...Week 2 July 27,2015 Instructor Financial management and stability is a very important factor of every health care facility. Financial planning needs to be taken into account very accurate and deal with care as well as seriousness. It is important to keep everything that involves finances in a company recorded properly in order for it to function properly watching every move a company make financially. By doing this it will help to keep track of how a company is doing whether its good or bad. The financial planning also helps give the finance department a look inside the company to see where their money is going as to see and if they are have gained profits or suffered from a lost. From this information being provided a company can then decide if changes need to be made in order to avoid any more loss from within the company. Accounting in any company is the vital part of an organization. It is very important to have a good accounting team in the finance team. Why, because the finances is what runs the business, and without the tracking and upkeep of funding, a company cannot run properly. According to "Healthcare Financing And Accounting " (2015), “the great thing about working in accounting is that everybody counts”. This information pretty much states and says that it doesn’t matter what part of a health care facility you may work in, all employees are a vital part of the day. Financial management involves handling routine financial operations, such as negotiating contracts...
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...Financial Statement Differentiation Paper Cara Hawkins ACC/561 November 16, 2011 Carl Upthegrove Abstract Financial statements are an important tool management and assessment tool. When correctly prepared and properly used, they contribute to an understanding to the financial condition, problems and possibilities of a company. Financial Statement Differentiation Paper Financial statements are the report card of businesses. whether you are a new investor a small business owner, a manager, an executive, a non-profit, or just trying to keep track of your personal finances, understanding how financial statement are used is very important There are five financial statements. They are; (1) income statement; (2) retained earnings statement; (3) balance sheet; (4) statement of cash flow; (5) interrelationships of statements. An income statement is a report that shows how much revenue a company earned over a specific time period (usually for a year or some portion of a year). An income statement also shows the costs and expenses associated with earning that revenue. The literal “bottom Line” of the statement usually shows the company’s net earnings or losses. Investors are interested in income statement because it provides useful information or predicting future net incomes. Creditors also use this type of statement to also predict future earnings. Banks lend monies on the promise they will paid back. The income statement tells banks if there is enough profit being...
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...Financial Statements Patty Reagan ACC/561 September 24, 2012 Bethany Kessel Financial Statements The financial statements of a company give the reader a view of the financial health of the company. The four major reports are the income statement, balance sheet, cash flow statement, and the statement of shareholders’ equity. By understanding the statements and how they relate to one another can help any individual to understand the financial position of the company and will aid in making good decisions when relating to the company. Each report is of importance to the management, creditors, and the investors. Income Statement The gains, revenues, losses, and expenses of a company are listed on the income statement (Johnson, 2012). The money that a company earned from the usual business operations is the revenue. The costs that are associated with earning revenue are expenses. If a company were to sell an asset, it will be considered to be either a capital gain or loss. The amount of net income is found on the cash flow statement as well. This report will be important to investors, creditors, and management. All involved parties want to see if the company is making money or if it is losing money. Balance Statement The balance sheet is a summary of a company’s assets, liabilities, and shareholders’ equity for a particular period (Balance Sheet, 2012). The three segments will give an investor a view of what a company owns and owes and the amount that shareholders...
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...and make decisions about the sufficiency of evidential matter. In making generalizations about the audit risk model, care must be taken in specifying the risk term about which a generalization is being made. Figure 9-7 Interrelationship among Materiality, Detection Risk, and Substantive Audit Evidence There is an inverse relationship between detection risk and the sufficiency and competency of evidence needed to support the auditors opinion on the financial statements. That is, for a particular client, the lower the level of detection risk to be achieved, the greater the amount of evidence needed. For a particular assertion, the lower the acceptable level of analytical procedures risk or tests of details risk determined by the auditor, the greater the sufficiency and competency of substantive test needed to restrict overall detection risk to that level. Interrelationship among Materiality, Detection Risk, and Substantive Audit Evidence In separate sections, we previously explained that there is an inverse relationship between materiality and audit evidence, and an inverse relationship between detection risk and the evidence obtained from substantive audit procedures. Figure 9-7 illustrates these relationships, as well as the interrelationships among all three concepts. For example, if in figure 9-7, we hold detection risk constant and reduce the materiality level, more substantive audit evidence should be obtained. Similarly, if we hold the materiality level constant...
