Accounting In Society Essay

explanatory Essay

860 words

The Role of Accounting on Business and Our Society Financial statements are formal records that represent the financial activities of any business entity. Financial records are used to calculate the performance, financial strength and liquidity of a company. There are four basic types of financial statements: 1. Statements of financial position also known as Balance sheet. Balance sheets are used to report the financial position (assets, liabilities, and stockholder’s equity) of a business at a given date. 2. Income statements also called Profit and Loss statements (statement of earnings, income, or operations). These statements are used to report the company’s net profit or loss over a specified financial period. It is arrived by deducting the company’s expenses from the company’s total income. 3. Cash Flow Statement. This statement gives a summary of movement in cash and bank balances over a given financial period – cash within the company. 4. Statement of Retained Earnings also known as Statement of Shareholder’s Equity. This type of statement is used to give details of the owner’s equity movement over a given financial period – the way the net income and distribution of dividends affected the company’s financial position. The most effective financial statement in communicating the financial health of an organization is the Statement of changes in equity. This statement sums up the profit and loss earned during the financial period and the effect, additional investments that was made or disinvestment, how profit was distributed in the business and correction of errors made in the prior period (Peterson & Fabozzi, 1999). The user of this financial period can be able to immediately learn the effects of the business operations ... ... middle of paper ... ...There is less room for errors in when using automated accounting programs. The overall advantage of automating accounting processes is efficiency. Internal control includes all activities and processes that control or prevent risks and fraud. Types of internal control measures that can be used in the service industry are: 1. Segregation of duties:-This is done by giving the roles of authorization, custody and record keeping to different people reducing the chances of error or fraud by one person. 2. Supervision and monitoring of operations: - In this control process ongoing operational activities are keenly observed and reviewed. This ensures effectiveness and efficiency of operational activities (Harrer, 2008). 3. I T controls: - IT can be used to ensure that access to data and systems is restricted to authorized personnel only by using access logs and passwords.

In this essay, the author

Explains that financial statements are formal records that represent the financial activities of any business entity. they are used to calculate the performance, financial strength and liquidity of a company.
Explains that balance sheets are used to report the financial position (assets, liabilities, and stockholder’s equity) of a business.
Explains income statements, also called profit and loss statements (statement of earnings, income, or operations), are used to report the company's net profit or loss over a specified financial period.

Explains that financial statements are formal records that represent the financial activities of any business entity. they are used to calculate the performance, financial strength and liquidity of a company.
Explains that balance sheets are used to report the financial position (assets, liabilities, and stockholder’s equity) of a business.
Explains income statements, also called profit and loss statements (statement of earnings, income, or operations), are used to report the company's net profit or loss over a specified financial period.
Explains the cash flow statement, which gives a summary of movement in cash and bank balances over the given financial period – cash within the company.
Explains that segregation of duties reduces the chances of error or fraud by one person.
Explains how the supervision and monitoring of operations ensures effectiveness and efficiency of operational activities.
Explains that it can be used to ensure that access to data and systems is restricted to authorized personnel only through access logs and passwords.
Explains that the most effective financial statement in communicating the financial health of an organization is the statement of changes in equity.
Explains the main function of an accountant is to ensure the company’s financial events are collected accurately and appropriately recorded and financial reports generated.
Explains that a service company is easier to start and manage compared to merchandise business. a company's chart of accounts should include accounts that give information as to where cash is coming from and where it is going
Explains that accounting programs automate functions such as invoicing, payments, paying salaries and wages, and provide regular accounting reports. the overall advantage of automating accounting processes is efficiency.

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Understanding Financial Statements and Cash Flow
explanatory essay
Everyone wants to be successful. Most people measure success on the basis money. The world operates its daily activities around money, whether it is from the perspective of an individual providing for their family or the perspective of a chief executive officer managing a high profile business. Everyone’s goal is to be a success. In the corporate world of big business, success is always measured based on the bottom line comparing company profitability from one year to the next in comparison to its competitors. The only tool to accurately measure the bottom line of a corporation’s financial standing is through the use of financial statements. Understanding financial statements can be overwhelming. There are four basic financial statements: a balance sheet, an income statement, a statement of retained earnings, and a statement of cash flow (The Four Basic). Each of these four statements is broken down into smaller detail representing the inflow and outflow of financial transa...
