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Why is it necessary to identify your current financial position before making further financial plans?
Wiki User
∙ 11y ago
You need to know where you're current position lies, because it is one of the MAIN things that will influence where your future plan will be headed.
Example:
If you are in debt, your goals will be to increase productivity and decrease your costs. So, if you weren't to know you were in debt; you might decide to purchase a million dollar asset - that you absolutely cannot afford.
You need to be able to afford things before you go making plans, because otherwise they will be useless.
If you have TOO much cash just sitting there, but you didn't have any plans to do anything with this money, then this would be a loss - because cash does not generate any income. If you knew about your current position, you may be inclined to invest or put your money to good use - instead of letting it just sit there.
Therefore, knowing your current position will definitely influence your future decisions and directions.
Wiki User
∙ 11y ago
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What is the purpose of a financial statement analysis?
The goal in analyzing financial statements is to assess a company's past performance, current financial position; and to make predictions about the company's future performance. This directly relates to stocks, bonds, and other financial instruments.
What is the End product of financial accounting?
Financial Accounting is concerned with preparation of Financial Statements that would serve the interests of Investors, Banks, Creditors, and general public at large. The aim of Financial Accounting is to facilitate Financial Decision Making based on Accurately Gathered Significant financial Information pertaining to the Performance of the Organization and also giving information about the Current position of the Organization's Assets and Liabilities.
Are provisions long term liabilities or short term?
Statement of Financial Position constitutes both "Long Term Provisions" as well as "current provisions" depending upon their nature and upon the fact that whether they fulfill the criteria for long or current provisions. This fact is evidenced by the sample statement of financial position as provided in IAS1 of IFRS where the long term liabilities constitute an item "provisions" and under the head of short term-liabilities there exists an item named "current provision".
Disadvantages of financial audits?
Financial statements give an idea about the financial position of the company, however, there are some limitations of the financial statements. The first limitation is that a financial statement ignores the productivity and the skills of the employees in an organization. Management Decision Analysis Report gives an idea about it but financial statements are unable to evaluate the skills which a company has. Secondly, balance sheet does not give timely and relevant information because it is based on historical costs and it does not give a fair idea about the current position of the company. There are different accounting measurement systems therefore, use of different techniques by different companies can make the comparisons of financial statements difficult. Moreover, income statement is considered a fiction because cash is king and income statement ignores this fact.
What is the definition of human resource inventory?
Human Resources Inventory is an inventory of skills of human resources currently employed in the organization. It tells management what individual employees can do. The profile of the human resource inventory can provide information for identifying current or future threats to the organization's ability to perform .It is necessary for a firm to identify the current capability and skills of their employees
Preparing personal financial statements is part of which of the five steps of the financial planning process?
B. Analyse your current financial position
What factors affect your current financial position?
Overhead expenses, the economy, and poor credit.
Explain what the Du Pont financial system reveals?
The system shows the various components affecting ROA, such as profit, non- current and current assets, and the most important figures appearing on the statement of income and the statement of financial position.
What is the purpose of a financial statement analysis?
The goal in analyzing financial statements is to assess a company's past performance, current financial position; and to make predictions about the company's future performance. This directly relates to stocks, bonds, and other financial instruments.
What are the six steps used to create a financial plan?
1.)Determine your current financial situation. 2.)Develop your financial goals. 3.)Identify your options. 4.)Evaluate your alternatives. 5.)Create and use your financial plan of action. 6.)Review and revise your plan.
What is financial risk management?
Financial Risk Management is a process of evaluating and managing current and possible financial risk at a firm as a method of decreasing the firm's exposure to the risk. Financial risk managers must identify the risk, evaluate all possible remedies, and then implement the steps necessary to alleviate the risk. These risks are typically remedied by using certain financial instruments as a method of counteracting possible ramifications. Financial risk management cannot prevent a firm from all possible risks because some are unexpected and cannot be addressed quickly enough.
What do you most enjoy about your current role?
One of the things that people most enjoy about their work is the ability to earn a living for their family. They also like the ability to change their current financial position.
What does the bank consider before granting an overdraft?
current ratio, net working capital and financial position are considered for granting an overdraft - DSR
Current position of IT companies field?
answer current position of it sector
What is non-cumulative perference share?
non cumulative shares are those shares which do not get previouse dividends due to company's bad financial position. for example, if they were suppose to get dividend @10% last year, but could not get due to bad financial position of the company, and in the current year company gets stable and is willing to pay dividend, so it will pay only current year dividends and not last year dividends... if it was cumulative share company would pay last year and current year dividend.. conclusion: non cumulative share doesnot get previouse dividends and cumulative share gets all dividends (previouse+ current) when compnay restores its good financial position.
What is non cumulative perference share?
non cumulative shares are those shares which do not get previouse dividends due to company's bad financial position. for example, if they were suppose to get dividend @10% last year, but could not get due to bad financial position of the company, and in the current year company gets stable and is willing to pay dividend, so it will pay only current year dividends and not last year dividends... if it was cumulative share company would pay last year and current year dividend.. conclusion: non cumulative share doesnot get previouse dividends and cumulative share gets all dividends (previouse+ current) when compnay restores its good financial position.
When was Prayer for the Current Financial Situation created?
Prayer for the Current Financial Situation was created in 2008.
