Ayah Eca

Working capital is vital to a business. They have to have funds available to pay their day to day bills, wages and so on. The working capital is made up of the current assets net of the current liabilities . It is very important to a company to manage its working capital carefully. This is particularly true where there is a substantial time lag between making the product and receiving the money for it. In this situation the company has paid out all the costs associated with making the product (labour, raw materials and so on) but not yet got any money for it. They must therefore ensure they have enough cash to do this. The way working capital moves around the business is modelled by the working capital cycle . This shows the cash coming into the business, what happens to it while the business has it and then where it goes. A simple working capital cycle may look something like:- Between each stage of this working capital cycle there is a time delay...

Hopefully this is an obvious question as I am sure the quantity of it you have is important to you. In much the same way it is important to a business. However, in a business the term cash may have a broader meaning than it does to you as an individual. Cash is an asset to the business and is usually considered to be one of the current assets. The other current assets are stocks and debtors . Under the heading cash on the balance sheet may be included a number of items of varying liquidity. A small amount may actually be cash (or readies) held in tills or as petty cash, but the majority is likely to be held in various bank accounts. However, since money in current accounts rarely earns interest, if a business has a surplus of cash it may invest it in various ways. Some will have to be in very liquid accounts so that if necessary they can get at it very quickly, but some may be tied up for longer periods of time. As with the debtors, the amount of cash required ...

This series of notes looks at the balance sheet and profit and loss account, providing definitions and associated theories. The Balance Sheet What are Current Assets? What are Stocks? Stock Control Methods Stock Turnover Ratio What are Debtors? Debt Control and Debt Collection Period What is Cash? Liquidity, Investment and Cash Flow What are Current Liabilities? Current and Acid Test Ratio What are Long Term Liabilities? Debentures, Mortgages and Long Term Loans What is Working Capital? Working Capital Cycle What are Net Assets? Theories and Further Information about Net Assets Profit and Loss Account What is Sales Revenue? What is Cost of Goods Sold? What is Operating Profit? What is Interest Payable? Profit Margin What are Dividends Payable? Theories and Further Information about Dividends Payable What is Reported Dividend per Share? Dividend Cover Ratio What is Reported Earnings per Share? What is Shareholder's Equity? Theories and Further Information about Shareholder...

This series of notes looks at the balance sheet and profit and loss account, providing definitions and associated theories. The Balance Sheet What are Current Assets? What are Stocks? Stock Control Methods Stock Turnover Ratio What are Debtors? Debt Control and Debt Collection Period What is Cash? Liquidity, Investment and Cash Flow What are Current Liabilities? Current and Acid Test Ratio What are Long Term Liabilities? Debentures, Mortgages and Long Term Loans What is Working Capital? Working Capital Cycle What are Net Assets? Theories and Further Information about Net Assets Profit and Loss Account What is Sales Revenue? What is Cost of Goods Sold? What is Operating Profit? What is Interest Payable? Profit Margin What are Dividends Payable? Theories and Further Information about Dividends Payable What is Reported Dividend per Share? Dividend Cover Ratio What is Reported Earnings per Share? What is Shareholder's Equity? Theories and Further Information about Shareholder...

The objective of this research is to test and provide empirical evidence about accrual-based and cash flow-based financial ratios used to developt model of bankruptcy prediction early and compare accuracy of both model in classification of firm's financial situation in the future. ata of the study are financial statement of all company listed in Jakarta Stock Exchange in 1999-2000 for estimation sample and in 2001 for validation sample, excluded financial and banking firm. The statistics method used to test hypotheses one is two-group discriminant analysis, while hypotheses two tested by using examination of Chi-Square The empirical result indicate that accrual-based and cash flow-based financial ratios have ability to predict firm's financial situation in the future early. And so it is with result of examination of hypotheses two indicating that accrual-based bankruptcy prediction model differ and have ability of classification of firm's financial situation in the fut...

The Creditors' Ledger The Debtors' Ledger The Cash Book The General Ledger All of the ledgers contain "accounts". These "accounts", just like bank accounts are either in credit or in debt. For Pepe's Pizza Parlour, when Pepe has money in his bank account then the bank owes Pepe money. In this case Pepe is the bank's creditor and the bank is his debtor. In fact Pepe is overdrawn and has an arranged overdraft. Pepe owes the bank money. In this case Pepe is the bank's debtor and the bank is Pepe's creditor. Every party with which Pepe's Pizza Parlour has a transaction has an "account" with the business i.e. people who Pepe buys goods from and people who Pepe sells goods to. In addition there are accounts to represent how much equipment the business owns, expense accounts to cover the day to day exp...

