...of a business finances, and to make sure the business is following legal and ethical standards. There are four elements to financial management; they are planning, controlling, organizing/directing, and decision making. Each of these plays a vital role in correctly reporting finances. Furthermore, there are principles in accounting for healthcare that help reiterate the reporting practices. Generally acceptable accounting principles or GAAP are certain guidelines that are used to make sure a business’s finances are reported properly. Hospitals may use some or all of them, but it is a guideline, not a requirement. One of the principles is the principle of sincerity. This means that when reporting financial activity, the accountant should sincerely picture post an accurate picture of revenue, expenses, and other monetary uses. For example, if a medical office is going bankrupt and needs a loan, if they are not sincere in their financial statements, they may lie in their records by showing they are making profit instead of being in debt. Another general principle is the principle of prudence. This means accountants should accurately put a clear picture of a company’s finances, and not try to make the companies funds seem greater than they are. This can also tie in to the principle of sincerity which was discussed previously. Principle of full disclosure is very important. It means a company must furnish all of its public records when requested. That will help clarify any misunderstandings...
Words: 956 - Pages: 4
...ASSIGNMENT COVER SHEET Course Name: | Edexcel BTEC Level 5 HND Business and Management | Assignment Name: | Managing Financial Resources and Decisions | Section 1: Understanding the Source of Finance Available to Business IDENTIFY THE SOURCES OF FINANCE AVAILABLE TO BUSINESS In order to set up a business the owner or business needs money to get it going, and in cases of established businesses, keep it growing. Business owners will usually use some of their own money coupled with other sources of finance to start their business. There are several ways to acquire financing and a few of them are personal capital and borrowing from friends, borrowing from a bank, factoring, invoice discounting, leasing, hire purchase and franchising. For larger companies they have the advantage of being able to sell shares to raise capital, they can also have large investors, and being able to ‘raise capital’, they can also retain earnings in order to use the money as cash flow for further developments in the company or for a particular project (this money belongs to shareholders). Companies who are already established can retain their profits for a period of time and use this money in the future for projects or business needs, this is usually shareholder dividend and ultimately belongs to the shareholders, but the company is using it to expand or better the business. The selling of company assets is also seen as a way of raising capital, however if you are selling off your assets...
Words: 3778 - Pages: 16
...sources of finance available to Phan 3 1.2 The implications of the different sources of finance to Phan 4 1.3 Appropriate sources of finance for Phan 6 2.1 The costs of different sources of finance for Phan 7 2.2 The importance of financial planning to Phan 9 2.3 The information needs of different decision makers 10 2.4 The impact of finance on the financial statements to Phan 12 CONCLUSION REFERENCES INTRODUCTION Finance is one of the essential elements for the existence of every business. It is not only associated with the activities but also the resource for business to implement functions. Therefore, for a started business enterprise, effectively understanding the sources of finance will help Phan perform well and develop sustainably in the market today. This report is performed to evaluate the different sources of finance as well as providing information on the implication of finance as a resource in the business. 1.1 THE SOURCES OF FINANCE AVAILABLE TO PHAN In the current market mechanism with the increasingly fierce competitions, enterprises must continuously improve plant and equipment as well as modernizing technology. In order to achieve all these factors, the enterprises must have a large enough financial resources and use them effectively. It is believed that source of finance is a significantly important prerequisite for business process of the enterprise in general and of Phan in particular. The new business enterprise of Phan will need finance to purchase...
Words: 3885 - Pages: 16
...Contents Introduction 1 Balance sheet Income statement Describe two principle financial statements their users, format, frequency and content 2 Financial accounting Management accounting Compare & contrast financial accounting and management accounting 3 Describe the relevance ,application and limitations of financial ratio analysis with reference to three types of users of financial statement 4 Conclusion 5 1. Introduction. -Finance is one of the most significant elements in order to succeed in business performance. Managers are able to decide ways how they will proceed their business and what extent they will broaden or minimize the scale of their business through various figures of finance. Also, those of things help shareholders to predict organisation's promising. Accounting is a basic tool in figuring out how entity spend asset and how they make a profit or how loss happens. Some specialists such as managers, shareholder, accountants use these information. In accounting, there are some methods of analysing how healthy company's financial statement is. Some types of useful ways will be introduced on this essay and will be explained why accounting and finance is a crucial factors of business. 2 .Describe two principle financial statements(their users ,format, frequency and content) Balance sheet : it is a summary of the financial position of the business. It mainly consists of three factors which are assets, liabilities...
