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Our goal is to partner with you and be relied upon as a contributing factor to your success. What does this mean? It means we are your help line. Anything to do with your business call us and either we can help or we can put you in touch with someone who will help you.
Our goal is to partner with you and be relied upon as a contributing factor to your success. What does this mean? It means we are your help line. Anything to do with your business call us and either we can help or we can put you in touch with someone who will help you.
Our goal is to partner with you and be relied upon as a contributing factor to your success. What does this mean? It means we are your help line. Anything to do with your business call us and either we can help or we can put you in touch with someone who will help you.
Understanding Financial Statements
Understanding financial statements is a task that many business owners often put aside to concentrate on something more interesting. This results in many business owners not really knowing what is going on with their business, especially the cashflow control within the business. Cash is the lifeblood of any business and it is the fuel that keeps the engine running. It is vital that business owners understand all there is to know about the flow of cash into their business and the flow of cash out of their business. The movement of cash is recorded within the financial statements. Financial statements are very useful as a tool to help in the management of the business. Financial statements are required by the business owners to understand how the business is performing. As well, there is normally a requirement to produce them for banks and investors. Preparing financial statements for taxation purposes should not be the priority - being of assistance in business growth is more important!
Financial statements concentrate on measuring profit or loss. They may then facilitate the preparation of cashflow reporting and Key Performance Indicators (KPIs) that enable meaningful management information for your business. The key components of financial statements are:-
- Departmentalised Trading Profit and Loss accounts with gross profit percentage calculations for each department
- Balance Sheet
- Supporting verification workpapers for each item in the Balance Sheet
- Source and Application of Funds Statement
- Debtors’ Aged Analysis
- Stock on Hand Analysis
- Work-in-Progress Analysis
- Creditors’ Aged Analysis
- Capital Expenditure Summary
- Bank Account Analysis
Preparation of financial statements on a regular periodic basis can contribute greatly to the management of a business. Some businesses find it very useful to produce a weekly performance report and detailed monthly financial accounts.
If you have any queries on any aspect of the interpretation of your financial statements, please do not hesitate to contact us.
For more information contact us for a copy of the paper “Interpretation Of Financial Accounts”.
Article provided by Acclipse Business Advisor and ESS BIZTOOLS Pty Ltd.
Key Numbers At A Glance
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Forecasts for
2010/11
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Projection
2011/12
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Projections
2012/13
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Projections
2013/14
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| GDP Growth |
3.25%
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4%
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3%
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3%
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| Inflation |
2.5%
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2.5%
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2.5%
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2.5%
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| Unemployment Rate |
5%
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4.75%
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5%
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5%
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| Forecast Deficit/Surplus |
$40.8B
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$13B
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$1B surplus
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$5.4B surplus
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| Net Debt |
$160B (11.4% of GDP)
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| Business Investment |
7.5%
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4%
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| Household Consumption |
3.5%
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4%
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The Federal Government's resources super profit tax is expected to contribute $12B over 4 years.
Article provided by Acclipse Business Advisor and ESS BIZTOOLS Pty Ltd.
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