A cash flow provides an investor insight into a company's credit worthiness and overall financial health. While for a company the cash flow is one of the major components for budgeting efforts and future planning. Cash flow statements report a company s inflows and outflows of cash. This is important because a company needs to have enough cash on hand to pay its expenses and purchase assets. While an income statement can tell you whether a company made a profit, a cash flow statement can tell you whether the company generated cash. The cash flow statement shows the changes over a period of time. The result obtained at the last line of the cash flow shows the net increase or decrease in the cash flow of the company. The cash flow statement is divided into 3 parts, namely: (1) Operating cash flow (2) Cash flow from Financing (3) Cash flow from Investment (1) Operating Cash flow: Operating activities represents the incoming and outgoing cash activities to run the day-to-day operation of a business. The net cash flow from operating activities represents the monies made from the sales of products and services. These include receipts from goods sold and tax payments. The operating activities is the most critical component of the cash flow statement, because it shows if a company is able to turn a profit based on its current business model at this exact moment in time. If a company is unable to turn a profit from their business activities, odds are the company will be experiencing finance issues and or making investments in hardware or software without any proof of success. In India, dividend is considered as an operating cash flow.
5 (2) Cash flow from Financing: Financing cash flow is related to money in and out to investors and shareholders. When a company raises funds from bonds or stock, this is considered cash in. The interest expense is considered as a financing cash flow. (3) Cash flow from Investment: Investment activities represent the cash flow from the purchase of long term assets required to make or sell goods and services. Investment activities also include purchases of stocks or other securities. A major issue that potential investors have with the investing activities section is that the money listed here represents activities paid for in cash. So, if a company were to purchase $5 million dollars worth of equipment with only $1 million cash and $4 million in financing, only the $1 million will show up under investing activities. Cash flow Statement preparation: - Increase in the account receivable is to be added. - Increase in inventory is to be subtracted. - Decrease in prepaid expenses is to be added since there is a saving by virtue of lesser prepaid expense - Increase in account payable is to be added since there is more of cash in hand. - Increase in salary payable is to be added - Increase in Income tax payable is to be added. After all the addition subtraction operations, the final result obtained would be either Cash flow from operations or cash flow from financing or cash flow from investment as may be the available inputs & situation.
CASH FLOW STATEMENT. MODULE - 6A Analysis of Financial Statements. Cash Flow Statement. Notes
MODULE - 6A Cash Flow Statement 30 CASH FLOW STATEMENT In the previous lesson, you have learnt various types of analysis of financial statements and its tools such as comparative statements, common size
More informationAccounts Payable are the total amounts your business owes its suppliers for goods and services purchased.
Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Receivable are the total amounts customers owe your business for goods or services sold
More informationFinancial Statements Tutorial
Financial Statement Review: Financial Statements Tutorial There are four major financial statements used to communicate information to external users (creditors, investors, suppliers, etc.) - 1. Balance
More informationSTATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS
C H A P T E R 1 0 STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS I N T R O D U C T I O N Historically, profit-oriented businesses have used the accrual basis of accounting in which the income statement,
More informationRatio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability
A) Liquidity Ratio : - Ratio Analysis 1) Current ratio = Current asset Current Liability 2) Quick ratio or Acid Test ratio = Quick Asset Quick liability Quick Asset = Current Asset Stock Quick Liability
More informationChapter 002 Financial Statements, Taxes and Cash Flow
Multiple Choice Questions 1. The financial statement summarizing the value of a firm's equity on a particular date is the: a. income statement. B. balance sheet. c. statement of cash flows. d. cash flow
More informationACC 255 FINAL EXAM REVIEW PACKET (NEW MATERIAL)
Page 1 ACC 255 FINAL EXAM REVIEW PACKET (NEW MATERIAL) Complete these sample exam problems/objective questions and check your answers with the solutions at the end of the review file and identify where
More informationFinancial Statement Analysis: An Introduction
Financial Statement Analysis: An Introduction 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Scope of Financial Statement Analysis... 3 3. Major
More informationYou have learnt about the financial statements
Analysis of Financial Statements 4 You have learnt about the financial statements (Income Statement and Balance Sheet) of companies. Basically, these are summarised financial reports which provide the
More informationPreparing a Successful Financial Plan
Topic 9 Preparing a Successful Financial Plan LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Describe the overview of accounting methods; 2. Prepare the three major financial statements
More informationCH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS
C H 2 3, P a g e 1 CH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS (note from Dr. N: I have deleted questions for you to omit, but did not renumber the remaining questions) 1. The primary purpose of
More informationLearning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information.