In this essay, the author
- Explains that an entrepreneur's dream of starting a business is all about getting an idea to the marketplace with great expectations of striking it rich.
- Explains that success is measured based on the bottom line comparing company profitability from one year to the next in comparison to its competitors.
- Explains the purpose of the balance sheet, which is to show the financial position or value for a particular period of time.
- Explains that an entrepreneur's dream of starting a business is all about getting an idea to the marketplace with great expectations of striking it rich.
- Explains that success is measured based on the bottom line comparing company profitability from one year to the next in comparison to its competitors.
- Explains the purpose of the balance sheet, which is to show the financial position or value for a particular period of time.
- Explains that a company's assets are items of value to the company that are both tangible and non-tangible used to provide products or services for sale.
- Lists the company's liabilities on the balance sheet based on their due dates. they are broken down into current and long-term liabilities.
- Explains the shareholders' equity section of the balance sheet known as the company's capital or net worth. the shareholders' portion is their investment in purchased stock minus incurred costs to run the business.
- Explains that the balance sheet shows a snapshot shot of the company's assets minus liabilities and shareholders' equity. the assets column on the right side must equal the liabilities.
- Explains that the second financial statement is the income statement, which takes into account revenue, cash inflow, minus expenditures to operate the business, and cash outflow to determine the company's net worth.
- Explains that the third financial statement used among businesses is the statement of retained earnings. the purpose of this statement is to show shareholders the company's ability to reinvest for future growth in the market.
- Explains that the statement of cash flow summarizes the amount of money flowing in and out of a company.
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comparative essay
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In this essay, the author
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- Explains that apple's annual financial report is a useful tool for assessing the financial situation of an enterprise, for comparison with other competitors.
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Financial Statement Analysis Essay
comparative essay
Financial statements are formal reports which show the current financial position of an entity. There are three main types of financial statements; the balance sheet, the income statement and the cash flow statement (Business Dictionary, 2016). Financial statement analysis refers to the analysis and interpretation of those three main financial statements. It can also be defined as understanding the risk and profitability of an entity (Ready Ratios, 2013). There are different techniques of financial statement analysis including ratio analysis, vertical or common size analysis and horizontal analysis or trend analysis. Another technique sometimes applied is trend analysis of the ratio analysis (Hancock, Robinson and Bazley, 2015).
In this essay, the author
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- Explains that the roa ratio measures how effectively a company can earn return on its investment in assets.
- Explains that financial statements are formal reports which show the current financial position of an entity. there are different techniques of financial statement analysis including ratio analysis, vertical or common size analysis and horizontal analysis.
- Explains that the ceo of cardno is michael renshaw and the chairman is john marlay. the following table details their qualifications and remuneration.
- Explains that the roa ratio measures how effectively a company can earn return on its investment in assets.
- Explains that financial statements are formal reports which show the current financial position of an entity. there are different techniques of financial statement analysis including ratio analysis, vertical or common size analysis and horizontal analysis.
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- Explains that cardno has eight directors on the board, all of whom have academic qualifications. the ratio of cash to non-cash ceo remuneration is 699360:0.
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Ratio Analysis Essay
explanatory essay
Financial statements are those statements which provide information about profitability and financial position of a business. It includes two statements, i.e., profit & loss a/c or income statement and bal...
In this essay, the author
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- Explains that secondary data refers to the information or facts already collected.
- Explains that with the help of the ratio, one can locate the weak spot or problem of a company.
- Explains the objective of the project is to analyze our indian steel sector for investment purpose by monitoring growth rate and performance on the basis of historical data.
- Explains that secondary data refers to the information or facts already collected.
- Defines ratio analysis as the systematic use of ratio to find a firm's strengths and weaknesses as well as its historical performance and current financial condition.
