Overview Of Accounting
Overview of Accounting Assignment
The information provided in this paper will be retrieved from various sources and cited in the text of this paper. This paper will be informative to a small group of business owners explaining the financial statement and managerial reports plus identify the audiences and the purpose of financial statement. Financial statement consists of balance sheet, income statement, and cash flow statement which will be explained in this paper in detail. An audience is defined as a group of people who participate in the financial development in many manners. The audience for this discussion will be financial managers, Securities Exchange Commission (SEC), investors, and Chief Executive Officer although there are many audiences or organizations that will be interested in a company financial statement. Additionally, competitors are interested in financial statement to predict a company's direction, shortcomings, and innovation in order to get an advantage.
According to Harper (2007), the balance sheet is a financial statement that summarizes a company's assets, liabilities and shareholders equity at a specific point in time. These three balance sheet segment give investors an idea as to what the company owns and owes as well as the amount invested by the shareholders. The reason balance sheets are called a balance sheets because the two sides balance out which are a company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from the shareholders (shareholders' equity). Additionally, the balance sheet is one of the most important pieces of financial information issued by a company and is a snapshot of what a company owns and owes at that point in time. Block and Hirt (2005) conclude that all ratios profitability, liquidity, assets and debt utilization ratios relate to the balance sheet assets which are compared to the industry standard to determine the health of...
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