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...shares e.g., marketing Creditors who evaluate managers, production risks of giving credit and supervisors, chief lending money financial officers, other e.g., suppliers, bankers employees Government and regulatory bodies e.g., ATO, ASIC 11 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) In order to measure, process and communicate financial information, accountants follow rules, principles and standards. These rules, principles and standards are set by International Accounting Standards Board (IASB) Australian Accounting Standards Board (AASB) Financial Reporting Council (FRC) Australian Securities & Investment Commission (ASIC) 12 4 8/13/2014 SOME PRINCIPLES AND ASSUMPTIONS Time period •Economic information can be captured and communicated over short periods of time Monetary unit assumption •Only data that can be expressed in terms of money is included in the accounting records Economic entity assumption •Can be any organisation or unit in society •Activities of the entity must be kept separate and distinct from activities of the owner and all other economic entities Going concern assumption •The assumption that an entity will continue to operate in the foreseeable future 13 FINANCIAL STATEMENTS Four financial statements are prepared from the summarised accounting data Each statement provides...
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...Those stakeholders rely on four primary financial statements: the income statement, the capital statement, the balance sheet, and the statement of cash flows. Naturally, you begin by studying those four financial statements and the accounting processes that lead to their creation. Those processes include recording financial transactions in journals and then posting to the general ledger. In this first week, you learn the purpose of those four statements, what the financial statements include, and how the financial statements are constructed to provide valuable information to stakeholders. You also learn the basic mechanics of accounting. These include journalizing transactions into accounting records using debit and credit rules. You also learn why the general ledger is critical to the accounting process and how transactions are posted to the general ledger. Basic Accounting Principles and Concepts OBJECTIVE: Identify the four basic financial statements. Resources: Ch. 1 & 2 of Financial Accounting Content • Ch. 1: “Introduction to Financial Statements” o Forms of Business Organization • Internal Users • External Users • Ethics in Financial Reporting o Business Activities • Financing Activities • Investing Activities • Operating Activities o Communicating with Users • Income Statement • Retained Earnings Statement • Balance Sheet • Statement of Cash Flows • Interrelationship of Statements • Other Elements of an Annual Report ...
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...Please describe the purpose the Balance Sheet and the interrelationship between the balance sheet and the other major financial statements. The balance sheet provides information on what the company has in assets, what liabilities they have and the value of the business to its stockholders (the shareholders' equity) as of a specific date. The reason it's called a balance sheet is because the two sides balance out. A company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders (shareholders' equity). The following formula is what makes up the Balance sheet: Total Assets = Total Liabilities + Shareholders' Equity Assets are all the economic resources that are expected to produce economic benefits for their owner Liabilities are obligations the company has to outside parties. Liabilities represent others' rights to the company's money or services. Examples include bank loans, debts to suppliers and debts to employees. Shareholders' equity is the value of a business to its owners after all of its obligations have been met. This net worth belongs to the owners. Shareholders' equity generally reflects the amount of capital the owners have invested, plus any profits generated that were subsequently reinvested in the company. The assets side include accounts such as cash, property and inventory. The liability side include accounts such as accounts payable or long-term debt. There is not one set template of...
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...his case follows the performance-review and financial-statement-forecasting decisions of a Value Line analyst for the retail-building-supply industry in October 2002. The case contrasts the strong operating performance of Home Depot with the strong stock-market performance of Lowe's. Students examine a financial-ratio analysis for Home Depot that acts as a template for generating a comparable ratio analysis for Lowe's. The student ratio analysis is designed to build intuition with respect to interpreting individual ratios as well as ratio interrelationships (e.g., the DuPont framework). The historical-performance comparison suggests that investors are skeptical of the ability of Home Depot to maintain its performance trajectory, yet they project sustained improvements for Lowe's. Students are invited to scrutinize the analyst's five-year income-statement and asset-side balance-sheet forecast for Home Depot. The case expressly focuses on the asset side of the balance sheet as a preview for other cases using free-cash-flow forecasting. The Home Depot forecast exercise exposes students to the mechanics of financial-statement modeling and sensitivity analysis, which they can use in building their own forecast for Lowe's. Finally, the strong-growth assumptions for Home Depot relative to the modest-growth forecast for the industry suggest that the company can be expected to capture massive and perhaps unreasonable market share in the near term. The exercise provides a striking example...
