Tag Archives | Financial Statements

Preparation of Financial State­ments | Company

The latest regulations regarding preparation of financial state­ments issued by IRDA are: 1. Cash Flow Statement (Common for All Insurers): Insurers will in addition to the earlier statutory and subsidiary books of accounts and statements, will have to prepare a receipts and payments account (cash flow statement). This statement must be prepared in accordance with […]

Classification of Balance Sheet Ratios | Accounting

In this article we will discuss about the classification of balance sheet ratios. They are:- 1. Current Ratio 2. Net Working Capital Ratio 3. Quick Ratio 4. Cash Position Ratio 5. Proprietary Ratio 6. Capital Gearing Ratio 7. Debt Equity Ratio 8. Reserves to Equity Share Capital Ratio 9. Solvency Ratio 10. Security Ratio. 1. […]

Limitations of Financial Statements | India | Accounting

In this article we will discuss about the limitations of financial statements of a company. Financial statements are based on historical costs and as such the impact of price level changes is completely ignored. They are interim reports. The basic nature of financial statements is historic. These statements are neither complete nor exact. They reflects […]

Financial Ratio Formulas | Accounting

Here is a list of some important financial ratio formulas. 1. Current Ratio = Current Assets/Current Liabilities 2. Net Working Capital Ratio = Net Working Capital/Net Assets 3. Quick Ratio = Quick Assets/Liquid Liabilities 4. Cash Position Ratio = (Cash + Marketable Securities)/ Liquid Liabilities 5. Proprietary Ratio = Shareholders’ Fund/ Total Asset (or) Total […]

Analysis and Interpretation of Financial Statements | India | Accounting

In this article we will discuss about the analysis and interpretation of financial statements of a company. Financial statements are prepared primarily for decision making. The statements are not an end in themselves, but are useful in decision making. Financial analysis is the process of determining the significant operating and financial characteristics of a firm […]

Funds Flow Statement: Importance and Limitations | Accounting

In this article we will discuss about the importance and limitations of funds flow statement.  Following are the uses of this which show its importance: 1. Fund Flow Statement determines the financial consequences of business operations. It shows how the funds were obtained and used in the past. Financial manager can take corrective actions. 2. […]

8 Main Users of the Financial Statements | Company

The following are the groups who like to make use of financial statements:- 1. Owners 2. Management 3. Creditors 4. Employees 5. Investors 6. Government 7. Consumers 8. Stock Exchange. User # 1. Owners: The owners provide funds or capital for the organisation. They possess curiosity in knowing whether the business is being conducted on […]

Components of Financial Statements | Company

In this article we will discuss about the components of financial statements.  The Balance Sheet shows the financial position or condition of the firm at a given point of time. It provides a snapshot and may be regarded as a static picture. The Income Statement or Profit and Loss Account reflects the performance of the […]

Why do we Need to Prepare Financial Statements?

Get the answer of: Why do we Need to Prepare Financial Statements? Financial Reporting Standards: Having discussed various stakeholders group of an entity, let us now turn to financial reporting system which facilitates the preparation and presentation of general purpose financial statements. International Financial Reporting Standards (IFRSs) have recently emerged as global financial reporting standards […]

Top 5 Elements of Financial Statements | Accounting

This article throws light upon the top five elements of financial statements. They are: 1. Assets 2. Liabilities 3. Equity 4. Income 5. Expense. Element # 1. Assets: Features of an asset: i. The future economic benefit embodied in an asset is the potential to contribute, directly or indirectly, to the flow of cash and […]

shopify traffic stats