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Financial Analysis
explanatory essay
Financial statements are vital for any organization regardless of the size or method of ownership. The financial statements of an organization include the balance sheet, the income statement, the statements of owners’ equity and the statement of cash flows. The reports provided by financial statements are necessary for internal and external use. Ratios for analysis and comparison measure an organization’s performance (Holt, 2014, p. 22) and are prepared using the information from the financial reports. Financial analysis judges an organization’s history and collects information to project its future (Holt, 2014, p. 25). To examine the ongoing profitability of an organization, pro forma financial statements are prepared.
In this essay, the author
- Explains that financial statements are vital for any organization regardless of its size or method of ownership. ratios for analysis and comparison measure an organization’s performance and are prepared using the information from the financial reports.
- Explains that capital investments increase firm's assets by providing returns for a period greater than one year. capital budgeting evaluates capital investment proposals and uses qualitative and quantitative analysis.
- Explains that capital budgeting is necessary when considering mergers or acquisitions. acquisitions occur when one organization absorbs another and adds value to the acquiring organization.
- Explains that financial statements are vital for any organization regardless of its size or method of ownership. ratios for analysis and comparison measure an organization’s performance and are prepared using the information from the financial reports.
- Explains that capital investments increase firm's assets by providing returns for a period greater than one year. capital budgeting evaluates capital investment proposals and uses qualitative and quantitative analysis.
- Explains that capital budgeting is necessary when considering mergers or acquisitions. acquisitions occur when one organization absorbs another and adds value to the acquiring organization.
- Explains that a financial manager determines the financial needs and efficiency of the organization to raise the capital necessary to remain viable.
- Explains that financial managers must understand corporate finance and forecast and prepare pro forma financial statements. the desire for riches leads to temptation and these harmful desires ruin men.
- Explains fackler, m. (ed. ), 500 questions & answers from the bible. barbour publishing, inc.
- Explains that ross, s. a., westerfield, r. w. & jordan, b. d. (2011). essentials of corporate finance.
- Explains that pro forma financial statements are essential for internal and external groups to use in planning, operating, investing, and financing decisions.
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comparative essay
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In this essay, the author
- Explains that the paper will discuss the information found in the financial statements such as balance sheet, income statement, statement of cash flows, and statements of stockholders' equity.
- Explains that planning, controlling, and decision-making should begin with setting objectives and determining how to accomplish them. controlling includes gathering feedback to guarantee that the arrangement is legitimately executed.
- Explains that the balance sheet is one of the major financial statements used by accountants and business owners.
- Explains that the paper will discuss the information found in the financial statements such as balance sheet, income statement, statement of cash flows, and statements of stockholders' equity.
- Explains that planning, controlling, and decision-making should begin with setting objectives and determining how to accomplish them. controlling includes gathering feedback to guarantee that the arrangement is legitimately executed.
- Explains that the balance sheet is one of the major financial statements used by accountants and business owners.
- Concludes that using financial statements in managerial accounting helps with the planning, controlling, and decision making process of a company.
- Explains that planning is the correspondence of an organization's objectives. budgets recognize the sources or inflows of financial stakes, and the usage of fiscal holdings.
- Explains that forecasting begins with certain assumptions dependent upon the management's experience, learning, and judgment. the method of affectability examination relegates qualities to unverifiable components variables.
- Explains that variance analysis investigates the underlying drivers of a material change in management accounting. managerial accountants are prone to discover the genuine cost or real amount of materials utilized.
- Explains that accounting ratios are utilized to portray the relationship between accounting information. they are figured using solid, accurate fiscal data.
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How to Perform Basic Financial Analysis
explanatory essay
In contrast to the balance sheet, the income statement provides information about a company's performance over a certain period of time. Although it does not reveal much about the company's current financial condition, it does provide indications of its future viability. The main elements of the income statement are revenues earned, expenses incurred, and net profit or loss.
In this essay, the author
- Explains that the balance sheet outlines the financial and physical resources that a company has available for business activities in the future, and makes no judgment about how well they will be used by management.
