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Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand.
Financial information would be useful to users if such qualitative characteristics are present. When producing financial statements, the following must comply: Fundamental Qualitative Characteristics: Relevance: Relevance is the capacity of the financial information to influence the decision of its users. The ingredients of relevance are the ...
Accounting, also known as accountancy, is the process of recording and processing information about economic entities, such as businesses and corporations. [1] [2] Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. [3]
Current assets allow companies and investors to assess if a firm can pay off its financial obligations. Companies that cannot keep up with short-term liabilities may stagnate, lose market share or ...
One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers. [2] In other words, management accounting helps the directors inside an organization to make decisions.
Financial analysts often assess the following elements of a firm: Profitability - its ability to earn income and sustain growth in both the short- and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations;
Financial statement analysis (or just financial analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions to earn income in future. These statements include the income statement , balance sheet , statement of cash flows , notes to accounts and a statement of changes in equity (if ...
The tools addressed and developed relate in the main to managerial accounting and corporate finance: the former allow management to better understand, and hence act on, financial information relating to profitability and performance; the latter, as above, are about optimizing the overall financial structure, including its impact on working ...