Financial statements tell investors information about an organization’s financial performance, helping to ensure corporate transparency and accountability. But they can also be used internally to help management make strategic decisions, improve upon past results and add value. There are three parts to comprehensive financial reporting under U.S. Generally Accepted Accounting Principles (GAAP) — each with a unique message.
Many people focus on earnings, which are reported on the income statement (also known as the profit and loss statement). This statement provides an overview of revenue, expenses and earnings over a given period.
A common term used when discussing income statements is “gross profit,” or the income earned after subtracting the cost of goods sold from revenue. Cost of goods sold includes the cost of labor, materials and overhead required to make a product. Another important term is “net income.” This is the income remaining after all expenses (including taxes) have been paid.
Though it may be tempting to just review revenue and profit trends, thorough due diligence looks beyond the income statement. Growth and profitability aren’t the only metrics that matter. For example, high-growth companies that report healthy top and bottom lines may not have enough cash on hand to pay their bills.
The balance sheet (also known as the statement of financial position) provides a snapshot of the company’s financial health. It tallies assets, liabilities and equity.
Under GAAP, assets are reported at the lower of cost or market value. Current assets (such as accounts receivable or inventory) are reasonably expected to be converted to cash within a year, while long-term assets (such as plant and equipment) have longer lives. Similarly, current liabilities (such as accounts payable) come due within a year, while long-term liabilities are payment obligations that extend beyond the current year or operating cycle.
Intangible assets (such as patents, customer lists and goodwill) can provide significant value to a business. But internally developed intangibles aren’t reported on the balance sheet. Intangible assets are only reported when they’ve been acquired externally.
Owners’ equity (or net worth) is the extent to which the book value of assets exceeds liabilities. If liabilities exceed assets, net worth will be negative. However, book value may not necessarily reflect market value. Some companies may provide the details of owners’ equity in a separate statement called the statement of retained earnings. It details sales or repurchases of stock, dividend payments and changes caused by reported profits or losses.
Statements of cash flows
The cash flow statement shows all the cash flowing in and out of your company. For example, your company may have cash inflows from selling products or services, borrowing money and selling stock. Outflows may result from paying expenses, investing in capital equipment and repaying debt.
Typically, cash flows are organized in three categories: operating, investing and financing activities. The bottom of the statement shows the net change in cash during the period. Watch your statement of cash flows closely. To remain in business, companies must continually generate cash to pay creditors, vendors and employees.
Financial reporting is more than an exercise in compliance with accounting rules. Financial statements can be a valuable management tool. However, to get a holistic assessment of your organization’s performance, it’s important to look beyond profits. Contact us for help preparing these statements and benchmarking your organization’s performance over time and against competitors.
Taarifa za kifedha kuwaambia wawekezaji habari kuhusu utendaji wa kifedha wa shirika, kusaidia kuhakikisha uwazi wa ushirika na uwajibikaji. Lakini pia inaweza kutumika ndani ya kusaidia usimamizi kufanya maamuzi ya kimkakati, kuboresha juu ya matokeo ya zamani na kuongeza thamani. Kuna sehemu tatu kwa ripoti ya kifedha ya kina chini ya U.S. Generally Accepted Accounting Principles (GAAP) - kila mmoja na ujumbe wa kipekee. Watu wengi hukazia fikira mapato, ambayo yanaripotiwa kwenye taarifa ya mapato (inayojulikana pia kama taarifa ya faida na hasara). Taarifa hii hutoa muhtasari wa mapato, gharama na mapato kwa kipindi fulani. Neno la kawaida kutumika wakati wa kujadili taarifa ya mapato ni "faida ya jumla", au mapato yanayopatikana baada ya kuondoa gharama ya bidhaa kuuzwa kutoka mapato. Gharama ya bidhaa kuuzwa ni pamoja na gharama ya kazi, vifaa na gharama za juu zinahitajika kufanya bidhaa. Neno jingine muhimu ni <unk>mapato ya usawa.<unk> Hii ni mapato yanayobaki baada ya gharama zote (ikiwa ni pamoja na kodi) zimelipwa. Ingawa inaweza kuwa kuvutia tu kukagua mapato na faida mwenendo, makini kwa uangalifu inaonekana zaidi ya taarifa ya mapato. Ukuaji na faida si vipimo tu ambavyo ni muhimu. Kwa mfano, kampuni zenye ukuaji wa juu ambazo zinaripoti juu na chini ya afya zinaweza kuwa na pesa za kutosha kulipia bili zao. Usawa (pia inajulikana kama taarifa ya hali ya kifedha) hutoa picha ya afya ya kifedha ya kampuni. Inaonyesha mali, madeni na usawa. Chini ya GAAP, mali ni kuripotiwa kwa chini ya gharama au thamani ya soko. Mali ya sasa (kama vile akaunti za kupokea au hifadhi) inatarajiwa kwa busara kubadilishwa kuwa fedha ndani ya mwaka, wakati mali ya muda mrefu (kama vile mmea na vifaa) zina maisha ya muda mrefu. Vivyo hivyo, madeni ya sasa (kama vile akaunti zinazopaswa) zinapaswa ndani ya mwaka, wakati madeni ya muda mrefu ni majukumu ya malipo ambayo yanaenea zaidi ya mwaka wa sasa au mzunguko wa uendeshaji. Mali zisizo za kimwili (kama vile hati miliki, orodha ya wateja na goodwill) zinaweza kutoa thamani kubwa kwa biashara. Lakini intangibles maendeleo ya ndani si taarifa juu ya usawa wa fedha. Mali zisizo na umbo zinaripotiwa tu wakati zimepatikana nje. Wamiliki'mwenyewe (au thamani ya usawa) ni kiasi ambacho thamani ya kitabu ya mali inazidi madeni. Ikiwa madeni yanazidi mali, thamani ya usawa itakuwa hasi. Hata hivyo, thamani ya kitabu inaweza si lazima kuonyesha thamani ya soko. Baadhi ya makampuni inaweza kutoa maelezo ya wamiliki 'equity katika taarifa tofauti aitwaye taarifa ya mapato yaliyowekwa. Ina maelezo ya mauzo au buybacks ya hisa, malipo ya gawio na mabadiliko yaliyosababishwa na faida au hasara taarifa. Taarifa ya mtiririko wa fedha: Taarifa ya mtiririko wa fedha inaonyesha fedha zote zinazotiririka ndani na nje ya kampuni yako. Kwa mfano, kampuni yako inaweza kuwa na mapato ya fedha kutoka kwa kuuza bidhaa au huduma, kukopa pesa na kuuza hisa. Outflows inaweza kutokea kutoka kulipa gharama, kuwekeza katika vifaa vya mtaji na kulipa deni. Kwa kawaida, mtiririko wa fedha umepangwa katika makundi matatu: shughuli za uendeshaji, uwekezaji na fedha. Chini ya taarifa inaonyesha mabadiliko ya usawa katika fedha wakati wa kipindi. Angalia kwa makini taarifa yako ya mtiririko wa pesa. Ili kubaki katika biashara, makampuni lazima daima kuzalisha fedha kulipa wakopeshaji, wauzaji na wafanyakazi. Ripoti za kifedha ni zaidi ya mazoezi ya kufuata sheria za uhasibu. Taarifa za kifedha zinaweza kuwa chombo muhimu cha usimamizi. Hata hivyo, ili kupata tathmini ya jumla ya utendaji wa shirika lako, ni muhimu kuangalia zaidi ya faida. Wasiliana nasi kwa msaada wa kuandaa taarifa hizi na benchmarking utendaji wa shirika lako kwa muda na dhidi ya washindani.