- Explains the main elements of the balance sheet are assets and liabilities. assets include both current assets (cash or equivalents that will be converted to cash within one year) and noncurrent assets.
- Explains that the balance sheet includes two categories of liabilities: current liabilities and long-term debts. liabilities are important to financial analysts because businesses have the same obligation to pay bills regularly as individuals.
- Explains that the balance sheet outlines the financial and physical resources that a company has available for business activities in the future, and makes no judgment about how well they will be used by management.
- Explains the main elements of the balance sheet are assets and liabilities. assets include both current assets (cash or equivalents that will be converted to cash within one year) and noncurrent assets.
- Explains that the balance sheet includes two categories of liabilities: current liabilities and long-term debts. liabilities are important to financial analysts because businesses have the same obligation to pay bills regularly as individuals.
- Explains that the balance sheet includes stock-holders' equity accounts, which detail the permanent capital of the business. the more equity a business holds, the better its ability to borrow additional funds.
- Explains that the income statement provides information about a company's performance over time. revenues, expenses, and net profit or loss are the main elements.
- Explains that a company's over-all financial health can be assessed by examining three major factors: its liquidity, leverage, and profitability.
- Explains that liquidity refers to a company's ability to pay its current bills and expenses. all small businesses require liquidity, though start-ups and young companies are often not very liquid.
- Explains that companies run into problems with liquidity because cash outflows are not flexible, while income is uncertain. creditors expect their money when promised, but the cash generated does not follow a set schedule.
- Explains that leverage refers to the proportion of a company's capital that has been contributed by investors as compared to creditors.
- Explains that many measures of profitability involve calculating the financial return that the company earns on the money that has been invested.
- Explains that financial ratios are determined by dividing one number by another and are usually expressed as a percentage. they enable business owners to examine the relationships between seemingly unrelated items and gain useful information for decision-making.
- Explains that there are over 150 recognized financial ratios that can be computed in a financial analysis. however, small business owners and managers only need to be concerned with small sets to identify where improvements are needed.
- Explains that kristy and diamond recommend using current, quick, and liquidity ratios to assess a company's liquidity.
- Defines the quick ratio as quick assets (cash, marketable securities, and receivables) / current liabilities. the liquidity ratio eliminates all current assets except cash from the calculation of liquidity.
- Explains that kristy and diamond recommend using the debt/equity ratio, which indicates the relative mix of the company's investor-supplied capital.
- Explains that kristy and diamond recommend using the return on equity (roe) ratio to measure a company's level of profitability.
- Concludes that financial analysis can be an important tool for small business owners and managers to measure their progress toward reaching company goals and competing with larger companies within an industry.
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The Importance Of Leadership In An Organization
explanatory essay
Financial controls can be useful to figure out performance problems or if the organization is on sound financial footing. Financial statements provide information used for financial control of an organization. There are two major financial statements, a balance sheet and an income statement. A balance sheet shows an organization’s financial position with keeping in mind assets and liabilities at a specific point in time. An income statement sums up a firm’s financial performance for a given time interval. The income statement shows revenues coming into the organization from all sources and subtracts all expenses, such as: goods sold, interest, taxes, and depreciation. A manager’s knowledge of their financial state can help them manage their employees more effectively and be able to see what needs to be done to create more revenue, which is the ultimate goal in business, making a
In this essay, the author
- Explains that the four functions of management are the key to an organization's overall success. a manager must possess and demonstrate these four principles effectively to produce an effective organization or business.
- Explains the three common organizational structures: horizontal, departmental, and vertical. organizational change is defined as an adoption of a new idea or behavior in an organization.
- Explains leadership is the ability to influence people toward the attainment of organizational goals. there are four different types of leadership: level 5, servant, authentic, and interactive.
- Explains that the four functions of management are the key to an organization's overall success. a manager must possess and demonstrate these four principles effectively to produce an effective organization or business.
- Explains the three common organizational structures: horizontal, departmental, and vertical. organizational change is defined as an adoption of a new idea or behavior in an organization.
- Explains leadership is the ability to influence people toward the attainment of organizational goals. there are four different types of leadership: level 5, servant, authentic, and interactive.
