Finance Essay Example | Topics and Well Written Essays - 1750 words

Finance - render ExampleThus the profit of the company is obtained after subtracting the expenses from the total revenue. For eg The Profit and loss statement of an constitution shows the revenue and expenses of the company. Through the process of monetary statement analysis the real income and expenditure of an arranging arsehole be computed. Profit and Loss statement Profit and loss statement also known as the income statement of an organization is a summarization of the expenses, revenues and toll incurred during a specific time period. It helps the company and its stakeholders in detecting the item(s) for which the cost incurred has increased lowering the profit of the company.1 For eg Profit and loss statement includes items like cost of goods sold, interest expense, tax expense and operating expenses subtracting which from the total revenue, the dismiss profit is obtained. Liabilities The obligation of on organization that arises out of the past transactions is known as the liability of the company. The liability of a company whitethorn be in cash or in kind which is repayable both in brusk and long time span. For eg Accounts Payable, Interest Payable, Promissory notes payable, etc. argon part of the liabilities of a company. Invoices An invoice is a form of bill which is paid to the seller by the buyer of the product or services. The invoice contains the inside information of the quantities, product and the price agreed upon by both the seller and the buyer of the product.2 For eg An invoice is a sales invoice from the sellers side while it becomes a purchase invoice from the buyers side. Ledgers A ledger is a book of forecasts where the daily monetary transactions are recorded by debiting and crediting the accounts as per requirement. The entries made in the journal finally get transferred to a separate ledger account for the creation of the final accounts of a company. For eg Sales Ledger, Purchase Ledger, General ledger, etc. currency flow Cash flow is the movement of cash into or out of the business. Cash flow is used to compute the net present value, internal rate of return and the rate of return of a company. Thus the risk associated with the get word can be determined with the help of cash flow of a company.3 For eg Operational cash flow, investment cash flow and financing cash flow. Financial audit The financial audit is the verification of the financial statements of the company in tandem with the generally accepted accounting principles of the company. The purpose of financial audit of a firm is to increase the confidence of the stakeholders of the company who are intended to use the financial statements.4 For eg The financial systems that are audited are the final accounts of the company which include the income statement, the cash flow and the balance sheet of the company. Answer 2 Answer 3 A manager ensures that legislative requirements for financial management are compiled with to the extent of achieving the reckon targets agreed by the Australian Taxation Office whereby the costs are limited over which they hold control. The manager of the organization verifies the information obtained is relevant, cost-effective and appropriate in the light of applicability of the information in unknown circumstances. The elements included by the manger of the organiz