Managing A Firm Based On Past Oriented Financial Statements

Managing A Firm Based On Past Oriented Financial Statements
1 Introduction
1.1 Background
Increasing attention is being paid to narrative reporting or the 'front end' of the annual report. All
companies are currently required to prepare a directors' report containing certain basic information.
the investors face difficulty when pursuing to anticipate the future of a firm based on past–oriented
financial statements. Forward–looking information is essential for the investors, as their decisions
are largely determined by the future prospects of a company. Forecasting is, however, an intricate
process, which is further impeded by the information asymmetry between investors and the
company‟s management.
Investor–oriented reporting became the central theme as the International Financial Reporting
Standards (IFRS) took effect on January 1st, 2005. The aim of the new standards was to improve the
financial statements‟ quality, comparability, and transparency, which meant major changes to the
reporting of European companies (Daske et al., 2008). It was expected that along with IFRS and the
rapidly changing business environment, the reporting would adapt from the traditionally backward–
looking and numerical information towards a more forward–looking and non–financial disclosure.
The harmonization of reporting practices continued in the European Union with the adoption of the
Transparency Directive on January 20th, 2007, which set the minimum standards on periodic
financial reporting for all issuers of securities. Despite the efforts towards
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Financial Statements Of A Firm
Introduction Financial statements of a firm has many important pieces to it to make the finally
outcome. When a firm does a financial statement they have to include the income statement, balance
sheets, and the statement of cash flow. When the statement of finance is complete the results will
reveal what the company have been doing from one period to another. Throughout the report
information about the financial statements and the different parts that bring it all together will be
discussed. The more financial information known about a firm the better it is when time for
investors to invest. It's also a way for owner's to be aware of the condition the firm is in.
Reviewing a Firm's Financial Statements
Many parts play a role in a firm's financial statement and making sure everything is correct. There
are many people that take part in keeping the firm's financial statements in order and information
correct on them. From the managers in the firm to the owners and lenders there is a hand in the
finances. Some of these things are the income statement, balance sheet, and statement of cash flows.
All three play a valuable role in a firm's financial statement. Income statement shows the expenses
incurred and revenues generated by the firm over an accounting period. Some major types of
expenses that are shown on a typical income statement are revenue, cost of goods sold, gross profit,
operating income, income before taxes, earnings per share, and net income. The

Financial Statement Analysis : Financial Assessment And...
INTRODUCTION Different segments of the general public are keen on data about the present
budgetary positions and future prospects of business undertakings. Presently the people perhaps
straightforwardly identified with the enterprise, or they may be keen on securing relations with the
same instantly. Their essential target is to choose whether they will keep up, reinforce, or break their
current relations with the business undertakings.
Various proclamations readied toward the end of each bookkeeping period to survey Financial
Activities and Financial position of a worry are altogether called Financial Statements. They consist
of the following:
Income Statement
Balance Sheet
Cash Flow Statement
Fund Flow Statement
On the premise of the data uncovered in Financial Statements, clients of these come to think about
the development, productivity, dissolvability, and monetary quality of an undertaking.
Monetary Statement Analysis is an investigation which discriminatingly looks at the relationship
between different components of the Financial Statements with a perspective to acquire vital and
compelling data from these. It a methodology of filtering Financial Statements for assessing the
relationship between the things as revealed in these. It is fundamentally a posthumous of the value–
based exercises of a venture as unveiled in the Financial Statements in order to judge operational
capacity, capacity, gainfulness, dissolvability, managerial effectiveness and