- Explains how the balanced scorecard balances traditional financial measures with operational measures relating to a company's critical success factors.
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Analyze Your Personal Finance Paper
explanatory essay
Cash flow: The cash flow statement shows in details the sources and uses of cash and classifying them from operating, investing or financing activities. It is useful as it shows how well one is creating liquidity as well as net income. Examples of cash flows may include receiving repayment of money loaned out, repaying money borrowed or using money to buy or sell an asset.
In this essay, the author
- Explains that accounting is a set of concepts and techniques that are used to measure and report financial information about an economic unit.
- Explains the three products of accounting and bookkeeping procedures that are most useful in personal financial planning: income statement, cash flow and balance sheet.
- Explains that the cash flow statement shows the sources and uses of cash and classifies them from operating, investing, or financing activities.
- Explains that accounting is a set of concepts and techniques that are used to measure and report financial information about an economic unit.
- Explains the three products of accounting and bookkeeping procedures that are most useful in personal financial planning: income statement, cash flow and balance sheet.
- Explains that the cash flow statement shows the sources and uses of cash and classifies them from operating, investing, or financing activities.
- Explains the balance sheet, which is a snapshot of what one has and owes. it lists all assets, liabilities, and equity or net worth, with their values.
- Explains that personal finance software is designed to make the record-keeping aspect of personal finances easy as much as possible. they produce summary reports (income statement, cash flow statements, and balance sheets).
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Financial Analysis Of The EV, Ew And EQR
analytical essay
• Accounting (financial) statements for a period of several years. The statements include the balance sheet and profit and loss account, in addition, cash flow statement, capital and the annex to the financial balance.
In this essay, the author
- Explains that the better the company's financial position, the less risky and profitable investments there are in it. good investment attractiveness is an important condition for the expansion of the investor base.
- Explains that the eqr model has the lowest ratio in every iteration, a constant of one.
- Opines that the eqr approach is the best approach to minimize variance but spread the risk of the portfolio equally across constituents.
- Explains that the better the company's financial position, the less risky and profitable investments there are in it. good investment attractiveness is an important condition for the expansion of the investor base.
- Explains that the eqr model has the lowest ratio in every iteration, a constant of one.
- Opines that the eqr approach is the best approach to minimize variance but spread the risk of the portfolio equally across constituents.
- Analyzes the forecast prices for the shares of the company and similar companies in connection with the trends in the stock market as a whole.
- Explains that to evaluate investment attractiveness, it is required to possess high quality information about the company, which can be obtained from various sources.
- Explains accounting statements for several years, including the balance sheet, profit and loss account, cash flow statement, capital and the annex to the financial balance.
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Essay On Accounting Equation
explanatory essay
Each type of financial statement has their own objectives and purposes. Below has shown the purposes of each financial statement:
In this essay, the author
- Explains that the accounting equation maintains for all transactions and business activities. every asset that a company hold is always equal to the liabilities and equity.
- Explains that assets are the resources for running the business work. assets are divided into two categories: non-current assets and current assets.
- Explains that liabilities are debts owed by a company to solve the business problem. non-current and current liabilities can be divided into two categories.
- Explains that the accounting equation maintains for all transactions and business activities. every asset that a company hold is always equal to the liabilities and equity.
- Explains that assets are the resources for running the business work. assets are divided into two categories: non-current assets and current assets.
- Explains that liabilities are debts owed by a company to solve the business problem. non-current and current liabilities can be divided into two categories.
- Explains that equity is the resources that are provided by the owner for the business use.
- Explains that revenue is the income earned by a business that will increase the asset while expenses are expenditure pay by business.
- Explains the importance of making a profit in business because it confirms the truth of your business powerfully.
- Explains that business can calculate their profit using the equation profit = revenue – expenses. business must calculate business revenue and expenses to get their final amount of business profit.
- Explains that profit varies greatly from company to company or industry to industry, so it is always better to consider profit as a percentage of sale when comparing companies.
- Explains that the higher the profit represents the successful of the business while the lower will represent the weak. the accounting cycle records business transactions during the accounting period.
