Tag Archives: #FinancialStatementReview

Are there any long-term liabilities (e.g., loans) on the showroom’s balance sheet?

Analyzing Long-Term Liabilities on a Showroom’s Balance Sheet When evaluating the financial health of a showroom or any business, understanding its long-term liabilities, such as loans, is crucial. These liabilities represent financial obligations that extend beyond the current accounting period. Because It can have a significant impact on both company’s operations and profitability. Let’s… Read More »

When financial statements are prepared?

f Financial statements Financial statements, these are typically prepared at regular intervals, usually at the end of an accounting period. The most common accounting periods are: 1. Monthly: Some businesses, especially smaller ones or those with more frequent financial reporting needs, prepare financial statement on a monthly basis. This allows for more frequent monitoring… Read More »

How to prepare financial analysis report?

Preparing financial analysis report Preparing financial analysis report: entails the examination and interpretation of financial information to evaluate a company’s performance and overall financial well-being. Here are the steps to prepare a financial analysis report: 1. Gather Financial Statements: Collect the financial statements of the business, including the balance sheet, income statement, and cash… Read More »

How to prepare financials of a company?

Process of completing financial statements

Preparing the financials of a company Preparing the financials of a company involves several steps. Here is a general outline of the process: 1.Collect and Organize Financial Data: Gather all relevant financial information, such as transaction records, bank statements, invoices, receipts, and other supporting documents. Ensure that the data is accurate, complete, and organized… Read More »

How to prepare provisional financial statements?

Provisional Financial Statements Preparing provisional financial statements entails the development of interim financial statements for a designated timeframe prior to the availability of the final statements. Here are the steps to prepare Provisionals financial statements: 1. Gather Available Data: Collect all available financial data for the period you want to prepare the pro visional… Read More »

What is nominal account?

Nominal Account In accounting, a nominal account is a general ledger account that is use to record revenues, expenses, gains, and losses for a specific accounting period. These accounts are also known as income statement accounts or temporary accounts. Because their balances are reset to zero at the end of each accounting period, typically a… Read More »

What are the different types of financial transactions and its effects to the assets, liabilities, and owners equity?

What are the different types of financial transactions and its effects to the assets, liabilities, and owners equity? Financial transactions are the backbone of any business’s accounting system. These transactions impact a company’s financial statements, affecting its assets, liabilities, and owner’s equity. Understanding these effects is crucial for accurate financial reporting and analysis. Types of… Read More »

What are some of the key differences in financial statement analysis versus stock/asset valuation techniques?

Difference between financial statement analysis and stock/asset valuation techniques It involves reviewing a company’s financial statements, such as its balance sheet, income statement, and cash flow statement, to evaluate its profitability, liquidity, solvency, and overall financial performance. This analysis helps investors and analysts to make informed decisions about whether to invest in the company or… Read More »

How are sundry expenses treated in a balance sheet?

How are Sundry expenses treated in a balance sheet Sundry expenses are generally treated as an expense in the income statement of a business and are deducted from the revenue earned to arrive at the net income or profit for the period. They do not appear as a separate item in the balance sheet. But… Read More »

Why is the general reserve treated as a liability in a balance sheet?

General reserve treated as a liability in a balance sheet General reserve treated as a liability in a balance sheet. Because it represents funds that have been set aside by a company’s management to cover potential losses or contingencies. It is a type of reserve created by appropriating a portion of the company’s profits and… Read More »