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...Financial Statement Relationships Interpreting the results from the financial statements is critical. However, understanding how the financial statements are linked, and how a set of numbers from one statement can change the set of numbers from another statement is fundamental to the success of the company. Interrelationships The four financial statements income statement, retained earnings statement, balance sheet, and statement of cash flows are connected because one set of numbers, either a balance or an entry, is reflected on another statement. According to Kimmel, Weygandt, and Kieso, (2011) the retained earnings statement is connected to the income statement because the bottom line of the income statement (net income) is added to the beginning retained earnings amount. This is used to determine the ending retained earnings. The ending retained earnings are then reflected on the balance sheet under owner’s equity. The net income becomes the first line of cash on the cash flow statement as the cash flows from operations. The balance sheet starts with the cash at the end of the year under current assets as reflected on the statement of cash flows. The cash flow statement connects all three financial statements as the statement begins with the net income from the income statement, then the cash at the end of the year becomes the first line of cash on the balance sheet. Relationship Between the Financial Statements Income statements, retained earnings statement, balance...
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...focuses in detail the Financial Ratios and also understanding of the working capital management of IRCTC. This report will analysis and describe different ratios and how it manages its working capital. “It is meaningless to financially analyse a company without understanding the context and environment in which it operates”. As IRCTC has its monopoly in Indian Railways, so we will take a close look to intra firm analysis. A ratio is an arithmetical relationship between two figures. Financial ratio analysis is a study of ratios between various items or groups of items in financial statements. Ratios can be classified according to statements mainly they are profit and loss ratios or income statement ratios, balance sheet ratios or position statement ratios, mixed ratio or inter statement ratios The ratios are calculated with the help of Annual report of IRCTC provided by the company; the data of last five financial years has been used for that. The project begins with the discussion about the scenario of Indian Railway and role of IRCTC in that. The project then describes the main concept- Ratios and their analysis by determining that why the ratios have changed, which can be due to the change in the accounting policies without a material change in the firm’s performance. The focus of the project then shifts to Working capital which is concerned with the problems that arise in attempting to manage current assets, the current liabilities and the interrelationship between them. The...
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...University. I understand that all students play a role in preserving the academic integrity of the University and have an obligation to report violations of the Academic Integrity Policy committed by other students Michael W. Diamond The accounting process for any company is a daunting task and cannot be taken lightly. The types of statements and the people required to perform this task must always be taken into account. While big business seems to have mastered accounting and the process involved, small business must also take into account the process, people, and the proper controls required to run a business successfully. Each financial statement has a special purpose, and that is how they were designed. At the same time, each financial may be used to show how an organization is function, in particular, to the organization’s financial health. Technically, there are four financial statements according to generally acceptable accounting principles (GAAP): (1) balance sheets; (2) income statements; (3) cash flow statement; and (4) statements of shareholders’ equity. The real question is which statement is best at communicating the financial health of a company? The balance sheet provides, in detail, the company’s assets, liabilities, and shareholders’ equity...
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...The Accounting Equation Sevara Smith ACC/300 February 11, 2013 Rena Ballot The Accounting Equation The basic accounting equation is, assets are equal to liabilities plus stockholders equity. The assets in the equation are the resources owned by a company such as cash, inventory, fixed assets, and accounts receivable. The liabilities are the debits and obligations of the business, the amounts owed to creditors. The stockholders’ equity is the claim the owners have to assets. The stockholders’ equity is subdivided with two parts, common stock and retained earnings. The common stock is the money paid for shares by the stockholders. The retained earnings are the amount the company retained in net income. With the accounting equation every transaction should have a twofold or dual effect to the extent of the same amount. In other words, assets must balance with the claims to assets. For example, if an asset is increased, a decrease has to occur in another asset or an increase in a liability or stockholders ‘equity. This dual process is revealed on the balance sheet. The balance sheet gives a picture of a company’s finances at a point in time. It gives a summary of the assets, liabilities, and owner’s equity. The balance sheet represents the accounting equation for a company. It displays the assets and claims to assets at a given period of time. The claims of assets are divided into two groups they are claims of creditors (liabilities) and claims of owners...
