I have discussed the interrelationship between the cash flow from operating activities and the balance sheet. The other two categories are also reflected in the balance sheet.
Indeed, the company may invest during the financial year in fixed assets, such as property or equipment. The negative difference reflected on the statement of cash flows will be noted as an increase in the total asset value on the balance sheet, that is, an increase in the value for "property, plant and equipment."
This is the same for the cash flows from financing activities, which are strictly connected to the "liabilities and owners' equity" fields on the balance sheet. The financing activities refer to such things as borrowing or stock issues during the financial year. The "long-term debt borrowing" value will be noted as an increase in the "long-term notes payable" value on the balance sheet.
As a general conclusion here, we may assert that the balance sheet is generally the statement where the other three statements, with an accent on the income statement and the statement of cash flows, find their values recorded. In this sense, we may assert that the income statement and the statement of cash flows form separate and more comprehensive explanations of several positions in the balance sheet.
In my opinion, this is not the only way that the interrelationship between the four basic financial statements can be demonstrated. Managers often use comparative tools and forms of analysis, because the figures in the balance sheet or the cash flow statement will not tell you much if they are not included into a more detailed analysis. This is where the financial ratios fit in the picture.
The financial ratios use values from the four basic financial statements in order to give out evaluations on the company's profitability or liquidity. There are generally six types of major financial ratios: liquidity ratios, debt management ratios, asset management ratios, profitability ratios, growth ratios and market value ratios.
The reason I have mentioned the financial ratios is that many of them are calculated by using elements from different...
Financial statements are produced in order to help stakeholders understand the financial condition of the entity in question. Different types of entities, however, have different reporting requirements. A self-employed individual has very different needs from a limited company, and these are different from not-for-profit organisations as well. This paper will examine some of these differences. The first class of business is the self-employed individual. There are no reporting standards for self-employed
Financial Statement Fraud Report: Rite-Aid Fraudulent financial reporting can really have unfavorable results on companies, as well as, public confidence in capital markets. This paper will examine the financial statement fraud and will also investigate the financial statement fraud that happened at Rite Aid in the beginning of the 2000's. The outcome of Rite Aid's fraud, as well as a lot of other key accounting scandals, led to the formation of
Financial Statement Analysis The following is an equity research report on Starbucks. The company competes primarily in the quick service food industry, where it holds the #5 market share in the United States, and #1 in its segment of coffee (QSR Magazine, 2011). The company had revenues last fiscal year (ended 10/2/11) of $11.7 billion and net income of $1.245 billion. The current stock price is $43.91, which gives the company
Business Plan Business Financial Plan for Sweet Tooth Treats Baking has always been a major part of my family life, and for generations there has been infamous cookie recipes past down from one cook to the next. Every holiday season, my cookies are notorious for being the best any gift receivers have ever had. Finally, I believe it is time to make my baking hobby and actual money making enterprise. I know
III. RECOMMENDATION The financial statements of IVK should be closely examined to determine how to increase revenues while decreasing expenses. Concerning the IT Department, the new manager needs to hire a good mix of people with various skills. There will, of course need to be staff members with exceptional technical skills that can develop new technologies to keep the firm growing at the steady rate that it did a few years
Financial statement analysis is a tool by which one can examine the publicly-available financial statements to determine the financial condition of a company. The role of the financial statements is to provide information for both internal and external stakeholders, including shareholders and regulators, about a company's finances. Thus, the SEC demands that financial statements are produced in a specific format so that there is easy comparison between companies and across
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now