- Explains that the first step to start the accounting cycle is systematizing and analyzing the transaction or data from the economic events.
- Explains the steps of recording the adjusting entries and trial balance, which are used to record the accrual basis of accounting such as devaluation, depletion and amortization.
- Explains that the post-closing trial balance is the end of accounting cycle and it will start again with the first step in the next accounting period.
- Explains that there are two types of account information, which are internal users and external users. management, employee, and owner use the accounting information to make decisions for planning and controlling business activities.
- Explains that external users are people who didn't involve in the organization and business activities but interested in financial information and the performance of the company.
- Explains the purpose of each type of financial statement. the financial statements provide accounting information about financial position, profit or loss, changes in equity, and cash flows.
- Explains that the statement of financial position shows the current assets, liabilities, and equity owned by a business during an accounting period.
- Explains that the statement of cash flows provides information about the gross receipts and gross payments of a company. it reports the cash generated and used during the operations, investing and financing activities.
- Explains that the statement of changes in equity allows financial statement readers to figure out the factors that cause a change in owners' equity in the accounting periods.
- Concludes that 5 of them have completed the assignment for the subject abfa 1013 introduction to accounting. they learnt through the research that they did, that the accounting statement is not only done for taxation but prepared for business owners or shareholders to make an economic decision in different situations.
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Accounting: Accounting And Accounting
explanatory essay
Balance sheet-: Balance sheet is a statement at the book value of all of the assets and liabilities of a business or other organization present a particular date such as the end of the financial year. It is known as a balance sheet because it reflection accounting identity the components of the balance sheets. The balance sheet must follow the following formula:
In this essay, the author
- Explains that the accounting equation tells us that law assets, liabilities of a company is measured by these three only like accounting for corporation is assets equal to liabilities and stockholders.
- Explains that equity is the ownership interest in a business firm. an owner cannot own 100% of the business shares ownership with others and accounting for business should be separate from personal affairs of its own.
- Explains revenue and the cost period in accounting that the company get income from normal business activities.
- Explains that the accounting equation tells us that law assets, liabilities of a company is measured by these three only like accounting for corporation is assets equal to liabilities and stockholders.
- Explains that equity is the ownership interest in a business firm. an owner cannot own 100% of the business shares ownership with others and accounting for business should be separate from personal affairs of its own.
- Explains revenue and the cost period in accounting that the company get income from normal business activities.
- Explains that the asset of a business that owner own are called assets for example building, machinery, etc.
- Explains that liabilities are the depth to be payee by a person or company to bank or other company.
- Explains that expenses are the cost occurred during manufacturing or preparing or on anything of the product unit it is sold out.
- Explains that dividend is that which shareholders earn like the companies profit equally divided into all the shareholders.
- Explains that non-current assets are like the depths that aren't profitable within one accounting year, like purchases, ling term loans, and noncurrent liabilities.
- Explains that it is a non-cash expense that reduces the value of assets of passing of time. assets lose their value by times and need to be replaced.
- Explains that formal entities are used to record revenue expenses that are consumed by selling products but not yet paid or received. it is important to know the correct financial statement.
- Explains the expenses that are paid in advance. these are the current assets of a business, such as rent, tax, and insurance.
- Explains that relevance is information that impacts decision-making, while timely information has predictive value.
- Explains that financial statements should be understandable by persons with reasonable information or knowledge of business, economic, activities.
- Explains that reliable information is reliable if the user can rely on to be accurate physically. large errors or omissions in the financial statement reduce the reliability of the information contained in them.
- Explains that financial statements must be comparable with each other according to the time period. users have to give the meaningful conclusion about the trend in an entity’s financial performance and position over time.
- Explains that information is material, its mission or measurement could influence the economic decision of users on the basic of the financial statements. materiality is also linked closely other accounting concept and principle.
- Explains that an income statement measures a company's financial performance over an accounting period. a balance sheet reflects accounting identity the components of the balance sheets.
- Explains that equity is an owner interest in a company which is obtained by total assets and liabilities. revenue is the amount of money that includes discount and deduction.