0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting
More informationGuide to Financial Ratios Analysis A Step by Step Guide to Balance Sheet and Profit and Loss Statement Analysis
Guide to Financial Ratios Analysis A Step by Step Guide to Balance Sheet and Profit and Loss Statement Analysis By BizMove Management Training Institute Other free books by BizMove that may interest you:
More informationEXERCISES. The cash from operating activities detail is provided as follows for class discussion:
EXERCISES Ex. 14 1 There were net additions, such as depreciation and amortization of intangible assets of $389 million, to the net loss reported on the income statement to convert the net loss from the
More informationGuide to Financial Statements Study Guide
Guide to Financial Statements Study Guide Overview (Topic 1) Three major financial statements: The Income Statement The Balance Sheet The Cash Flow Statement Objectives: Explain the underlying equation
More informationIpx!up!hfu!uif Dsfeju!zpv!Eftfswf
Ipx!up!hfu!uif Dsfeju!zpv!Eftfswf Credit is the lifeblood of South Louisiana business, especially for the smaller firm. It helps the small business owner get started, obtain equipment, build inventory,
More informationUnderstanding A Firm s Financial Statements
CHAPTER OUTLINE Spotlight: J&S Construction Company (http://www.jsconstruction.com) 1 The Lemonade Kids Financial statement (accounting statements) reports of a firm s financial performance and resources,
More informationReport Description. Business Counts. Top 10 States (by Business Counts) Page 1 of 16
5-Year County-Level Financial Profile Industry Report Architectural Services (SIC Code: 8712) in Prince George County, Maryland Sales Range: $500,000 - $999,999 Date: 11/07/08 Report Description This 5-Year
More informationUnderstanding Cash Flow Statements
Understanding Cash Flow Statements 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Components and Format of the Cash Flow Statement... 3 3. The
More informationSTATEMENT OF CHANGES IN FINANCIAL POSITION
Home Page - Statement of Changes in Financial Position STATEMENT OF CHANGES IN FINANCIAL POSITION by Dr. J. Herbert Smith/ACOA Chair Technology Management and Entrepreneurship Faculty of Engineering University
More informationE2-2: Identifying Financing, Investing and Operating Transactions?
