The following report will justify the use and importance of finance as a decision making tool within organisational contexts. In addition, an application of basic financial techniques will be present in order to analyse the performance of an organisation in 2012 to their performance in 2013.
2.0 Justification of finance as a decision making tool
Within organisations, the justification of finance in regards to a decision making tool is critical.
2.1Double-Entry Bookkeeping
Within an organisation, bookkeeping is simply a form of recording financial transactions. Dyson (2007)asserts bookkeeping is critical, postulating “bookkeeping may be regarded as the foundation on which the entire discipline of accounting is built”. It is critical
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The two aspects are acknowledged as debits and credits. Mott (2007)
2.11 Single-Entry Bookkeeping
Alternatively, organisations not using double-entry bookkeeping will use single-entry bookkeeping. Single-entry differs from double-entry by not following the “dual aspect rule, with Hanif (2013)stating “transactions are not recorded in their two-fold aspects”. There are limitations of single-entry bookkeeping in comparison to double-entry bookkeeping. Hanif (2013) Fleay et al (2011) Ahmed (2008) Mukherjee and Hanif (2006)postulate that due to single-entry bookkeeping not acknowledging nominal accounts, this results in the “trading and profit and loss account cannot be prepared”. Additionally, single-entry bookkeeping does not have set rules that double-entry bookkeeping has, resulting in potential confusion. Additionally, employers integrating double-entry bookkeeping into their business in comparison to single-entry are able to make better decisions, signifying the critical importance of double-entry bookkeeping, in regards to benefiting employers, guiding them to make better, informed decisions.
2.2 Trial Balance
Kimuda (2008)defines trial balance as “a schedule of balance, both credit and debit, extracted from the accounts in the ledger”. In addition, Rich et al (2012)asserts a trial balance explicitly states active accounts and the debit and credit balance of each account. Additionally postulating trial balances
Unadjusted Trial Balance: This is the third step in the accounting cycle. After all the journal entries are posted to the T-accounts, the unadjusted trial balance can be prepared and the purpose is to be sure that the total amount of debit balances in the general ledger equals the total amount of credit balances.
S., & Hassan, M. K. (2012). The domination of financial accounting on managerial Commerce & Management, 22(4), 306-327. doi:10.1108/10569211211284502
The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future
I suspect that most of us can view and appreciate most sports such as baseball, football, and basketball. What if you were to view a Cricket World Cup game? If you didn’t know the rules you probably would not have much fun. The same happens in business if you don’t understand its language – Accounting. What rules impact a business’ Accounting Information System? What types of compliance is required?
I suspect that most of us can view and appreciate most sports such as baseball, football, and basketball. What if you were to view a Cricket World Cup game? If you didn’t know the rules you probably would not have much fun. The same happens in business if you don’t understand its language – Accounting. What rules impact a business’ Accounting Information System? What types of compliance is required?
Prepare an 8- to 10-page fundamental financial analysis (excluding appendices, title page, abstract, and references page) that will cover each of the following broad areas based on your chosen company’s financial statements:
Accounting aspects have been several in amounts. They lay out ground rules for succeeding in
This essay is continuation of the financial evaluation from last week; we had to choose a company among the Fortune 500 in my case I chose GE Company. This Finance is about the study of money, it helps managers and senior leadership in an organization to be able to make better objective decisions (Blacconiere & Hopkins, 2002). Every company must invest in having an accountant which will create financial statements that provides information about the financial performance of a company.
When determining and defending the use of a particular ethical system within the confines of a profession, it is important to evaluate the system in terms of the professional culture as well as the expected professional conduct laid out within the vocation itself. The accounting profession has been evolving for thousands of years. Early accounting records date business transactions back as far as third century B.C. (Schroeder, Clark, & Cathey, 2009). Early record keeping was for internal purposes and as societies and economies expanded, it became important to maintain records for external purposes as well. According to Schroeder, Clark & Cathey (2009), by the ninetheeth centruy, bookkeeing expanded into accounting (p. 3). From this time, it has been the duty of the accountant to serve the public interest and the profession has been culitvated into an organizational culture with professional norms and standards constantly taking shape in an effort to complete an all-inclusive conceptual framework.
The purpose of this report is comprehensive quantitative analysis for the financial performance of Barclays Bank. Quantitative analysis is an important method of looking beyond the numbers and understanding the stories they tell. It is quantitative analysis that gives way to qualitative analysis and allows us to gauge the running of a business better. Quantitative analysis is key towards improving our understanding of the relationships that may exist among key financial variables or key factors influencing the performance of a firm. The application of quantitative analysis towards business performance is a key method of identifying problems that may hinder the growth of the business and tackle their root cause.
Financial Management Introduction = == == == ==
This report is to propose an appropriate capital structure for Xpresso Delight Limted’s business expansion with the minimum amount of capital as US$ 30 million. In order to achieve that goal, firstly, it is going to identify the sources of finance available for the business as debt financing which include loans, debentures and bonds; and equity financing, which includes common shares, preference shares and retained profit. It is also to discuss advantages & disadvantages of each source, as well as to assess the implications of these different sources related to risk, legal, financial and dilution of control and bankruptcy. Based on those analyses, it is to select the appropriate sources of finance for the
In addition to accountants providing many useful numbers that signal a company’s performance, they also prepare many useful documents and a code of ethics to make sure that all stakeholders have a clear picture on the business’s financial position. For instance, journaling is what accountants do after every transaction. These entries of what is exchanged in a business provide evidence that money deserves to be in a certain account. Especially since every journal entry needs a corresponding document that proves the record did happen, journals can be used by executives to see what really occurred in case a number in an account looks wrong (Schneider). It is also used when a government official suspects that the company is unfairly representing itself to either indict the business or prove its innocence. Journaling illustrates the importance of accounting since everything is documented and has proof for existence in the case of errors. One thing that journals go hand-in-hand with is the general ledger. This is the document that actually lists each individual account and the amount in it. It organizes the overall picture of every entity a business comes in contact with so that every important number can be put neatly into a financial statement.
The purpose of this assignment is to study the finance sources available to a company. Here according to the assignment requirement, we have to select a British public company to study the available sources of finance from where the firm collects its capital requirement. Following the guidelines we have to analyze various sources with their potentiality and then we make viable analysis of Cash and sales budget. Here some salient financial ratios are employed for the purpose of analyzing the financial statement of the company.
The role of the financial Manager in today’s business world has been rapidly changing. The change is fuelled by technology innovation in particularly, digital technology and increasing information processing power. Since the financial crisis in 2008, firms have been working to restructure their operations as a means of survival. This has led to the modification of many management roles, more so the role of the Chief Financial Officer (CFO). As a means for survival, firms started by cutting on costs, becoming more lean and efficient. However, today there is no more room for cutting on costs and firms have been looking to growth as a way to increase profitability. Growth comes with new uncertainties and challenges which financial managers have to consider when making their financial decisions. These new macroeconomic challenges facing the finance function include: Regulation, Globalization, Technology, Risk, Transformation, Stakeholder management, strategy, reporting, and Talent and capability.