Words: 1706 - Pages: 7
...statements help determine the financial status of any individual or business. For example, a business manager uses financial statements to make important decisions regarding their business. Individuals on the other hand use financial statements as a way to budget their finances and allowing them to make major decisions such as buying a house or purchasing a new car. The main purpose of this paper is to show how a balance sheet is important for an individual and a business. * Select either the balance sheet or income statement and explain how the use of it may be applied to you everyday life. One of the financial statements is the balance sheet. This summarizes a company’s or individual’s assets, liabilities and equity at a specific time. On a given date, I use a personal balance sheet. This statement lists my assets, my debts, and my wealth or equity. Assets are the things that I own. My assets are my checking account, saving accounts, my 401K, the value of my house and car. Now, the debts or liabilities are what I owe to others and creditors. My debts are my mortgage payments, utility bills, etc. Wealth is the abundance of valuable resources or material possessions. By using this financial statement, I can spend within my income limits and choose whether or not to purchase an item. Also, I can get an outline of my finances and determine if I am spending too much or increase my credit debt beyond what I can repay. Based on the results of the balance sheet, the strengths...
Words: 694 - Pages: 3
...Balance Sheet ExampleYour Balance Sheet Example is a quick view of the financial state of your business at a specific time period. | It outlines the Assets, Liability and Equity of your business. Your balance sheet should list your current assets such as the cash, accounts receivable, supplies, land, buildings and any other assets your business have.It should also list your Liabilities and Equities. Your liabilities should list things such as your accounts payables. Your equity should list things such as your capital. When you prepare your Balance Sheet you will need to list your assets down on one side and then you will list your liabilities on the other side.Assets are things your business has ownership of. Liabilities are the debts your business owes on. You need to make a note of what your business assets are and what your business liabilities are. Then you need to write them down. You need to balance your balance sheet.Balance Sheet Video | Download Our Financial Statement E-book that include sample;Income StatementsBalance Sheet StatementsCash Flow StatementsBalance Sheet Example Help...Balance Sheet Example Your Balance Sheet Example is a quick view of the financial state of your business at a specific time period. Balance Sheet Template Your Balance Sheet Template is a printable Template that shows you the basics to doing a Balance Sheet for your business.Sample Balance Sheet A Sample Balance Sheet will help you write a Balance Sheet for your business. It...
Words: 451 - Pages: 2
...Finance in the healthcare industry can be a very tricky subject. The primary role of finance in the health services is to plan for, obtain, and make use of resources to increase the productivity and value of the business (Nowicki 2007). Finance is a very important part of the health care industry. It keeps everything on track and in order so that things operate successfully. Without the right person(s) helping to operate the place of business the company can be in a great deal of trouble. When I think of finance I think of cash. In today’s economy cash flow is at its all time low. More people are trying to cut cost and much as they can. This means less doctor visits and sometime not going to the doctor at all. Which means that if your health care business is use to seeing a certain amount of patients and that number suddenly stops that can put some jobs at jeopardy. The role of finance has increased in the healthcare industry. Like I stated previously cash flow is at an all time low. With the high demands of hospitals, long term care, nursing homes, special practices and assisted living, the need for healthcare and funding is growing daily. There is a different age group that is being more catered to due to the aging population around. Funding is necessary for all levels of healthcare organizations, and there are some governmental hospitals/facilities, non-profit, and privately funded that need to be aware of the fast paced changes that are being made financially in the world...