E2-2: Identifying Financing, Investing and Operating Transactions? Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing or operating
More informationChapter 14. 1 Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Chapter 14 1 Identify the purposes of the statement of cash flows Distinguish among operating, investing, and financing cash flows Prepare the statement of cash flows by the indirect method Identify noncash
More informationIn this chapter, we build on the basic knowledge of how businesses
03-Seidman.qxd 5/15/04 11:52 AM Page 41 3 An Introduction to Business Financial Statements In this chapter, we build on the basic knowledge of how businesses are financed by looking at how firms organize
More informationReporting and Analyzing Cash Flows QUESTIONS
Chapter 12 Reporting and Analyzing Cash Flows QUESTIONS 1. The purpose of the cash flow statement is to report all major cash receipts (inflows) and cash payments (outflows) during a period. It helps users
More informationCash is King. cash flow is less likely to be affected
Reading 27: Understanding Cash Flow Statements Relevance of Cash Flow The primary purpose of the statement of cash flows (SCF) is to provide: Info about a firm s cash receipts & cash payments during an
More informationCASH FLOW STATEMENT (AND FINANCIAL STATEMENT)
CASH FLOW STATEMENT (AND FINANCIAL STATEMENT) - At the most fundamental level, firms do two different things: (i) They generate cash (ii) They spend it. Cash is generated by selling a product, an asset
More informationChapter 21 The Statement of Cash Flows Revisited
Chapter 21 The Statement of Cash Flows Revisited AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments,
More informationINTERNATIONAL ACCOUNTING STANDARDS. CIE Guidance for teachers of. 7110 Principles of Accounts and. 0452 Accounting
www.xtremepapers.com INTERNATIONAL ACCOUNTING STANDARDS CIE Guidance for teachers of 7110 Principles of Accounts and 0452 Accounting 1 CONTENTS Introduction...3 Use of this document... 3 Users of financial
More informationThe Trading Profit and Loss Account
The Trading Profit and Loss Account Businesses usually calculate their profit level by creating a Trading Profit and Loss Account (TPL) The TPL is produced because: It is a legal requirement It summarises
More informationPreparing Financial Statements
Preparing Financial Statements Understanding financial statements is essential to the success of a small business. They can be used as a roadmap to steer you in the right direction and help you avoid costly
More informationBusiness Plan. In completing the following proposal provide as much detailed information as possible.
Business Plan A business plan is an integral part of a financing request. It is an introduction to your business, and it provides us with the initial information that we require to start to an application.
More informationCOUNCIL FOR THE INDIAN SCHOOL CERTIFICATE EXAMINATIONS P-35,36, Sector VI, Pushp Vihar, New Delhi-110017 NEW DELHI ISC ACCOUNTS
COUNCIL FOR THE INDIAN SCHOOL CERTIFICATE EXAMINATIONS P-35,36, Sector VI, Pushp Vihar, New Delhi-110017 NEW DELHI ISC ACCOUNTS Guidelines pertaining to Revised Schedule VI of Part I & II of Companies
More informationhow to prepare a cash flow statement
business builder 4 how to prepare a cash flow statement zions business resource center zions business resource center 2 how to prepare a cash flow statement A cash flow statement is important to your business
More informationFINANCIAL STATEMENTS ANALYSIS - AN INTRODUCTION
27 FINANCIAL STATEMENTS ANALYSIS - AN INTRODUCTION You have already learnt about the preparation of financial statements i.e. Balance Sheet and Trading and Profit and Loss Account in the module titled
More informationHow To Balance Sheet
Page 1 of 6 Balance Sheet Accounts The Chart of Accounts is normally arranged or grouped by the Major Types of Accounts. The Balance Sheet Accounts (Assets, Liabilities, & Equity) are presented first,
More informationChapter. Statement of Cash Flows For Single Company
Chapter 4 Statement of Cash Flows For Single Company 4.1 Single company statement of cash flows Statement of cash flows are primary financial statements and are required along side the income statement
More informationThis week its Accounting and Beyond
This week its Accounting and Beyond Monday Morning Session Introduction/Accounting Cycle Afternoon Session Tuesday The Balance Sheet Wednesday The Income Statement The Cash Flow Statement Thursday Tools
More informationSection A: Questions On Fill In The Blanks
Section A : 26 FILL IN THE BLANK Section B : 10 TRUE OR FALSE QUESTIONS Section C : 11 Multiple Choice Questions Section A: Questions Fill In The Blanks the right column please insert the items from which
More informationCOMPONENTS OF THE STATEMENT OF CASH FLOWS
ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling
More informationChapter 2 Balance sheets - what a company owns and what it owes
Chapter 2 Balance sheets - what a company owns and what it owes SharePad is packed full of useful financial data. This data holds the key to understanding the financial health and value of any company
More informationChapter 1. Introduction to Accounting and Business
1 Chapter 1 Introduction to Accounting and Business Learning Objective 1 Describe the nature of a business, the role of accounting, and ethics in business. Nature of Business and Accounting A business
More informationAccounting Self Study Guide for Staff of Micro Finance Institutions
Accounting Self Study Guide for Staff of Micro Finance Institutions LESSON 2 The Balance Sheet OBJECTIVES The purpose of this lesson is to introduce the Balance Sheet and explain its components: Assets,
More informationCHAPTER 23. Statement of Cash Flows 1, 2, 7, 8, 12 3, 4, 5, 6, 16, 17, 19 9, 20 4, 5, 9, 10, 11 10, 13, 15, 16. 7. Worksheet adjustments.