Financial Statements And The Financial Statement
Financial statements have several key components and specific criteria into them to relay the
detailed information for auditors and management. A deeper look into financial statements and the
many concepts surrounding them are needed to explain in more detail. It's also important to
recognize the Auditor's opinion letter, balance sheet, operating statement, statement of changes in
net assets, and statement of cash flows and footnotes of their involvement in the process. Relevant
accounting articles are a useful supplement to financial statements and how they enhance concepts
in the financial statement. The meaningful uses of financial statements for health care organizations
are the epitome of current and future success of financial health.
Asset Arrangement: Most to least Liquid
Assets in the financial statement are always required and show useful information to investors and
understand where the information comes from. For instance, accounts receivable net which the
organization does not expect to collect all of the money it is due from all patients and insurers,
(Finkler, S.A., Ward, D.M. & Calabrese, I.D., 2013). The bad debts become about of the money due.
Furthermore, accounts receivables, net represents gross charges less an allowance for poor debts,
and many contractual allowances established with those third party payers. Typically, an example of
a bad debt would show charges of a large sum of money delivered from a hospital. Then, the
contractual allowances from

Financial Report On Financial Statements
Financial statements (or reports) are extremely important for a company, and these statements need
to be kept on hand to have financial information readily available to show the company's overall
financial status for each time period. A financial statement is a brief summary of the current or
previous financial position and performance of a company (Kumar, 2011). The financial report is
prepared to give an overall understanding of the financial status of a company without having to
check through all of the company's receipts of transactions. The four main financial statements are
the balance sheet, income statement, statement of retained earnings (owner's equity), and the
statement of cash flows (Four, 2015).
The balance sheet is a very detailed imagine of the overall health of a company's financial system
for a specific date or time period (i.e., quarterly, bi–annually, or semi–annually). The major types of
expenses that are commonly found on a typical income statement are the assets, liabilities, and net
worth of owner's equity (i.e., stocks or stockholders). An asset is something that the business or
company physically owns and also pertains to the liquid cash, accounts receivable, and inventories.
A liability by definition is a legal debt or obligation that a company incurs through normal working
conditions (Liability, 2015). Items that are found on this portion of the balance sheet would be the
accounts payable, deferred revenues, and accrued expenses. The last

Aggreko PLC Financial Statement Analysis
Table of Contents: Company profile ............................................... ................................ 3 SWOT
analysis ................................................ .......................................... 5 Aggreko ' LCD
.............................................. financial Highlights ........ 5 Information collected
................................................ ........................... 6 Limitations in gathering information
.............................................. 8 .... Aggreko ' LCD .............................................. financial analysis
........... 9 Graphical presentation of Aggreko 's performance during the year ......... 10 Aggreko 's
credit worthiness creates doubt that factors ............... 12 Company Profile Aggreko PLC (Aggreko)
provides temporary powerand temperature control solutions . The company's lease and provides its
services on a rental basis . Renting its services power generators , temperature control , humidity
control , oil–free air luggage. This cooling towers , process events and services and provides risk
management services solutions . The company's rental and leasing solutions such facilities , oil and
gas , military , petrochemical and refining , manufacturing , events , construction , contract , services
, drilling and mining , shipping and others as customers in various sectors are offered . The company
is involved in providing energy efficient

Corporate Disclosure and Financial Statements: a Brief...
Corporate disclosure and financial statements: a brief history
While the history of private enterprise is thousands of years old, a relevant launchpad to understand
the modern corporation, and its associated concepts of limited liability and disclosure etc. can be
with the corporations of the 17th century.
Understanding the evolution of financial statements and disclosure in the private sector is critical to
seeing the remarkable similarity between the evolution of "Right to Information" issues in the
private sector and the current debates on the same topic in our public institutions:
While the history of private enterprise is thousands of years old, a relevant launchpad to understand
the modern corporation, and its associated ... Show more content on Helpwriting.net ...
The Limited Liability Act was subsequently passed in 1855. This introduced the concept of general
limited liability for shareholders i.e.their liability for the company's debts, if it became bankrupt,
was limited to the amount of share capital which they had invested. It was felt important that the
company's creditors should be aware of the limited liability status of the company, and the
requirement for companies to have "limited" or "ltd" in their name dates from this time.
It was this 1855 Act which finally established companies as the major instrument in economic
development.
After this legislation, businesses mostly fell into two categories:incorporated companies and
conventional partnerships. The numbers of incorporated companies increased steadily, in particular
towards the end of the 19th century.
By 1914 around 65,000 were registered; by 1945 about 200,000
As early as 1877, The Economist was among many institutions who were advocating the imposition
of a form of account on companies, to be adopted for regular disclosure.
Numerous amendments and related statutory enactments