Words: 1095 - Pages: 5
...Accounting Statements Bethany Edings Acct/290 January 25, 2013 Doyle Jones University of Phoenix Accounting Statements In business finance there are four main statements. The financial statements are balance sheets, income, cash flow, and statement of retained earnings. Each statement shows specific information about a business’s financial history. A balance sheet shows a company its current debts and how much it has at any given time. Income statements illustration what was spent and how much of a profit the business made. A cash flow statement shows the relationship between a company and the world during a given date. Next a statement of retained earnings indications any changes that would affect stockholders over time. A balance sheet gives information about a company’s assets, liabilities, and shareholders’ equity. Balance sheets have three components. The components of a balance sheet are assets, liabilities, and stockholders’ equity. Assets are objects or property that has cash value. These items can be used or sold to make a product or to provide services. Cash and investments are also assets. Liabilities are what a company owns to other companies or people. This can include loans, taxes, rent, cost of materials, and payroll. Liabilities are also services or products due to a customer. Shareholders’ equity or capital is what a company would have if the liquidated assets and paid...
Words: 729 - Pages: 3
...Introduction Balance sheet is a report on financials that summarize company’s assets, what the company owns, the liabilities of the company, what the company owes. Most Company’s still use balance sheet in the daily running of organization because it enables managers in knowing whether balance sheet balances out on both sides. This makes sense since the company must pay all things it uses such as the assets by borrowing money (liabilities) or getting the money from the shareholders that are the shareholders’ equity. Application of balance sheet to my daily life Balance sheet can help me to grasp the financial health in a given business organization and it also provides me with a snapshots for my potential investors and lenders (Hawkins & Turner, 2010). Whether the business is in debts or it considers the assets, a balance sheet can still help me to keep the tracks my current situations as well as how I can plan well for what will happen in coming years. Keeping of accurate balance sheet requires maintaining the outgoing records, for example, the assets plus liabilities at once using some strategies of balancing the checkbook, and also keeping my tracks on statements of the credit cards, as well as bank accounts (Spurga, 2004). Benefits of a business manager in understanding balance sheet Balance sheet in organizations helps the managers to know what is in the business (assets) also to know what is not in the business (liabilities). The balance sheet, on the other hand, provides...
Words: 675 - Pages: 3
...|University of Sunderland | |Managing Financial Resources andDecisions | | | | | | | | | | | | | | | | | | | | ...
Words: 7169 - Pages: 29
...LO1 Understand the sources of finance available to a Business Finance is the most vital thing to run the business. Companies operating as commercial entities must have sufficient cash balances to facilitate their smooth operations. Cash requirement can be raised from different sources, ranging from equity, various forms of debt, to internally generated funds through retained earnings which would otherwise be distributed to shareholders (Myers and Myers, 1991; J. Gitman, 1991). The sources of finance can be classified as Internal and External, Short-term and Long-term or Equity and Debt (Bromwich & Bhimani, 2009, pp.45). The two main sources of finance for business include internal and external sources. The business managers decide which form of financing to be used in the business (Klammer, 2003, pp.35). Internal Sources of Finance Personal funds - utilized by sole traders and partnerships. Owner takes on risk of losing their money. Family and friends - utilized by sole traders and partnerships. Friends can not only lose money but also harm relationships Selling assets - Dormant (unused) assets are typically sold. Selling of fixed assets that are currently in use may solve liquidity problems but create future production problems. Retained profit - Profits reinvested back into the business External Sources of Finance Share capital - limited companies selling shares. #1 way for limited companies to raise money and can provide up to billions. Venture capital - invest...
Words: 5525 - Pages: 23
...Determining Financial Viability Accounting and finance are closely related to a certain extent in which both deal with the financial aspects of a company. Accounting and finance work together in creating “a company’s budget or working capital analysis” (Wise-Geek, 2012, p. 1). Accounting involves recording of an organizations operations of a business as well as showing the information in the outline profit and loss accounts, which demonstrates the gain or loss of the organizations throughout the year. In addition, accounting includes provisions of a balance sheet replicating the monetary positions of a business at a specific time period. It should provide clear and precise figures about the proprietary and financial condition in a specific entity. Finance is a wider view and uses information, which is obtainable in the accounting area such as “profit and loss, balance sheet, and cash flow statement” (Parikh, 2011, p. 1) to decide upon financially linked judgments, for instance how to increase funds for upcoming plans of a business. These statements provide a valuable amount of information for a company. The statistics retained in these statements assists financial directors with analyzing past performance as well as future inclinations of a business. Both accounting and finance must be used together to make effective decisions for a company therefore, finance uses past statistics from the accounting aspect to formulate future decisions. In order to determine financial viability...