CHAPTER 23 Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Format, objectives purpose, and source of statement.
More informationSOLUTIONS. Learning Goal 15
Learning Goal 15: Prepare a Classified S1 Learning Goal 15 Multiple Choice 1. b 2. c 3. a 4. b 5. d 6. a 7. c Their importance in paying current liabilities is the main reason current assets are shown
More information6. Financial Planning. Break-even. Operating and Financial Leverage.
6. Financial Planning. Break-even. Operating and Financial Leverage. Financial planning primarily involves anticipating the impact of operating, investment and financial decisions on the firm s future
More informationInternational Financial Accounting (IFA)
International Financial Accounting (IFA) Preparation and presentation of Financial Statements DEPARTMENT OF BUSINESS AND LAW ROBERTO DI PIETRA SIENA, NOVEMBER 4, 2013 1 INTERNATIONAL FINANCIAL ACCOUNTING
More informationChapter 6 Statement of Cash Flows
Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions
More informationCASH FLOW STATEMENT. On the statement, cash flows are segregated based on source:
CASH FLOW STATEMENT On the statement, cash flows are segregated based on source: Operating activities: involve the cash effects of transactions that enter into the determination of net income. Investing
More informationRAPID REVIEW Chapter Content
RAPID REVIEW BASIC ACCOUNTING EQUATION (Chapter 2) INVENTORY (Chapters 5 and 6) Basic Equation Assets Owner s Equity Expanded Owner s Owner s Assets Equation = Liabilities Capital Drawing Revenues Debit
More informationBalance Sheet. 15.501/516 Accounting Spring 2004. Professor S.Roychowdhury. Sloan School of Management Massachusetts Institute of Technology
Balance Sheet 15.501/516 Accounting Spring 2004 Professor S.Roychowdhury Sloan School of Management Massachusetts Institute of Technology Feb 09, 2003 1 Some residual administrative matters Access web
More informationThe Basic Framework of Budgeting
Master Budgeting 1 The Basic Framework of Budgeting A budget is a detailed quantitative plan for acquiring and using financial and other resources over a specified forthcoming time period. 1. The act of
More informationConstruction Economics & Finance. Module 6. Lecture-1
Construction Economics & Finance Module 6 Lecture-1 Financial management: Financial management involves planning, allocation and control of financial resources of a company. Financial management is essential
More informationA Simple Model. Introduction to Financial Statements
Introduction to Financial Statements NOTES TO ACCOMPANY VIDEOS These notes are intended to supplement the videos on ASimpleModel.com. They are not to be used as stand alone study aids, and are not written
More informationCoimisiún na Scrúduithe Stáit State Examinations Commission. Leaving Certificate 2014. Marking Scheme. Accounting. Higher Level
Coimisiún na Scrúduithe Stáit State Examinations Commission Leaving Certificate 2014 Marking Scheme Accounting Higher Level Note to teachers and students on the use of published marking schemes Marking
More informationAccounts payable Money which you owe to an individual or business for goods or services that have been received but not yet paid for.