Financial Statement And Financial Statements
Introduction A company's financial statements contain the true fiscal pulse of the company. If ever
there is a need to check the health of a company to see how strong or weak it is fiscally, the financial
statements hold the answers. These statements allow shareholders, lenders, and investors the
opportunity to assess a number of things about the company such as how it can grow it's customer
base, where it falls short at any particular time, and even how well the company is doing amongst
it's peers. Financial statements also provide key information regarding a company's accounting
principles. The purpose of this paper is to identify and assess each of the documents that make up a
firm's financial statements, which are, the income statement, the balance sheet, and the statement of
cash flows.
Income Statements The first of the important financial statement documents is the income statement.
According to our text (2014) the purpose of the income statement is to "report the revenues
generated and expenses incurred by a firm over an accounting period, such as a quarter or a year."
Essentially, the income statement allows a general snapshot of what a company makes and spends
for a specific period of time. Harold Averkamp of AccountingCoach.com (2015) sums up income
statements best with, "The income statement is important because it shows the profitability of a
company during the time interval specified...People pay attention to the profitability of a company
for many reasons.

Analysis Of Goodwill Impairments And Their Effects On...
Analysis of Goodwill Impairments and
Their Effects on Financial Statements
The impairment–only accounting model for goodwill was initially brought to the table in 2004, to
replace the previous amortization–based model. Over the years, research supported the idea that
impairment charges improved the fundamental economic attributes of goodwill than systematic
amortization charges. Research also revealed that such annual changes had minor information value
to users. According to KPMG (2014), this was the key reason why the US Financial Accounting
Standards Board (FASB) "replaced straight–line amortization of goodwill with this model that was
based exclusively on impairment testing" (p. 4). The FASB argued that this approach provides ...
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After the value is determined, if the goodwill's fair value is less than the carrying value, the goodwill
is considered "impaired" and must be charged off. Essentially, the charge off reduces the value of
goodwill to market value, reflecting a "mark–to–market" charge.
Essentially, goodwill is the "value of an asset that is considered intangible but has a quantifiable
prudent value in a business (Boundless, 2014)." An example of goodwill could be the reputation a
firm has with its client. It is important to remember that although goodwill is technically an
intangible asset, it typically is listed separately on a business balance sheet.
Goodwill impairments under SFAS 142, has been the subject of many controversies. Opponents
worry that specific aspects of the standard "are complicated and require judgment (Boundless,
2014). " Therefore, a goodwill impairment charge has the ability to increase the uncertainty of the
analysts forecasting. Goodwill is recorded at the "time of a business combination by an acquiring
entity, and is defined as the excess of the consideration transferred plus te fair value of any non–
controlling interest in the acquire at the acquisition date over the fair values of the identifiable net
assets acquired" (FASB, 2007). Prior to the SFAS 141 and SFAS 142, APB Opinion No.17 regulated
accounting for goodwill (Chen, Krishnan,

