Financial Statements

You can take known information about the company and apply industry/regional standards.

For example, if it is a retail store, you could estimate sales based on square footage and then estimate profit as a percentage of sales.

If it is a service business, you could estimate income per productive employee, etc.

The liquidator's final account shows the succession's net assets or deficit.

Negative cash flows from financing activities means that the firm is paying out more money to investor (in the form of debt principal repayment, interest payment, dividends and share repurchases) than it is raising from investors. Usually, negative cash flows from financing activities are associated with mature companies generating more than enough cash from operations to fund future activities. It is not necessarily bad news. Conversely, early-stages firms rapidly growing firms and those in financial distress typically have positive cash flows from financing activities.

Projected financial statements are estimated financial statements before starting of any operating activity for planning purpose.

An Illiquid asset is one that cannot be sold immediately in return for cash and there will always be some time lapse between the point where you want to sell it to the point where you actually receive the cash.

For Ex: Real Estate is an example. You may decide to sell your house today but you may find a prospective buyer and get cash only after a few days or even weeks.

Cash is the most liquid asset and then come government bonds and other debt instruments and so on.

See, the accountant makes the balance sheets and stores them away right? So the information is communicated through email (sometimes) to the boss or manager of the company so that the manager or boss can found out if the business is progressins. The managers also have meetings with their accountants.

Accounting use mathematics in order to interpret facts and figure. This requires some basic and intermediate knowledge of mathematic concept and theories.

Contingent liabilities is there in the balance sheet but not really there as It can give misleading information about the condition of the company.

Retained Earnings

The accruals concept of accounting states that transactions are to be recognised when they occur, and reported in the periods to which they relate.

This would include a debit to cash for the amount received and a credit to the account receivable that the amount pertains too.

Retained earnings are deducted because they are only used by the corporation. These are not distributed to shareholders as dividends so they cannot be used as part of that cash flow.

Net profit margin = 64000 / 720000 * 100

Net profit margin = 8.89%

if the question is like share £35 in the ratio 2:5 you have to first add up the parts so 2+5=7 then you have to divide the original amount by that number so 35 divided by 7= 5. This makes up 1 part so to find out 2 and 5 parts you have to multiply that number by 2 and 5 so 5x2=10 and 5x5=25 so the ratio is 10:25 if you want to you can simplify the answer by dividing it by the same number on each side.

It is operating activity because business borrow from bank to fulfill it's working capital requirements and working capital is used to run day to day operations of business that's why it is operating activity.

in assets side of the balance sheet

Financial Statement:

Financial statement is a instrument used to present a companies financial position.

Financial statement complies with balance sheet, cash flow and funds flow statements.

Final accounts is the final stage of preparation of financial statement

Yes pre audit is the responsibility of internal audit department as external auditors are only auditing the activities after end of fiscal year when everything is complete.

Managers can be encouraged to act in stockholders' best interests through incentives that reward them for good performance but punish them for poor performance. Some specific mechanisms used to motivate managers to act in shareholders' best in- terests include (1) managerial compensation, (2) direct intervention by shareholders, (3) the threat of firing, and (4) the threat of takeover. Stock that is awarded to executives on the basis of the company's performance. An option to buy stock at a stated price within a specified time period that is granted to an executive as part of his or her compensation package.

Why are the dates on financial statements important

A useful way to think about the assertions is: Classes of transactions - assertions pertaining to the income statement (profit and loss account) Account balances - assertions pertaining to statement of financial position (balance sheet) Presentation and disclosure - speaks for itself. So when there is a figure for an expense in the income statement, the auditor needs to check that: > The expenses occurred and relates to the entity > The expense amount is complete i.e. all expenses have been recorded/accrued > The amount is accurate > The cut-off is correct (for example purchases/inventory) > The expense has been properly classified

To determine the overall heath of a group of companies as opposed to only one company.

One disadvantage of ration analysis is the analysis is limited to numbers. Another disadvantage to ration analysis is the fact that the numbers can be manipulated.

It is important to keep a record to ensure that you are making payments in a timely manner. Tracking your suppliers will also help you manage your inventory.

Cash flow statment is that in which only cash transaction are involved.

All the payment or receipt related only with cash.