A Account A record of a business transaction. A contract arrangement, written or unwritten, to purchase and take delivery with payment to be made later as arranged. Accounts payable Money which you owe
More informationFinancial Ratios and Quality Indicators
Financial Ratios and Quality Indicators From U.S. Small Business Administration Online Women's Business Center If you monitor the ratios on a regular basis you'll gain insight into how effectively you
More informationMidterm Fall 2012 Solution
Midterm Fall 2012 Solution Instructions: 1) Answers for the multiple-choice questions must be recorded on the UW answer card. All other questions must be answered in the space provided on the examination
More informationConsolidated balance sheet
Consolidated balance sheet Non current assets 31/12/2009 31/12/2008 (*) 01/01/2008 (*) Property, plant and equipment 1,352 1,350 1,144 Investment property 7 11 11 Fixed assets held under concessions 13,089
More informationUnderstanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements
Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements In the United States, businesses generally present financial information in the form of financial statements
More informationThe Nature of Accounting Systems
Basic Accounting & Budgeting February 4, 2009 The Nature of Accounting Systems Accounting is the process of recording, classifying, summarizing, reporting and interpreting information about the economic
More informationStatement of Cash Flow
Management Accounting 337 Statement of Cash Flow Cash is obviously an important asset to all, both individually and in business. A shortage or lack of cash may mean an inability to purchase needed inventory
More informationFINANCIAL MANAGEMENT
STUDY MATERIAL:- FINANCIAL MANAGEMENT VERY SHORT QUESTIONS ( 1 MARK) 1 Define Financial Management. Ans financial management is that specialized activity which is responsible for obtaining and affectively
More informationCompany Financial Plan
Financial Modeling Templates http://spreadsheetml.com/finance/companyfinancialplan.shtml Copyright (c) 2009-2014, ConnectCode All Rights Reserved. ConnectCode accepts no responsibility for any adverse
More informationRELATE ACCOUNTS PRODUCTION
RELATE ACCOUNTS PRODUCTION GUIDE TO CASH FLOW STATEMENTS Contents SUPPORT SERVICES...3 COPYRIGHT...3 BACKROUND TO DOCUMENT...4 CUSTOMER SUPPORT... 4 IMPORTANT NOTICE... 4 HELP... 4 CASH FLOW STATEMENT...5
More informationUNDERSTANDING WHERE YOU STAND. A Simple Guide to Your Company s Financial Statements
UNDERSTANDING WHERE YOU STAND A Simple Guide to Your Company s Financial Statements Contents INTRODUCTION One statement cannot diagnose your company s financial health. Put several statements together
More informationFINANCIAL SKILLS FOR SMALL BUSINESS
FINANCIAL SKILLS FOR SMALL BUSINESS A PROGRAMME PROUDLY BROUGHT TO YOU BY INSTITUTE OF BANKERS IN SOUTH AFRICA P O Box 64120 Marshalltown 2107 BANK SETA Thornhill Office Park, Block No.15, 94 Bekker Road,
More informationRENAISSANCE ENTREPRENEURSHIP CENTER First Finance Class (FIN-1)
Finance 1 (FIN-1) RENAISSANCE ENTREPRENEURSHIP CENTER (FIN-1) Learning Outcomes At the conclusion of this class, you should: Know what will be covered in the six finance class sessions. Have reviewed some
More information> DO IT! Chapter 13. Classification of Cash Flows. Cash from Operating Activities D-1. Solution. Action Plan
Chapter 13 > DO IT! Classification of Cash Flows Identify the three types of activities used to report all cash inflows and outflows. Report as operating activities the cash effects of transactions that
More informationCHAPTER 4. Final Accounts
CHAPTER 4 Final Accounts Meaning Preparation of final account is the last stage of the accounting cycle. The basic objective of every concern maintaining the book of accounts is to find out the profit
More informationArticle Accounting Terminology
Article Accounting Terminology Contents Page 1. Accounting Period... 4 2. Accounts Payable (Sundry Creditors)... 4 3. Accounts Receivable (Sundry Debtors)... 4 4. Assets... 4 5. Benchmarks... 4 6. B.O.S.