FINANCIAL STATEMENTS | Analyzing and Interpreting...
|
FINANCIAL STATEMENTS | Analyzing and Interpreting Financial Statements | | This paper will
demonstrate my understanding of financial accounting and why generally accepted accounting
principles (GAAP) are important. I will discuss how financial statements are used in the
marketplace. I will describe each financial statement and tell what it reveals about the business. I
will explain how the statements are linked and show examples. I will explain the notes to the
financial statements. I will also explain why ratios are used and why they are important. | Keiser
UniversityDr. Bunney SchmidtACG 501 | Monica Holmes | 4/14/2013 |
INTRODUCTION Financial statements are the output of the accounting cycle. Financial ... Show
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Berry also stated, "That corporate owners ' equity statements go into detail about stock sales,
retained earnings and long term investments held by the company" (Berry, 2006). Financial
statements also investigate into pension liabilities and capital gains/losses on liquid investments
(Berry, 2006). Berry stated "small business owners ' equity statements are much less complicated
than their corporate counterparts" (Berry, 2006). According to Berry (2006), a statement for a small
business can detail any changes in the balance of cash accounts on which company owners have the
right to withdrawal, showing the net increase or decrease in the balance for the period in question
(Berry, 2006).
Statement of Cash Flow Kramer talked about the statement of cash flows and how they serve as
much the same purpose as the income statement, with the major difference being the cash flow
statement 's exclusion of non–cash income and expenses (Kramer, Johnson, 2009). According to
Kramer and Johnson (2009), accountants commonly begin with the net income figure from the
income statement when developing a statement of cash flows. According to Kramer, and Johnson
(2009), accountants adjust net income by adding back non–cash expenses and subtracting non–cash
income, arriving at a net increase or decrease in cash. Kramer and Johnson stated

Financial Engineering Statement
Statement of Purpose Financial Engineering Introduction Using algorithms to simplify and solve
complex business problems while also creating software applications that scale to the most complex,
large scale enterprises is a passion that drove me to excel in computer science. The many
interrelated systems, databases and applications gave me insight into how even the most intricate,
highly dependent systems could be streamlined and aligned to challenging goals. As I continue to
master and put into practice the core concepts of computer science, I am beginning to see economic
systems and more specifically, business models, as equally in need of structured logic. In
transitioning from computer science to financial engineering, my career goal is to build on my
foundation of computer science knowledge and apply it to financial engineering. Just as complex
computer systems are in continual need of improvement through the use of great algorithm support
and integration, the same holds true for the myriad of business models in existence today. I can
contribute my computer science skills to making economic systems and business models run more
efficiently. The use of knowledge–based frameworks to create a more effective (Schell, 2008).
Growth in Engineering Years During my undergraduate years, a fascination with translating and
simplifying complex algorithms into software code in a variety of programming languages, was a
passion of mine. During my undergraduate years I also

Financial Statement Of Financial Statements
Financial Statements
The business world requires exacting standards to ensure all costs are correctly accounted for and
considered. To this end the financial statements have become the centerpiece for business
evaluation. The income statement, balance sheet, statement of cash flow and ratios for analysis of
financial statements play a critical role in business evaluation.
Income Statement The income statement is a mainstay of business operations and expenses. This
statement details the revenues and expenses over a time period (i.e. quarter, year, etc.) (Melicher.
2013). This statement incorporates important details of the business operations and profits
generated. The key elements to look at on this statement are the gross profit, operating income and
net income before taxes (Melicher. 2013). The gross profit includes cost of the goods with respect to
revenue, a good indicator of not only what is being sold but what it costs to obtain goods. Also it
should be noted that operating income and net income before taxes provides a good sense of what
the company earns versus general/administrative expenses and the cost of interest. Tax is a constant
that will affect earnings but incentives change this and can bolster and/or skew data. The balance
sheet details other aspect of business.
Balance Sheet The balance sheets provide similar data to the income statement but with a different
objective. The balance sheet is used to capture the performance of a business with