You have already seen examples of the types of accounts held in each of the ledgers. You now have to think of the business as nothing else but a collection of accounts. Some of these accounts owe the business money and some of them are owed money by the business. All of the accounts must balance. At any one time the total value of the accounts in credit must equal the total value of the accounts in debt. When the business makes any transaction at all money is moved from one account to another. If for example Pepe makes a payment of £200.00 for some flour which he purchased from Alberto's wholesalers then Alberto's account is debited by £200.00. Alberto is the receiver of money and the transaction is therefore entered on the debit side. (Remember the principle; Debit the receiver, credit the giver.) Alberto's Account DR CR De...

When a company grows, the growth may be either organic or inorganic. Organic growth means that the company itself has grown from its own business activity, while inorganic growth means that the company has grown by merger or take-over. Organic growth is also sometimes known as internal growth and inorganic as external growth. Companies may want to grow for various reasons: To gain economies of scale To spread risk - diversification can often help spread risk To gain market share To increase profits and therefore returns for shareholders Source: http://www.bized.co.uk/

The profit and loss account differs significantly from the balance sheet in that it is a record of the firm's trading activities over a period of time whereas the balance sheet is the financial position at a moment in time. The profit and loss account looks at how well the firm has traded over the time period concerned (usually the last 6 months or year). It basically shows how much the firm has earned from selling its product or service, and how much it has paid out in costs (production costs, salaries and so on). The net of these two is the amount of profit they've earned. In essence this is what the P and L account shows, it just shows it in more detail! A profit and loss account would usually be made up as follows: £ million Turnover (sales revenue) 500 less Cost of goods sold (200) Gross profit 300 less other costs @ (100) Trading / operating profit 200 **** Profit for shareholders (dividends) 75 Retained profit 125 @ These other costs may include mar...

The profit and loss account differs significantly from the balance sheet in that it is a record of the firm's trading activities over a period of time whereas the balance sheet is the financial position at a moment in time. The profit and loss account looks at how well the firm has traded over the time period concerned (usually the last 6 months or year). It basically shows how much the firm has earned from selling its product or service, and how much it has paid out in costs (production costs, salaries and so on). The net of these two is the amount of profit they've earned. In essence this is what the P and L account shows, it just shows it in more detail! A profit and loss account would usually be made up as follows: £ million Turnover (sales revenue) 500 less Cost of goods sold (200) Gross profit 300 less other costs @ (100) Trading / operating profit 200 **** Profit for shareholders (dividends) 75 Retained profit 125 @ These other costs may include mar...

The balance sheet is one of the financial statements that limited companies and PLCs produce every year for their shareholders. It is like a financial snapshot of the company's financial situation at that moment in time. It is worked out at the company's year end, giving the company's assets and liabilities at that moment. It is given in two halves - the top half shows where the money is currently being used in the business (the net assets), and the bottom half shows where that money came from (the capital employed). The value of the two halves must be the same - capital employed = net assets, hence the term balance sheet. The money invested in the business may have been used to buy long-term assets or short-term assets. The long-term assets are known as fixed assets, and help the firm to produce. Examples would be machinery, equipment, computers and so on, none of which actually get used up in the production process. The short-term assets are known as current assets - a...

The balance sheet is one of the financial statements that limited companies and PLCs produce every year for their shareholders. It is like a financial snapshot of the company's financial situation at that moment in time. It is worked out at the company's year end, giving the company's assets and liabilities at that moment. It is given in two halves - the top half shows where the money is currently being used in the business (the net assets), and the bottom half shows where that money came from (the capital employed). The value of the two halves must be the same - capital employed = net assets, hence the term balance sheet. The money invested in the business may have been used to buy long-term assets or short-term assets. The long-term assets are known as fixed assets, and help the firm to produce. Examples would be machinery, equipment, computers and so on, none of which actually get used up in the production process. The short-term assets are known as current assets - a...

