The retained earning statement reports changes in the interest of the company and retained interest in profits or surplus. This statement typically contains profits and losses, dividends, and issuance of stock. This report is given to the board of directors for a company, issued during a press release, or during a quarterly report earnings statement. The balance sheet tracks the assets, liabilities, and stockholders equity. The assets on the sheet are company holdings.
It is the responsibility of the company’s management team to make sure that these analyses are conducted to see where they stand from a financial standpoint. Within the ratio analysis, I studied the components of Urban Outfitters balance sheets, income statements, and statements of cash flow. Here I was able to analyze the proportion certain accounts in regards to other accounts. I was also able to look at the growth pattern of the account to determine forecast for the following years. When comparing financial ratios of the time period of 2008-2009, a percent of change in current assets of 44% which was a dramatic increase from 2008.
This provides some information that will be used to develop the pro forma statements. The pro forma statements will allow Bisi’s company to determine some financial information about the proposed project. This balance sheet indicates what the future year’s obligations will be in relative to the available resources. It is imperative that the company have sufficient amount to be able to pay this obligations when they are due. The pro forma also tells the project estimated profitability for future years.
Under this act, companies would be required to include an annual internal control report of management stating the following: a) Management’s responsibilities for establishing and maintaining adequate internal controls and procedures for financial reporting for the company b) Management’s conclusions about the effectiveness of the company’s internal controls and procedures for financial reporting as of the end of the company’s most recent fiscal year c) That the company’s registered public accounting firm has attested to, and reported on, management’s evaluation of the company’s internal controls and procedures for financial reporting. 2. Inherent security and control risk issues organizations face within virtual corporate environments and E-commerce business today. 3. Large corporate spending on information technology has demanded that there be a quantifiable approach to view not only a return on the corporation’s investment, but also assurance the products and services the company is paying for are performing and producing as intended.
These are important to the investors who are looking at the company but also to managers. Exercise 7-2: Answer the following questions about the statement of cash flow and the statement of retained earnings. 1. The current month’s net cash provided by operations is $34,936.57 2. The year-to-date’s net cash provided by operations is $4,717.37 3.
Types of financial sources There are two types of financial sources available for a business: * Internal sources * External sources In addition, they are categorized into short, medium and long term sources of finance: * Short-term: must be paid back within a year. * Medium-term: must be paid back within 5-7 years. * Long-term: can be paid back over many years. Further we going to look into the wide range of financial resources available for Tesco company. Internal: Internal sources of finance is money which is readily obtainable within the company.
Budget Variance Analysis Budgets are made according to the best estimates that managers and budget committees can come up with (Finkler, Kovner, & Jones, 2007). If the health care organization encounters unexpected events, the organization can spend amounts greater than or less than what is allocated by the budget. This paper aims to discuss the steps in the development of an operating budget, budget variances, and their possible causes as well as benchmarking techniques that can minimize these variances. Budget Development According to Finkler, Kovner, and Jones (2007), unit managers and department managers create budgets for their particular areas. They look ahead to what they will need and anticipate their expenses for the upcoming fiscal year.
Section 404 of the Sarbanes-Oxley Act directs the SEC to adopt rules requiring annual reports of companies with publicly traded securities, other than registered investment companies, to disclose management’s assessment of the effectiveness of the company’s ICFR and an auditor’s independent attestation to the effectiveness of those internal controls. These rules were adopted by the Commission on May 27, 2003. The act gave large filers that are traded publicly till the end of the fiscal year in 2004 to become compliant. Internal controls are in place to require reporting of financial reports to be analyzed and audited. Companies are also hiring internal personnel to ensure accuracy and high ethical standards are being followed.
This is because when taxes are increased a smaller amount of income is retained giving people the incentive to declare lower incomes to the HMRC so that they fall into a lower tax bracket. Moreover people may take incomes as a share option. This is because capital gains tax is at a flat rate of 18% therefore much lower that income tax allowing people to retain more of their incomes and enjoy better living standards. This will result in a reduction in the government’s tax revenue as people are paying less tax, which will lead to further increases in the deficits. Secondly high taxes create disincentives to work and this can be analysed through income and substitution effects.
GASB and FASB Similarities GASB and FASB accounting are sets of objectives that proprietorship, government, and not-for-profit organizations follow in preparing financial statements. According to Weygandt (2008, p. 17) “both the GASB and the FASB have established objectives that circumscribe the functions of financial reports.” GASB and FASB objectives show whether a company is making enough profit to pay for expenses throughout the year, allows investors information to decide whether to invest or not, and how well the company budget complied throughout the year. Also, the two accounting standard boards show whether management is complying with all aspects of the objectives. GASB and FASB accounting have differences that individuals need knowledge about to prepare financial statements for government and not-for-profit organizations. GASB and FASB Differences Accountants and individuals, who work in accounting fields, need to know the differences between GASB and FASB.