More informationCASH FLOW STATEMENT & BALANCE SHEET GUIDE
CASH FLOW STATEMENT & BALANCE SHEET GUIDE The Agriculture Development Council requires the submission of a cash flow statement and balance sheet that provide annual financial projections for the business
More informationAccounting 500 4A Balance Sheet Page 1
Accounting 500 4A Balance Sheet Page 1 I. PURPOSE A. The Balance Sheet shows the financial position of the company at a specific point in time (a date) 1. This differs from the Income Statement which measures
More informationGROUP 1. BASIC FINANCING. 10. CAPITAL 100. Capital stock 103. Uncalled subscribed capital receivable 108. Treasury stock
GROUP 1. BASIC FINANCING 10. CAPITAL 100. Capital stock 103. Uncalled subscribed capital receivable 108. Treasury stock 11. RESERVES AND OTHER EQUITY INSTRUMENTS 110. Additional paid-in capital 111. Other
More informationGlossary of Accounting Terms Peter Baskerville
Glossary of Accounting Terms Peter Baskerville Account for or 'bring to account': An accounting phrase used to describe the recording of a financial transaction that is required under the generally accepted
More informationRatios and interpretation
Unit Ratios and interpretation As we learnt in our earlier studies, accounting information is used to answer two key questions about a business: Is it making a profit? Are its assets sufficient to meet
More informationAPPENDIX 1 The Statement of Financial Position
APPENDIX 1 The Statement of Financial Position 1. Assets: the resources of the organization which are used to provide service and generate value 2. Current assets: assets which can be converted to cash
More informationSETTING UP YOUR BUSINESS ACCOUNTING SYSTEM
100 Arbor Drive, Suite 108 Christiansburg, VA 24073 Voice: 540-381-9333 FAX: 540-381-8319 www.becpas.com Providing Professional Business Advisory & Consulting Services Douglas L. Johnston, II djohnston@becpas.com
More informationAccounting: Cash Flow Statement
IOSR Journal of Business and Management (IOSR-JBM) e-issn: 2278-487X. Volume 7, Issue 4 (Jan. - Feb. 2013), PP 109-116 Accounting: Cash Flow Statement Aghdas Jafari Motlagh Masters Accounting Student Islamicazad
More information3 Financial Analysis and Planning
3 Financial Analysis and Planning BASIC CONCEPTS AND FORMULAE 1. Financial Analysis and Planning Financial Analysis and Planning is carried out for the purpose of obtaining material and relevant information
More informationWhat is a business plan?
What is a business plan? A business plan is the presentation of an idea for a new business. When a person (or group) is planning to open a business, there is a great deal of research that must be done
More informationHow to Prepare a Cash Flow Statement
How to Prepare a Cash Flow Statement Peoples Bank Business Resource Center Business Builder 4 peoplesbancorp.com 800.374.6123 Table of Contents What to Expect... 4 What You Should Know Before Getting
More informationUNDERSTANDING FINANCIAL STATEMENTS
UNDERSTANDING FINANCIAL STATEMENTS ITEM 8 It is important that the directors of any business, cooperative or otherwise, understand the financial statements of the business. Without a basic understanding
More informationBACKGROUND KNOWLEDGE for Teachers and Students
Pathway: Business, Marketing, and Computer Education Lesson: BMM C6 4: Financial Statements and Reports Common Core State Standards for Mathematics: N.Q.2 Domain: Quantities Cluster: Reason quantitatively
More informationIGCSE Business Studies revision notes Finance Neil.elrick@tes.tp.edu.tw
IGCSE FINANCE REVISION NOTES Table of contents Table of contents... 2 SOURCES OF FINANCE... 3 CASH FLOW... 5 HOW TO CALCULATE THE CASH BALANCE... 5 HOW TO WORK OUT THE CASH AVAILABLE TO THE BUSINESS...
More informationFinancing Your Dream: A Presentation at the Youth Business Linkage Forum (#EAWY2014) Akin Oyebode Head SME Banking, Stanbic IBTC Bank, Nigeria.