by Ken Delaney-Moore, Sheffield Hallam University Aims: This worksheet deals with: 1. Balancing-off accounts 2. Preparing trial balances After having completed the worksheet you should be able to explain both of these points. When you are done, please fill-in the on-line evaluation form in order for us to monitor the quality of the materials we provide for you. Tell us what we're doing right and wrong. It takes very little time, and your opinions are valued - thank you. Balancing - off accounts Look at the following 'cash' account: Debits £ Credits £ 1 8 Capital 2000 2 8 Bank 1500 4 8 Sales 150 3 8 Purchases 300 7 8 Sales 140 5 8 Creditor - K.Lucas 180 6 8 Motor expenses 130 Q1. The 'balance' on this account is the difference between the totals of the debit and credit values. Enter this figure in the space provided (Don't use a £ sign). (Type your answer) Q2. If this account were a pair of scales, and the values ...

Students of Book-keeping / Accounting at any level (from RSA up to first-year degree) should benefit from attempting these exercises. But be sure to check your course syllabus for relevance first. The exercises are interactive and you can ask for hints, mark your work or ask for an explanation after you have answered. Do I need any prior accounting knowledge? If you are studying for an examination, then ideally you should be enrolled on some form of formal course at a College or University. At the very least you should be using a textbook recommended by the examining body whose course you are studying. But if you're NOT on a course, you could have a go at the worksheets anyway - you have nothing to lose! Please give us the feedback we need The worksheets and assessments have been prepared for 'Biz/ed' by Ken Delaney-Moore of Sheffield Hallam University as part of a development project. A vital part of this project is to monitor...

Once the accounts have been done, and are ready to be published. A number of people might want to compare them with other companies operating in the same financial sector. How do they do this? The answer is to use profitability, solvency and performance ratios. These are quite simple formulae which help to create a picture of the company. This worksheet identifies the name of the ratio, the formula, where we should be looking in the accounts and what it means. These ratios are not by themselves the answer to all questions, but an indicator of areas requiring further examination. Try some out! Have a go with the figures from Pepe's Pizza Parlour. Please note: The / symbol means divide by. Profitability How successful a company is depends upon its profitability. The key ways in which we work out these are called the Return on Capital Employed and the Gross and Net Profit Margins. Return on...

Accounting Theory This article will help you understand an important distinction in accounting and bookkeeping- the difference between a credit and debit. When you deposit money in the bank, the cashier will tell you "I'll credit your account." From that experience, most people assume that cash is a credit, and so credits are good. That is further reinforced when reductions in the accounts are referred to as debits. Besides, if you remove the "i" from debit, you get "debt." So, debits are bad. Unfortunately, the conditioning we receive at the bank is causing real confusion in the accounting class. Why? Because in accounting we understand that the bank account is a debit account, and that debts are credit accounts - the opposite of what most people expect. In fact, debits and credits are neither good nor bad. Each transaction, whether it be a good transaction (deposits), or a bad transaction (bills) has both a debit and an equal credit. That...

Basic Accounting Model: Assets = Liabilities + Owners Equity Assets: The following are examples of items classified as assets: · Cash · Notes Receivable · Accounts Receivable · Prepaid Expenses · Land · Buildings · Equipment, Furniture and Fixtures Liabilities: The following are examples of items classified as liabilities: · Notes Payable · Accounts Payable · Accrued Liabilities T-Account Basics: Accounting is based on a double entry system which means that we record the dual effects of a business transaction. Therefore, each transaction affects at least two accounts. Debit: An entry affecting the left side of a T-Account. Credit: An entry affecting the right side of a T-Account. Increases in assets are recorded on the left side (debit) of the account. Decreases in assets are recorded on the right side (credit) of the account. Increases in liabilities and owners equity are recorded as a (credit). Decreases in liabilities and owners equity are recorded as a (debit). Accounting Terminolo...

The accounting cycle and the fiscal year are the plain meat and potatoes of the accounting system, and the manner in which it operates. The reasons for an accounting, the control of the accounting system, and the successful operation of a business all come down to this thing known as the accounting cycle and the boundary of operation known as the fiscal year. The accounting cycle, explained means that there are seven basic steps involved in the accounting process, or cycle. They are constants, regardless of your business type, the number of employees you have, or even your unique business needs associated with the accounting system. The seven basic steps must be performed each and every time data is manipulated, reported, and used in a business. The first step is to analyze and record transactions in a journal. This means that every time a transaction of financial value occurs, it must be recorded in a journal. There are several different journal types, but there is a type to ...