external users by providing them with generalpurpose financial statements. b. General-Purpose Financial Statement—statements that have broad range of purposes which external users rely on. 2. Internal Information Users—those directly involved in managing and operating an organization. a. Managerial Accounting—is the area of accounting that serves the decision-making needs of internal users. b. Internal Reports—not subject to same rules as external reports. They are designed with special needs of external
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Case Summary • Problem Statement • ROFE & Capital Budgeting • Incredible Incremental • Analysis Options • Cash Flows • Recommendations Case Summary • General Foods is a large corporation organized by Product Lines. • Super is a proposed new instant desert, based on a “flavored, water-soluble, agglomerated powder.” • General Foods has numerous projects with strict criteria to judge worthiness. • There are basically three types of Capital Investment proposals at General Foods: Safety, Quality
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method for the cash flow statement. The key issues to be discussed in this assignment is about whether the option of using the indirect method of cash flow reporting is beneficial to the users of general purpose financial reports in Australia. Furthermore, the reasons for harmonization, accounting standard AASB 107 Statement of Cash Flows and the Conceptual Framework will also be discussed. In AASB 107, cash flow is defines as inflows of the cash and cash equivalents and ‘cash’ as cash on hand and
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financial statements: the income statement, the capital statement, the balance sheet, and the statement of cash flows. Naturally, you begin by studying those four financial statements and the accounting processes that lead to their creation. Those processes include recording financial transactions in journals and then posting to the general ledger. In this first week, you learn the purpose of those four statements, what the financial statements include, and how the financial statements are constructed
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activities. Dividends, if cash, is shown in the financing section. | GENERAL rules for the Statement of Cash Flows (Indirect Method) Cash provided by op. activities: Net Income (from Income Statement) + Depreciation, amortization, and/or depletion (From Income Statement) + Decrease in CURRENT Asset accounts other than cash (calculate the difference between this period and last period from Balance Sheet) - Increase in CURRENT Asset accounts other than cash (calculate the difference between
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CHAPTER 2 FINANCIAL STATEMENTS, TAXES, AND CASH FLOWS Learning Objectives LO1 The difference between accounting value (or “book” value) and market value. LO2 The difference between accounting income and cash flow. LO3 How to determine a firm’s cash flow from its financial statements. LO4 The difference between average and marginal tax rates. LO5 The basics of Capital Cost Allowance (CCA) and Undepreciated Capital Cost (UCC). Answers to Concepts Review and Critical Thinking Questions
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Reporting and Analysis REVIEW Financial statements are the most visible products of a company’s financial reporting process. The financial reporting process is governed by accounting rules and standards, managerial incentives, and enforcement and monitoring mechanisms. It is important for a user of financial information to understand the financial reporting environment along with the accounting information presented in financial statements. In this chapter, the concepts underlying financial
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Executive summary Cash Flow Statement and Disclosure are potentially significant means for management to communicate company’s performance and governance to outside investors. Demand for Cash Flow Statement and disclosure arise from information asymmetry and agency problem between owners and management. The 1st chapter of this report is Introduction. It remain Origin of the project and thesis work, Background of the Report, Objective of the report, General objective, Project objective, Scopes,
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DECISION AND CASH FLOWS A positive net present value (NPV) is a direct estimate of value creation for shareholders and is an operational way of carrying through on the strategy of trying to maximize shareholder wealth. To calculate NPV, however we need to estimate the cash costs and benefits of any decision at hand. In this note we discuss the evaluation of investment proposals. Cash Flows: Basic Concepts The cash flows that we will use in our analysis are incremental after-tax cash flows. The incremental-cash-flow
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Financial Accoun0ng Informa0on • For external users (investors) and managers. • Used by investors to make decisions to buy, sell, or hold shares of a company. • Annual report and its financial statements. – Common rules used so investors can compare with other companies’ financial statements. – No “tailor‐made” informa3on 1-5 Management Accoun0ng Informa0on • For internal users such as president, marke3ng manager, produc3on manager, etc. • Used for three management func3ons:
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