Financial Statements

The overall cost of capital is the cost of the opportunity to make a certain investment. A financial manager uses the overall cost of capital as a way to gauge the rate of return of one investment over another.

the assets will loose their assets vavues because of wear and tear use of goods

Premises as in Property (Commercial/Industrial) are classified as Non- Current Assets

Depreciation for the current year is considered an expense and, like all expenses for the financial year, need to be shown on the P & L. As each year passes, the current year's Depreciation Expense gets added to Accumulated Depreciation (most companies do this each month rather than once a year). Accumulated Depreciation, just as it sounds, is an accumulation of all depreciation for an asset. The reason Accum. Deprec. is shown on the Balance sheet is because it is reducing the (book) value of an asset. And all asset (book) values are shown on the Balance Sheet.

you would label it as a prepaid expense. Debit -prepaid travel expense credit- cash

Reports of the living costs, non-priority debts, priority debts and income are required of the Congress to publish a statement of all expenditures and income.

Before we start a business we should consider mainly about our financing methods. We should use long term financing methods like long term loans and we should use use short term methods for satisfy day to day working capital requirements..

Accumulated Depreciation is a liability nature of account to reduce the contra asset from balance sheet that's why it only shows in liability side of balance sheet to show reduction of asset.

compare the company with previous years

Or

with other company's of the same type

e.g= food v.s food

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or

(b) a present obligation that arises from past events but is not recognised because:

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) the amount of the obligation cannot be measured with sufficient reliability.

Contingent liability is not shown in balance sheet because the actual occurance or amount of liability is unknown until some specific future time or event that's why it is shown as note in notes to financial statement section.

Confidence in the operation of capital markets is compromised when the system of public disclosure is eroded by reported instances of fraudulent reporting.

Introductory paragraph What was audited and the division of responsibility * management for the financial statements * the auditor for expressing an opinion scope paragraph The nature of the audit process Opinion paragraph The auditor's opinion on the fair presentation of the financial statements Explanatory paragraph If an unqualified opinion cannot be expressed, reasons why

- By generating GAAP earnings and not paying them as dividends - the retained earnings will increase. - By selling and increasing outstanding number of shares - the paid in capital will increase.

Investments are seen as current assets if the firm intends to sell them within a year. Long-term investments (also called "noncurrent assets") are assets that they intend to hold for more than a year. check link in bio for more information

Depending on the type of financial statement requested, there is a wealth (pun intended) of information that can be found in financial reports. Such information can include balance sheets, as well as income statements. Balance sheets are very useful as they provide the information for a company, including it's assets, equity, and liability. This will provide a "snapshot" of sorts of a company, allowing one to access information that may not be knowingly readily available to the public. Income statements are also a great source for anyone interested in knowing what a company has earned over time. These types of statements are useful for accountants, shareholders, and anyone interested in investing in a company.

A cash flow business is typically going to be a business which specializes in buying, brokering or otherwise investing in Cash flow notes.

Cash flow notes are privately held mortgage notes held be the seller of a real estate property in lieu of a bank mortgage.

If you are in the "cash flow business" then you are investing in or brokering private notes.

A profit and loss statement is a summary of how a much money a business has made over a period of time. If one has a very small business, it is possible to create one's own profit and loss statement using software, and one must send this in with the business' tax return. However, the larger the business, the more likely it is that an accountant or bookkeeper will need to create the profit and loss statement.

The Net Operating Income approach is the opposite of the Net Income approach to capital structure. With this approach, any change in leverage will not necessarily affect the market value of shares.

Debit amortization expenses
Credit intangible assets

A non-operating working capital is a category for items that cannot be classified anywhere else like amounts due on fixed assets and dividends to be paid. Operating working capital, on the other hand, is a category that represents operating liquidity of a business.

There are two main types of cash flow statements. The direct method and the indirect method.

The direct method is when you start with the opening balance of the bank accounts and show the money in and the money out normally split into categories.

The indirect method is where you start off with operating profit and adjust for non cash items so you're left with cash from operations, then you'd show the cash movements from investments, followed by cash movements in balance sheet items such as debtors and creditors. After all that, you should get to the balances on the bank statements.