Yakult Financial Statement
Financial Analysis
Financial Statements are often used to evaluate the financial position of a company. Through the
analysis investors can determine the profitability of a company and decide whether to fund money
into that business. The financial statements are comprise of income statement, cash flow statement
and balance sheet, each of these provides useful information of earning and expenses, of cash flows,
and of assets and debts.
Since the three statements offer three different kinds of information, sometimes it is useful to look at
each in the context of the others, and to look at specific items in the larger context. This is the
purpose of financial statement analysis: creating comparisons and contexts to gain a better
understanding of ... Show more content on Helpwriting.net ...
The Retained Earnings of the company, (210536, 223040, 241617) had increased over the years
showing that the earning of the company had increased, the profitability of the business increases
over the years. Furthermore, the constant figures of Book Value/Shareholder`s Equity (274247,
288006, 273769) proclaimed that the company stability was ensured. Finally, the company was
going wealthy due to the increasing figures of Total Net Assets (252242, 287098, 308033).
Income Statement
The Income Statement gives one important perspective on the health of a business – its profitability.
(Ittelson, 2009) The Revenues (312552, 319193, 350322) of Yakult had increased 12% over the
years 2012–2014. This lead to a significant increase of Gross Profit (170031, 171648, 193990)
between the years of 2013–2014. Through the Net Income (13291, 16379, 22543), the profitability
of the company, Yakult was moving toward a positive path. The increase of net income indicated the
company was earning money throughout the

Financial Statements And The Financial Statement
Financial statements have several key components and specific criteria into them to relay the
detailed information for auditors and management. A deeper look into financial statements and the
many concepts surrounding them are needed to explain in more detail. It's also important to
recognize the Auditor's opinion letter, balance sheet, operating statement, statement of changes in
net assets, and statement of cash flows and footnotes of their involvement in the process. Relevant
accounting articles are a useful supplement to financial statements and how they enhance concepts
in the financial statement. The meaningful uses of financial statements for health care organizations
are the epitome of current and future success of financial ... Show more content on Helpwriting.net
...
Next, the receivables would decrease and give the balance left. Lack of copayments and a number of
reasons of patients not paying their bills or copays not collected. The final result shows a bad debt
balance of the percentage of uncollected copays and the amount of copays collected giving the
accounts receivable, net an overall balance.
Inventory is important to consider for the balance sheet as it's listed after receivables since its less
liquid than receivables. This is how patient care services are provided from inventory. The process
starts when the services have been provided, notification of a bill sent to patient, then accounts
receivables grow. As a result, inventory takes longer to convert to cash than receivables because it
hasn't been used to provide services. Next, cash is the most universal way to pay for items. Also,
cash includes amounts on deposit in checking and savings accounts and cash on hand. Marketable
securities are listed to be probably liquidated in the near future. A beneficial factor of marketable
securities is they can be converted into cash in only a few days. In addition, marketable securities
that the organization intends to hold as long–term investments shouldn't be listed with current assets,
but instead under a long–term investment category after fixed assets, (Finkler, S.A., Ward, D.M. &
Calabrese, I.D., 2013).
On the balance sheet the order of liquidity is shown most to least liquid

The Main Financial Statements
The Main Financial Statements
Cash Flow management
Cash flow forecasting sets out anticipated inflows and outflows of cash in the coming months of
trading. Cash flow can be described as the movement of money through the business and it is one of
the most important aspects of financial management to keep the business solvent and trading. It is
possible for a company to be cash rich but not generating any profit and also for a profitable
business to have no cash and be unable to pay its creditors. There are two main ways to avoid cash
flow problems; Speed up cash inflows and delay cash outflows. (Marcousʹe, 2003) Cash flow
forecasting is different from the cash flow statement, whereas the cash flow statement shows what
has happened in the past i.e historical data the cash flow forecast is based on an estimate of future
cash flow. By creating a detailed estimate of the inflows and outflows expected in the next period
the company can derive the cash flow forecast and by calculating each month's figures the
cumulative cash position can be assessed. This gives the company an idea of any times that they
may face a negative cash flow balance and arrangements can be made to make sure extra finance is
available in this period. (Lines and Marcousʹe et al., 1996)
Cash flow and Profit
Cash flow and profit are not the same thing, the objective for a business is not only to make a profit,
but to also generate cash flow. Making profit from cash flow is the main and most important cash