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Financial Statements
opinion essay
Financial statements are the primary instruments used in assessing the performance of a business and its managers (Gibson , 2013). In order to make well informed decisions, interested parties must be able to assume that a company’s financial statements are an accurate representation of its performance. Financial statements are used by customers, employees, governments, investors, lenders, and suppliers to influence numerous types of transactions. Investors can use financial statements to determine a company’s value as an investment. Governments can use financial statements to determine a company’s tax liability. Lenders and suppliers can use financial statements for determine a company’s creditworthiness. Good decisions rely on accurate financial reporting.
In this essay, the author
- Opines that deceptive accounting practices undermine the stability of u.s. financial markets and can make people less willing to invest in stocks.
- Explains that financial statements are the primary instruments used in assessing the performance of a business and its managers.
- Explains that earnings management is an unethical practice that affects reported income and provides no true economic advantage to the organization. financial reporting must be ethical and moral.
- Opines that deceptive accounting practices undermine the stability of u.s. financial markets and can make people less willing to invest in stocks.
- Explains that financial statements are the primary instruments used in assessing the performance of a business and its managers.
- Explains that earnings management is an unethical practice that affects reported income and provides no true economic advantage to the organization. financial reporting must be ethical and moral.
- Opines that ethical accounting practices should never be circumvented. enron used creative accounting methods to defraud stakeholders out of millions of dollars.
- Opines that it is imperative that a publicly traded company's financial statements reflect its true state. greed can drive individuals to take risks with others' money, and only those with the highest moral fortitude should have governance over the finances.
- Analyzes how managers favored manipulating short-term earnings by utilizing overtime as opposed to offering extended credit terms.
- Explains gibson, c. h., gowthorpe, & amat, o. (2005). creative accounting: some ethical issues of macro- and micro-manipulation.
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Kotak Mahindra Annual Report Analysis
explanatory essay
Financial statements provide an overview of a business' financial condition in both short and long term. They help in understanding the past performance of the company and making future predictions about the company. It thus helps us to look beyond the profit figures.
In this essay, the author
- Explains that financial statements provide an overview of a business' financial condition in both short and long term. they help in understanding the past performance of the company and making future predictions.
- Explains the purpose of an income statement, also called a profit and loss statement (p&l), to show managers and investors whether the company made or lost money during the period being reported
- Explains that the term "top line" refers to the total revenues or sales mentioned in the income statement.
- Explains that financial statements provide an overview of a business' financial condition in both short and long term. they help in understanding the past performance of the company and making future predictions.
- Explains the purpose of an income statement, also called a profit and loss statement (p&l), to show managers and investors whether the company made or lost money during the period being reported
- Explains that the term "top line" refers to the total revenues or sales mentioned in the income statement.
- Explains that the "bottom line" is the net profit that is calculated after subtracting the expenses from revenue. it represents the profit for the year attributable to shareholders.
- Explains that there has been a significant increase in the profits in 2008 as compared to 2007. the expenses have increased, but the income has also increased.
- Explains trend analysis calculates the percentage change for one account over a period of time of two years or more.
- Explains how it calculates the percentage change for all accounts by taking one account's figures as the base.
- Explains that the company is purchasing fixed assets on a conservative basis and is concentrating more on its savings and investments.
- Explains the statement of cash flows as an analytical tool that helps determine the short-term viability of a company.
- Compares the company's net cash inflow from operating activities in 2007 and its cash outflow in 2008, which shows it has made more purchases of fixed assets and invested less.
- Defines ratio analysis as the study and interpretation of relationships between various financial variables, by investors or lenders. it is used for comparing a company's financial performance to the market in general.
- Explains that financial statements provide information about the financial position, performance, and changes in an enterprise that is useful to a wide range of users in making economic decisions.
- Explains that a balance sheet or statement of financial position is an overview of the company's balances. assets, liabilities and ownership equity are listed at the end of its financial year.
- Explains current ratio, which measures the ratio of current assets to current liabilities. return on net worth measures return relative to investment in the company.
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