Posts Tagged ‘Financial statements’
Financial information is information produced by the accounting essential for management and business development and therefore is processed and concentrated for use by management and those working in the company.
The need for this information makes the occurrence of financial statements. The financial information has become an integrated set of financial statements and notes, to express what the financial condition, results of operations and changes in financial position of a company.
The importance of financial information to be presented to users used to formulate their conclusions on the financial performance of the entity. Through this information and other evidence the general user can evaluate the future of the business and make economic decisions on it.
Financial reporting objectives
The basic financial statements must meet the objective of reporting on the financial situation of the company on a certain date and results of operations and changes in financial position for the accounting period ended on a certain date.
The E. F. is a means of communicating the financial position and an end why not try to convince the reader of a certain viewpoint or position. The ability of E. F. is to transmit information that meets the user, and since there are different users of this information it should serve to:
*Investment decisions and credit, the main stakeholders of this information are those that can provide funding or granting credit to see how stable and growth of the company and thus know the yield or return on investment.
*Appraise the solvency and liquidity of the company and its ability to generate resources, here are the different stakeholder’s creditors or owners to measure the flow of money and performance.
*Evaluate the origin and characteristics of financial business and its performance, this area is of interest to know the use of these resources.
* Finally form an opinion of how it has handled the business and evaluate the management of the administration, how to manage profitability, solvency and growth of the company.
The analysis of economic and financial situation was made on the data of financial statements for the first quarter of 2010, comparing 2009, assessing different rates as reasons for working capital, liquidity, activity, debt, financial and economic performance is also performed a percentage analysis of the Income Statement. Concluding that the company works efficiently in the year 2010 that is discussed but there are still some shortcomings to which recommendations are focused in order to improve performance and progress in the ongoing struggle to achieve economic efficiency. We used the universal method of dialectical materialism, as the correct method of knowledge that presupposes the study of the intertwined with each other.
In the struggle of our to realize the economic strategy, the battle for improving efficiency by mobilizing and harnessing the wealth of initiatives emanating from labor groups and also for the discussion and control the assembly plans for efficiency are crucial elements for achieving economic recovery and achieve the historic goals that our people aspire.
In this sense, the Cuban companies must fulfill their role, defined by a set of obligations arising from their role in society remains undisputed social nature of them.
To achieve effective management of the direction of economic organization must make decisions in line with the comprehensive assessment of the same which is an important economic and financial diagnosis is made based on the analysis of financial statements.
Knowing the importance of systematic analysis of economic and financial data that makes institutions more efficient, the research aims to solve the following scientific problem. No map out the process of economic and financial analysis on the causal relationship to assess the current management of project the state of the Company Sales Caracole Las Tunas based on their strengths.
The overall objective of this study is to analyze the economic and financial situation of the Company Sales Caracole Las Tunas, to contribute to making the right decisions aimed at fulfilling the objectives.
To meet the goal set, we used procedures, methods and techniques of economic and financial analysis and computational research. Formulated the following hypothesis: The application of appropriate techniques for analyzing financial statements should lead to the problems that have generated the effects that show these states, and hence, by a cause-effect analysis, the causes that created it, enabling more rigorous assessments for the projection of future results, which could substantially impact on improving the management of the center and more effective use of resources.
The research was developed from a thorough review of the literature on the subject as well as revisions to various articles, and conducted exchanges with managers and specialists of the entity.
In the study we used the fundamental scientific method of economic analysis Dialectical Materialism as a universal method of knowledge that reflects the content of objective economic laws operating in society.
The basic financial statements include: Statement or Profit and Loss Statement are cumulative monthly until the end of the year, Statement of Changes in Heritage; Cash Flow Statement, and Notes to the Financial Statements, which relate to year-end.
Whatever the elements and divisions of the first two states is important to note the presentation rules and valuation to be considered when developing, which are covered in the series C of accounting principles, which include a newsletter for each field.
Some rules are:
1. – When the balance of the creditor is another bank account upon submission of the reclassified balance that must balance against the person who originated it.
2 .- If you have a receivable and a payable in the name of one person must be subtracted from the balance and showing only the amount corresponding to the account balance has increased, obviously due to the difference.
3. – The share of social capital which has not yet been shown is represented by a balance in the account, shareholders, which should not appear as an asset account, but must appear in stockholders’ equity minus the balance of social capital.
4. – The balance of inventories should be reflected in the assets after the accounts receivable.
5 .- In the case of a person who has a long maturity, but which has set up a monthly payment plan to liquidate that portion of the debt that will be awarded for a term not exceeding one year should be considered within the current liabilities.
The structure of the Trial Balance contains assets (holding company), liabilities (obligations to third parties), and capital (participation of the owners or shareholders). You can determine the state of liquidity (cash available in the near future after deducting financial commitments for the period), solvency (availability of long-term cash to meet obligations when due), and profitability of assets and capital.
The financial statements provide information on the financial position, changes and the operation of the company. On the other hand, the income statement presents information on the development of the company, and measure the operation of the same through the generation of profits or income. The main elements for such measurement is revenue and costs or expenses, through which it determines the company’s ability to generate cash flows and measure the effectiveness with which you can use. Similarly we can evaluate the administration, their responsibility and have evidence for making decisions, whether to keep or sell their investment and confirm or replace management.
The Statement of Changes in Equity, for its part, shows the movements that have occurred during a period, in the balance sheet as capital or contributions from the owners or shareholders, and also shows recorded in retained earnings outstanding capital stock or distribute and reflects the distribution of dividends available to shareholders is no profit sharing in order to strengthen their business. In Cash Flow provides information on the ability to generate cash flow from operations, investing activities and financing, and through these we can analyze a company’s ability to pay its commitments. salaries, supplier’s creditors and dividends to its owners. It also is a tool for determining funding needs.
Notes to Financial Statements on the other hand, are further information on general information about the company, the accounting policies adopted, clarification of the risks, uncertainties and changes in prices affecting the company and other resources and obligations not recognized in the Balance Sheet, also contains references to financial data of the country.
In the financial world there are some things that are closely related to financial issues. Here are some examples of financial statements:
- PROJECTED FINANCIAL STATUS
Statement in the future or a period based on an estimate of transactions that have not been made, this is the state that often accompanies the estimated budget, pro forma statement.
- AUDITED FINANCIAL STATEMENTS
do those who have gone through the process of reviewing and verifying information, the test is performed by independent public accountants which ultimately express an opinion on the fairness of financial position, results of operations and cash flows that the company presents the financial statements of a particular sport.
- CONSOLIDATED FINANCIAL STATEMENTS
they are issued by an independent law firm that shows the financial position and profit, as if the company’s operations is a single legal entity.
It is not easy to control our finances. Therefore we should be able to maintain good financial habits, keep track of total spending well so we know what we are doing is correct yam. Here are some ways that we can do to overcome the financial problems:
Tips 1: bad and good habit Habit
Almost always the way to work, back in the car with a friend. I’m very protective of those I love or anyone entering the car so I demand that you please use your seat belt, accidents are accidents and you never know when, where and with whom it will. The first few months every day I had to ask my partner to put the belt, now you do unconsciously. This is a good habit, not using the belt a bad habit.
Financially the same. Bad habits can be compulsive or impulsive spending, debt, always use credit cards, do not manage the finances, etc.
So the advice here is to try to target these bad financial habits you have and try to change them. If you smoke, it probably does by habit, but when it is known that smoking is doing. Then with the money yourself, you know when you are managing or using your money in a way that can hurt you.
Try making a list or write when you see those bad habits, then keep them in a place where the display.