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...to understanding finance is learning the four elements of financial management and their relationship to one another. It is important that all financial records are up to date because this helps keep track of how an organization, so they know if they have a profit or a loss. There are four elements of financial management are planning, controlling, organizing and decision making. The first one is planning it allows an organization to set goals and guidelines to ensure success and accomplishments in set goals. The second element of financial management is controlling. Controlling allows an organization to ensure that all rules and regulations within the organization are being followed. The third element of financial management is organizing. Organization is important because it guarantees that the organization is working at its best and it is organized while directing the medical office to work and fix problems that may come. The last element of financial management is decision making. All decision relies on information, and evaluation. Decision making works along with the planning, controlling and organizing by gathering information and helping to make a decision. Financial management is important in healthcare financial plans. Companies can not function without the proper financial planning. Generally Accepted Accounting Principles (GAAP) gives guidelines for organizations to follow in regards to their financial report. Misconduct, fraudulent behavior and abuse happen...
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...SUMMARY: FROM COMPETITIVE ADVANTAGE TO CORPORATE STRATEGY: 1. Passing the Essential Tests a) How Attractive Is the Industry? An attractive industry with a high ROI will be difficult to enter because entry barriers are high, suppliers and buyers have only modest bargaining power, substitute products or services are few, and the rivalry among competitors is stable. An unattractive industry like steel has flaws i.e. many substitute materials, powerful and price-sensitive buyers and excessive rivalry that may be state supported. b) What Is the Cost of Entry? Diversification cannot build shareholder value if the cost of entry into a new business eats up its expected returns. A company can enter new industries by acquisition or start-up. The more attractive a new industry, the more expensive it is to get into. c) Will the Business Be Better Off? A corporation must bring a competitive advantage to the new unit, or the new unit must offer potential. When the benefit to the new unit comes only once, the parent company has no reason to keep the new unit over the long term. Once the results of the one-time improvement are clear and the diversified company no longer adds value, sell the unit and free up corporate resources. 2. Four Concepts of Corporate Strategy – (a) Portfolio Management: Is based primarily on diversification through acquisition. The corporation acquires sound, attractive companies with competent managers who agree to stay on. The acquired units are autonomous...
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...Course Name : Commence Date: Submission Date: Lead Lecturer: E-mail : Centre for Post Graduate Studies MBA 10 July 2013 24 July 2013 Theang Kok Foo kftheang@yahoo.com Individual Assignment 1 @20% Learning Outcome (LO) Mapping Task LO1 Analyse and interpret financial and managerial report for decision making. #1 #2 #3 Bloom’s Taxonomy LO2 Understand the basic concepts used in the preparation of financial statements. Critically assess the information relayed by financial reporting. Use financial information for financial and corporate strategy purposes. #4 Cognitive domain: Evaluation [High Order of Thinking Skills] Affective domain: Characterisation LO3 #5 #6 LO4 #5 #6 MBF 1213 Managerial Accounting – MBA Major Module July/August 2013 Assignment 1 1 CENTRE FOR POST GRADUATE STUDIES YOUR TASK: Limkokwing University of Creative Technology CASE STUDY: Cost Behaviour and Cost Volume Profit Analysis 1. Using the High-Low method to estimate the per-unit variable costs and total fixed costs. 2. Using the single product setting of the Cost-Volume-Analysis (CVP) to calculate the break-even point. 3. Use CVP analysis to calculate the break-even point. 4. Prepare an income statement for the company. 5. Calculate the company’s margin of safety 6. Calculation of product units to be sold for a target profit after cost increased INSTRUCTION TO PAIR ASSIGNMENT • This assignment, which carries 20 % of the total marks for the module, is compulsory for...
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