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Assignment on financial accounting
 

Assignment on financial accounting

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    Assignment on financial accounting Assignment on financial accounting Presentation Transcript

    • Submitted By: AMIT ARORA
      Enrolment No: M090700005
      Dated: 16 Sep,2009
      Submitted To:
      Dr. ASHOK BHANSALI
      ASSIGNMENT
    • Information management has become a powerful resource and a large expense for many organizations.
      Helps in decision making at various levels.
      • Environmental management
      • Creation of slack resources
      • Optimum utilization of resources
      1.NEED FOR INFORMATION
    • Facility information model
      Plant information model
      Building information model
      Flow of information in an ORGANIZATION
      VERTICALLY
      HORIZONTALLY
      INFORMATION MODEL
    • Computer Age or Information Era
      Use of INTERNET - Digital Revolution
      INFORMATION AGE
    • Information management (IM)
      To control the structure & functioning of Org.
      understanding of the technology
      information management entails organizing, retrieving, acquiring and maintaining information
      practice of Data Management
      NEED
    • vast need for decision making
      prevent individuals from acting strictly rational
      access, collect and evaluate all environmental information
      decision at a reasonable price, i.e., time and effort
      design strategies for organization
      INFORMATION PROCESSING
    • Reduction of information processing needs
      Environmental management
      Creation of slack resources
      Creation of self-contained tasks
      Increasing the organizational information processing capacity
      Creation of lateral relations
      Vertical information systems
      Five main organization design strategies
    • formal records of the financial activities of a business, person, or other entity
      financial statements are often referred to as accounts
      an overview of a business or person's financial condition in both short and long term.
      2.FINANCIAL STATEMENTS
    • Balance sheet: reports on a company's assets, liabilities, and Ownership equity as of a given point in time.
      Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time.
      Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period.
      Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities.
      Four basic financial statements
    • Owners and managers require financial statements to make important business decisions
      Employees also need these reports in making collective bargaining agreements (CBA)
      Investorsmake use of financial statements to assess the viability of investing in a business.
      PURPOSE
    • Financial institutions use them to decide whether to grant a company with fresh working capital or extend debt securities
      Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes
      Vendors require financial statements to assess the creditworthiness of the business.
      PURPOSE
    • An Annual report is a comprehensive report on a company's activities throughout the preceding year.
      Gives shareholders and other interested persons information about the company's activities and financial performance.
      3.ANNUAL REPORT
    • Balance statement of financial position
      summary of a organization's balances
      Includes Assets, Liabilities & Ownership Equity
      Equity = Assets - Liabilities
      FIRST REPORT
    • Cash flow statement
      provide information on a firm's liquidity and solvency
      information for evaluating changes in assets, liabilities and equity
      indicate the amount, timing and probability of future cash flows
      SECOND REPORT
    • Income statement [(P&L) and Statement of Operations]
      The purpose of the P&L is to show managers and investors whether the company made or lost money
      Operating section
      Revenue
      Expenses
      THIRD REPORT
    • field of accountancy concerned with the preparation of financial statements
      fundamental need for financial accounting is to reduce principal-agent problem
      used to prepare accounting information for people outside the organization
      help managers make decisions to manage the business.
      4.FINANCIAL ACCOUNTING
    • Financial analysis is performed on statements to provide management with a more detailed understanding of the figures.
      statements are also used as part of management's annual report to the stockholders.
      Employees or labor union need these reports in discussing their compensation, promotion and rankings.
      ROLE
    • Financial analyses are often used by Investorsand are prepared by financial analysts, thus providing them with the basis for making investment decisions.
      Projectstakeholders
      a) Sponsor a project
      b) Have an interest in a project.
      Examples : customers, the user group, the project manager, the testers, etc.
      ROLE
    • MANAGERS
      Aims
      Formulating strategies
      Planning and constructing business activities
      Helps in making decision
      Optimal use of Resource (economics)
      Supporting financial reports preparation
      Safeguarding asset
      ROLE
    • CREDITORS
      It is a person or institution to whom money is owed
      Accounting classification
      Long-term liabilities
      'Long-term creditors'
      Current liabilities
      'Current creditors'
      ROLE
    • objective of financial statements is to provide information about the financial position
      useful to a wide range of users in making economic decisions
      Financial statements should be understandable, relevant, reliable and comparable
      ROLE
    • Media and the general public are also interested in financial statements for a variety of reasons
      describe management's performance and the company's financial highlights.
      effective way for corporations to communicate with individual shareholders.
      ROLE
    • INTERVIEW WITH Mr. MURTHY (Infosys)
      1. How important is financial reporting to a technology company?
      To understand the strategy of performance
      Single window for our investors to look into our operations and aspirations.
      To understand financial values of the company
    • 2. Philosophy of Infosys
      Under promise, Over Delivery
      3.Financial reporting as a part of business strategy.
      To assess the viability
      Helps customer to understand the strategy
      INTERVIEW WITH Mr. MURTHY
    • 4. Financial disclosure results in competitive disadvantage
      It should not create asymmetry of benefits
      We believe to disclose, when in doubt
      5. Summary of annual report to retail investors
      It is worthwhile for the company as well as for customers .
      INTERVIEW WITH Mr. MURTHY
    • INTERVIEW WITH Mr. MURTHY
      6. PRESSURE ON MANAGERS
      • Globalization & competition
      • Sharing with the investors
      7.EXPENSING STOCK OPTIONS
      • Do not dilute more than a certain %age
      • Benefit to investors
    • 8. Independent Directors
      • Corporate governance – minimization cost
      • Risk mitigation – to protect shareholders
      9. Quarterly reporting discourage risk
      • Profits in Long term investment
      • Investment will indeed bear fruit
      INTERVIEW WITH Mr. MURTHY
    • 10. Globalization / corporate governance in INDIA
      • Maximizing shareholder value
      • Transparency, fairness and accountability to stakeholders
      • Pressure to Benchmark
      • Market capitalization
      INTERVIEW WITH Mr. MURTHY
    • THANK YOU