Words: 715 - Pages: 3
...INTRODUCTION As we are aware, finance is the lifeblood of business or it can be said as the most important part of all the business enterprises. To understand finance, you need to know the entire business indeed. Finance can be used for various reasons like expanding the business, investing and purchasing fixed assets like land and building, machinery so on. In order to survive in this competitive world every organisation need to have a good strength of finance available to their business or else they won't be able to survive in this world. Hence, it is very important to select the correct sources of finance available to the company. Finance can be in two types' external sources or internal sources. TASK ONE 1. SOURCES OF FINANCE AVAILABLE TO A BUSINESS Finance can be arranged from internal sources or external sources. External sources of finance are funds that come from outside the business. Here the business are getting loans from individuals or institutions that do have business relations directly e.g. banks. 1.1 Internal sources The main internal sources of finance for a start-up are as follows: Personal sources These are the most important sources of finance for a start-up, and we deal with them in more detail in a later section. As mentioned earlier, most start-ups make use of the personal financial arrangements of the founder. This can be personal savings or other cash balances that have been accumulated. It can be personal debt facilities which are...
Words: 6439 - Pages: 26
...1. Describe the nature of balance sheet or statement of financial position. The balance sheet is a financial report that is created from the trial balance. When preparing the balance sheet, the trial balance is used as a starting point. All trial balance accounts are aggregated into balance sheet elements. The balance sheet provides a snapshot of a company’s financial position on a given date. This report contains a total of all assets, liabilities and shareholders’ equity. The most important concept in the balance sheet is that the total assets should equal the total liabilities plus shareholders’ equity. On one side of the balance sheet all of the assets are listed. The other side of the balance sheet lists the liabilities and shareholders’ equity. Assets are considered to be all property or valuable rights that are owned by the company. Assets can include items such as property, cash, and inventory. Liabilities are the financial debts and obligations owed by the company. Items in the liability section can include accounts payable and long term debt. The shareholders’ equity is the difference between the total assets and total liabilities and represents the residual value of the company, after liabilities, to the shareholders’. The most common items shown in the shareholder’s equity section are common stock, preferred stock, additional paid-in capital, and retained earnings. 2. Describe the nature of income statement An income statement is the component of financial...
Words: 1000 - Pages: 4
...A REPORT ON BALANCE SHEET ANALYSIS OF LANKA BANGLA FINANCE LIMITED AND INTERNATIONAL FINANCE INVESTMENT AND COMMERCE BANK LIMITED Date of submission: 8th November 2015 Submitted to Farzana Lalarukh Associate Professor Department of Finance University of Dhaka Submitted by SL | Name | BBA ID | Remarks | 1 | Sifat sadia | 17-003 | | 2 | Barna Paul | 17-047 | | 3 | Maghla Hossain | 17-061 | | 4 | Saima Sultana | 17-069 | | 5 | Nawsina Arif | 17-085 | | Date of Submission: 8th November 2015 Department of Finance University of Dhaka Letter of Transmittal November 8, 2015 Farzana Lalarukh Associate Professor Department of Finance University of Dhaka Subject: Submission of Report on “Balance Sheet Analysis of LankaBangla Finance Limited and International Finance Investment and Commerce Bank Limited”. Dear Madam, It gives us enormous pleasure to submit the report on Balance Sheet Analysis of Bank and NBFI as per the Advisor’s instruction. We expect this report to be informative as well as comprehensive as per requirement. Working with such a topic was an inspiring experience for us. We believe that the knowledge and the experience we gathered will facilitate us a lot in our future career life. With our limited knowledge, we have tried our level best to prepare the report worthwhile. Your acceptance and appreciation would surely inspire us. For any further explanations about the report, we will be gladly available to clarify the ins and outs. Sincerely, Sifat Sadia...
Words: 5474 - Pages: 22
