(WebFinance, Inc, 2013) Simplified it is the process of evaluating the current business, let’s say their effectiveness, and their future in their industry. Why is it so important? Financial statement analysis involves the carful select of data from various financial statements, such as the one that we will be referring to in this report. The data from the reports is used primarily to forecast the financial health of the business [in this case Competition Bikes]. When analyzed it makes it easier for c-level executives and management to make future decisions.
Financial Statement Paper P Agnes Pierre Louis ACC/280 September 26, 2011 Minh Truong Financial Statement Paper In today’s business world it is required to keep an accurate account for assets and liabilities of each company. Good and ethical accounting practices can build the base for a strong and profitable company if the information is used properly. The definition of accounting is obvious but one most know the purpose of accounting which will be covered in the following paragraphs. There are four financial statements that are prepared by companies in today’s society as a form of reporting accounting companies. Those statements are income statement, retained earnings statement, balance sheet, and statement of cash flows.
Full disclosure requires that publicly traded businesses use accrual based accounting and revenues are recognized as sales are earned. Full disclosure also requires that footnotes describe accounting procedures and provide details for unusual transactions. With companies such as Enron and WorldCom, the accounting field has an increased need for businesses to tell the truth in its financial statements. Full disclosure acts as the obligation for businesses to be truthful in its statements in order to protect the parties
ALL WK 1, DQ’s: WK 1, DQ 1: What is a business’s obligation to build an ethical culture and balance its desire for profit with ethical responsibilities to employees, customers, society, and the environment? Ethics is different from one person to the next, so it is imperative that business clearly define the norm for staff members and management. The decisions organizations make influence more than business partners, affiliates, culture, and others. It is important for organizations center of attention on maximizing shareholder revenue. Therefore, maximizing profit without causing destruction to the business culture can be a balancing act for most organizations.
Mini Case a. Corporate finance is important to all managers because it helps them identify and use strategies and projects that add worth to their firm. It also helps forecast funding requirements and formulate strategies for obtaining those funds. b. Organizational forms of business a.
When investors or shareholders are demanding the business to produce profit, managers must consider how to devise steps for transparency in their strategic plans to report factual business dealings. This consideration is parallel in up keeping high ethical and social responsibilities standards in their strategic planning process. Rules of disclosure and frequency of
EST1 Task 310.2.1-05: Ethical Situations in Business Western Governors University February 2, 2013 EST1 Task 310.2.1-05: Ethical Situations in Business Companies have four levels of social responsibility: 1) economic, 2) legal, 3) ethical, and 4) philanthropic. A company has to balance its duty to shareholders to make a profit with its contract with society to make socially responsible decisions. In order to increase profit, a company must understand the needs of the stakeholders and develop a coordinated plan which establishes standards within the company that can be understood and accepted by all employees; as well as supporting the needs of the community it serves. Company Q has supported the need to improve profit by closing two unprofitable stores. However, an analysis should be made regarding the need to close those stores.
They influence and impact the business because the business may need money for it to keep running. The owners/shareholders provide the money that may be needed. The capital that is provided by the shareholders will pay for everything to keep the business up and running, this means that they will be paying for the costs to start up the business. This may include the salaries of the cleaners, the employees, the rent of the shop, the electric and utility bills Etc. They should be kept well informed of the financial state of the organisation, so as to encourage them to keep investing in the company.
Riordan Virtual Organization Riordan is a company looking at all the areas of business. Starting with a strategic plan and the significance of having one, to accountability of social and ethical concerns. Having a strong knowledgeable employee base increases the moral and the security of the company both in the United States and Internationally. Providing the proper financial documentation discloses how the company is doing. Conducting key measurement guidelines to ensure they are on track with production and budget.
2. Reliability: With moral principles clients are able to rely more on the Accountants. The nature of the work carried out by accountants and auditors requires a high level of ethics. Shareholders, potential shareholders, and other users of the financial statements rely heavily on the yearly financial statements of a company as they can use this information to make an informed decision about investment. They rely on the opinion of the accountants who prepared the statements, as well as the auditors that verified it, to present a true and fair view of the company.