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Evaluate how cash flows and financial recordings systems can contribute to managing business finances?
Wiki User
∙ 13y ago
Advantages
· They give the owner of the business an idea of whether they are making even or not. This can give a vital indication to stop the business from going into liquidation.
· You can also use formulae which mean that you can when you enter new data the table automatically changes meaning that you don't need individually work each of the calculations.
· It gives you the ability to change the data into a table or graph which allows the manager to easily locate which problems there are in the business. For example, pie charts, bar charts and line charts. These will give the user a clearer idea of what the financial issues are and can be dealt with quicker.
Disadvantages
· The disadvantages of spreadsheets are that you would need to train your staff to use the excel program efficiently. Some aspects are difficult such as creating a formula; you would have to train your staff which would cost time and money.
Wiki User
∙ 13y ago
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Identify the objective of financial reporting?
There are many objectives to financial reporting. The following are just some of the many:Tax minimization - a privately owned business who doesn't necessarily care about the net income computed on their income statement would have the goal to minimize tax. Since their general purpose financial statements are filed with their tax return, they would want to minimize the amount of tax. (Thus their objective is to get their financial statements to show a low income to minimize the tax they pay.)Stewardship - Shareholders or stock holders who have invested in the business are not involved in the day to day operations of the business; thus they do not know how the business is doing, so they turn to the financial statement to assess the business standing.Management evaluation - Stakeholders often want to evaluate the performance of the people managing the business and does so by looking at the financial statement. Some manager's bonus are reflective of the financial statements as well.Performance evaluation - Similar to management evaluation, but in a broad sense, (potential) stakeholders want to evaluate the overall performance of the business to see if they should invest in the business or not.Cashflow prediction - Creditors will be interested in knowing if they should lend the business money. It helps them to estimate whether the business will be able to pay back the interest and principal on the loan. Also shareholders will be able to evaluate if the business will be able to pay out dividends.Monitoring contract compliance - Some terms and conditions of banks limit the actions that management can take often by financial statement numbers. For example the business may have to maintain a certain current ration, not pay over a certain amount in dividends, or not take out more loans.
What is an accountants role in non financial information?
A good Accountant would evaluate not only the financial information but also the non financial information that has an impact on business. An example of non financial information is for example customer feedback , response times , number of claims processed per quarter etc . These have an impact on business growth and profitability. The role is to have a skill to understand, evaluate and recommend a right course of action for the client or business by considering not just numbers but also the front side of business which is knowing their customer needs , demographics , taste of customer, ways to help customer get their products quickly , stimulate demand etc. Tesco's finance use relationship marketing by using non financial information and financial information through Tesco club cards. You collect points on buying and they collect raw data of purchase which is then linked to behaviour of buying pattern by customer type , location , age and social tastes etc.
What is the business transactions?
A business transaction is a financial event that changes the value in certain accounts and therefore affects the financial position of the business.
What are financial reports that summarize the financial condition and operations of a business?
Financial statements are financial reports which summarize the financial condition and operations of a business. Included in a financial statement are a balance sheet, income statement, and also a cash flow statement.
What financial and non financial measures are important to the business?
CEO performance
What Application of financial management in the business environment of Pakistan?
critically evaluate the application of financial management in the business environment of Pakistan
What is the purpose of underwriters in the financial business?
Underwriters in the financial business serve to evaluate financial information in order to assess whether or not a company should take certain financial risks. Underwriters are a sort of insurance for larger financial companies.
What is the role of an auditor in terms of the financial statement?
External Auditor has the role to materially evaluate the financial statements and provide his opinion that 'Does financial statements reflects true and fair activities of business' or not.
How do business enterprises contribute to economic growth?
Business enterprises contribute to economic growth by providing employment opportunities. This allows for more financial success and more money to flow into the economy.
Why is it important to separate operating assets from financial assets?
Operating assets contribute to the day to day functions of the business. While financial assets add value to the business, they do not account for profitability of the business. Financial analysis models only use the operating assets to determine future profitability.
Who is best qualified to make an analyses of a businesses financial statements?
A management accountant is a person who has been especially trained to evaluate the overall financial health of a company by examining, among other things, a business's financial statements.
How do enterprises contribute to economic growth?
Business enterprises contribute to economic growth by providing employment opportunities. This allows for more financial success and more money to flow into the economy.
What does the controlling function of management involve?
By observing and studying financial statements, managers can understand the status of the business and adjust activities where necessary to contribute toward the achievement of the business goals
What does controlling functions of management involves?
By observing and studying financial statements, managers can understand the status of the business and adjust activities where necessary to contribute toward the achievement of the business goals
Why are shareholders interested in the financial report?
Shareholders are interested in the financial report because it provides them with information about the company's financial performance and health. It helps them evaluate the company's profitability, cash flow, and overall financial stability. This information is crucial for making informed investment decisions and assessing the value of their shares.
Who are the users of financial information that are focused on the business ability to meet their financial obligation?
the internal and external users are the persons who uses the financial information , either they are directly related to the company or indirectly to their use, they are basically shareholders, debentureholders,creditors, employees and the government, financial institutions and other organisation to evaluate the status of the company.
How does the business contribute to the country?
How does the business contribute to the country?Read more: How_does_the_business_contribute_to_the_country