Comparing the Annual Financial Statements of H&M and A&F
The big problem with H&M's annual report is that it does not contain financial statements. In order
to acquire balance sheet figures, the latest quarterly financial report has been acquired. The H&M
balance sheet does not disclose anything about the types of equity the company has. The
Abercrombie and Fitch balance sheet does. The book value of its Class A common stock is $1.033
million. The paid–in capital is $369 million, retained earnings are $2.32 billion and the accumulated
other comprehensive income is $6.4 million.
Neither company is known to have preferred shares outstanding. H&M does not break out its equity
on the balance sheet, so if there are preferred shares this is not going to be known. Abercrombie
simply does not have them.
Abercrombie and Fitch has noted a profit of $796,000 on discontinued operations for the 2011 fiscal
year. This was Ruehl, a branded store and direct–to–consumer operation that was slated for closure
as far back as 2009. H&M does not make note of any discontinued operations on its latest financial
statements. It is assumed, then, that there are none, since there is a reference to Current Operations,
but none to Discontinued Operations.
Not surprisingly, the H&M report does not make note of stock compensation plans. In contrast,
GAAP requires that Abercrombie and Fitch make note of any such plans. The figures associated
with these are found on the Statement of Shareholders' Equity and the Statement of Cash Flows.
Note 4 (p.73)

Financial Statement Of The Company
Amazon Financial Statements
Introduction
This paper relates to finance and accounting. The main objective is to assess and examine financial
statement of the chosen company. Amazon Inc. was chosen as the target company. It is a retail giant
with more than $350 billion of market capitalisation. The company is headquartered in Seattle,
Washington. Its main business sector is internet retail. Since Amazon is the US company and its
stocks are listed on Nasdaq, the company has to file regularly reports with the SEC. The reports can
be found on the website of the regulator at Error! Hyperlink reference not valid.. One of those
reports is covered by this paper. It is an annual report which called the 10–K. It contains financial
information and key statements. Therefore, it is possible to derive data for the company's assets,
liabilities, equity and its financial performance.
According to Needles et al. (2012), publishing of the financial statements is part of financial
reporting process. The company thereby informs general public, investors, creditors and
shareholders about the changes in its financial position and performance over a certain period. The
key financial statements are balance or statement of financial position, income statement and cash
flow statement. In addition, there is the statement of shareholders' equity. A balance sheet contains
information on a particular date. In case with 10–K, the date is December 31 of a particular year.
Therefore,

Financial Statements Paper Part Two The financial condition of a company as reported in the
company's financial statements for a period gives company management the information needed to
make vital business decisions including the decision to expand in nature or how to determine
industry trends in nature by using a trend analysis. In this paper, I will discuss Landry's Restaurants
management assessments of the financial condition and explain whether or not those assessments
agree with my previous assessments supported by a trend analysis. I will also discuss management's
concerns and identify and recommend a course of action for weaknesses not discussed by
management.
Does managements' assessment of the financial condition agree with ... Show more content on
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Another concern of management was the increase in restaurant labor cost that was contributed to
inefficiencies during the openings of the new restaurants. Management should look into these
inefficiencies to ensure future acquisition openings run smoother and more efficiently, which would
keep the restaurant labor cost to a minimum.
$13,100,000 in asset impairment expense was due to six underperforming restaurants in addition to
three closed restaurants. Management needs to keep close watch on any underperforming restaurant
to prevent unnecessary asset impairment expense.
Management did not mention any concern of possible tax increases due in part to a tax reduction
and instead projects the reduction of valuation allowance. In light of the company's future endeavor
plans, a projection of a tax increase should be accounted for to ensure the company is able to pay the
incurred taxes.
Management has many plans to acquire additional restaurants but does not have any plans of selling
possible underperforming restaurants. This could result in the company becoming highly leveraged,
which would reduce stock value and make creditors think twice about extending credit to the
company.
Management is not at all concerned about inflation as the company will just pass the increased cost
onto customers. However, there is no mention of possible economic hardships or a plan for