Financing Your Dream: A Presentation at the Youth Business Linkage Forum (#EAWY2014) Akin Oyebode Head SME Banking, Stanbic IBTC Bank, Nigeria. Content 1 Introduction 2 Profit and loss Account or Income
More informationModule 2: Preparing for Capital Venture Financing Financial Forecasting Methods TABLE OF CONTENTS
Module 2: Preparing for Capital Venture Financing Financial Forecasting Methods Module 2: Preparing for Capital Venture Financing Financial Forecasting Methods 1.0 FINANCIAL FORECASTING METHODS 1.01 Introduction
More informationPaper 2 Accounting (Syllabus 2008)
Section A- FINANCIAL ACCOUNTING 1. Which of the following is not a Fixed Asset? (a) Building (b) Bank balance (c) Plant (d) Goodwill [Hints: (b) Fixed asset is an asset held with the intention of being
More informationUnderstanding Financial Statements. For Your Business
Understanding Financial Statements For Your Business Disclaimer The information provided is for informational purposes only, does not constitute legal advice or create an attorney-client relationship,
More informationGVEP Workshop Finance 101
GVEP Workshop Finance 101 Nairobi, January 2013 Agenda Introducing business finance Understanding financial statements Understanding cash flow LUNCH Reading and interpreting financial statements Evaluating
More informationAccounting and Reporting Policy FRS 102. Staff Education Note 1 Cash flow statements
Staff Education Note 1: Cash flow Statements Accounting and Reporting Policy FRS 102 Staff Education Note 1 Cash flow statements Disclaimer This Education Note has been prepared by FRC staff for the convenience
More informationSri Lanka Accounting Standard-LKAS 7. Statement of Cash Flows
Sri Lanka Accounting Standard-LKAS 7 Statement of Cash Flows CONTENTS SRI LANKA ACCOUNTING STANDARD-LKAS 7 STATEMENT OF CASH FLOWS paragraphs OBJECTIVE SCOPE 1 3 BENEFITS OF CASH FLOW INFORMATION 4 5 DEFINITIONS
More informationCHAPTER 14: THE ROLE OF ACCOUNTANTS AND ACCOUNTING INFORMATION
CHAPTER 14: THE ROLE OF ACCOUNTANTS AND ACCOUNTING INFORMATION I. What Is Accounting and Who Uses Accounting Information? Accounting is a comprehensive system for collecting, analyzing, and communicating
More information16 BUSINESS ACCOUNTING STANDARD CONSOLIDATED FINANCIAL STATEMENTS AND INVESTMENTS IN SUBSIDIARIES I. GENERAL PROVISIONS
APPROVED by Resolution No. 10 of 10 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 16 BUSINESS ACCOUNTING STANDARD CONSOLIDATED
More information2. Financial management:
2. Financial management: Meaning, scope and role, a brief study of functional areas of financial management. Introduction to various FM tools: ratio analysis, fund flow statement, cash flow statement.
More informationReturn on Equity has three ratio components. The three ratios that make up Return on Equity are:
Evaluating Financial Performance Chapter 1 Return on Equity Why Use Ratios? It has been said that you must measure what you expect to manage and accomplish. Without measurement, you have no reference to
More informationPreparing Agricultural Financial Statements
Preparing Agricultural Financial Statements Thoroughly understanding your business financial performance is critical for success in today s increasingly competitive agricultural environment. Accurate records
More informationJones Sample Accounts Limited. Company Registration Number: 04544332 (England and Wales) Report of the Directors and Unaudited Financial Statements
Company Registration Number: 04544332 (England and Wales) Report of the Directors and Unaudited Financial Statements Period of accounts Start date: 1st June 2008 End date: 31st May 2009 Contents of the
More informationIntroduction. What is a business?
1 Introduction to accounting By the end of this chapter you should be able to: define and classify businesses define accounting as a business activity state the main purpose of accounting list the qualities
More informationICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION
ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION OCTOBER 2006 Table of Contents 1. INTRODUCTION... 3 2. FINANCIAL RATIOS FOR COMPANIES (INDUSTRY - COMMERCE - SERVICES) 4 2.1 Profitability Ratios...4 2.2 Viability
More information