Basic Financial Statements
There are four types of basic financial statements. They are the balance sheet, income statement,
statement of equity, and statement of cash flows. Each of these are taken into account as a source for
the company and used for different reasons. Creditors, investors, and management all have different
reasons for having more interests in the certain statements they choose to look at closer. The balance
sheet shows the assets, liabilities and equity balances as of a given point in time. It will typically
show the short–term and long–term liquidity and obligations of the company, as well as the leverage
of the company and capital structure. The income statement shows the components of profit and loss
for a specified period of time. It will typically also show subtotals for gross profit, operating income,
and net income after taxes. "The statement of equity shows the activity with the company's owners
for a specified period of time. It will also show changes in assets and liabilities that do not impact
income, such as unrealized gains and losses on securities, or increases and decreases in pension
liabilities."
The statement of cash flows shows the cash inflows and outflows of the company for a specified
period of time. There are two methods for preparing the statement of cash flows. The direct method
shows the actual inflows and outflows. The indirect method starts with net income and then merges
net income to the cash inflows and outflows.
Which

Financial Statements And Cash Flows For Each Company
Exploring the Financial Statements The balance sheet, income statement, and statement of cash
flows for each company is presented in the Appendix. Dollar Tree's financial statements are
presented in Attachments 2–4 (pages XXX–XXX). Dollar General's financial statements are
presented in Attachments 5–7 (pages XXX–XXX). All calculations described in this current section
can be found in Attachment 8 (page XXX). Both Dollar Tree and Dollar General use U.S. Generally
Accepted Accounting Principles (GAAP) to compile their financial statements. Dollar Tree's fiscal
year–end is January 31 whereas Dollar General's fiscal year end is January 30. Dollar Tree and
Dollar General have very similar capital structures. At the end of the fiscal year 2014 (January 31 or
30, 2015), both companies had about 50% liabilities and 50% equity. This represents a debt–to–
equity ratio of 1.00.
Dollar Tree: Attachment 2 (page XXX) shows the consolidated balance sheet for Dollar Tree. Dollar
Tree had a total of $3,567,000 in assets at the fiscal year–end of 2014; comprised of current assets of
$1,994,600 (55.9%) and long–term assets and intangible assets of $1,572,400 (44.1%).
Attachment 8 (page XXX) shows that Dollar Tree had a return on average assets (ROAA) of 18.9%
for the fiscal year–end of 2014. ROAA can be disaggregated into profit margin (profitability) and
asset turnover (productivity) ratios. Dollar Tree's profit margin at the fiscal year–end of 2014 was
7.0% and its asset

Evaluation Of Financial Statements : A Review Form Of...
a. Review of financial statements:
(1) Is the review form of association available for Webstar 's financial statements?
Yes, the review form of association is available for Webstar's financial statements. The review will
be completed in accordance with SSARS.
(2) What procedures are typically included in a review?
Analytical procedures are performed to assess whether there is any material modifications that need
to be made to the financial statements. The accountant must obtain knowledge of the industry and
entity in order to better understand the financials. The focus of the procedures and review should be
in the areas where there are increased risks of material misstatements. The auditor should compare
the financial statements to prior periods and inquire about any significant changes and/or
discrepancies. Financial statements are reviewed to ensure they are prepared in accordance with
GAAP, and that proper accounting principles and procedures are applied.
(3) What type of assurance is included in a review report?
Only inquiries and analytical procedures are performed with a review, therefore there is limited
assurance.
(4) What will result in modification of a review report?
A known material departure from GAAP will result in modification of a review report. If the
financial statements are not revised, the accountant should consider whether modification of the
standard report is adequate to disclose the departure.
(5) Williams says that he heard something about there

Financial Statements and Accounting Standards
1. The existence of a limited liability company means the:
I. company's members are liable for only a limited amount of business debts
II. company has a legal existence distinct from its owners
III. company may raise large amounts of funds by issuing shares.
| I only |
| I and II only |
| II and III only |
| I, II and III |
2. The two main types of companies permitted to be registered under the Corporations Act are:
| a private company, and a proprietary company |
| a public company, and a trade union |
| a proprietary company, and a public company |
| a proprietary company, and a partnership |
3. A proprietary company must have at least one shareholder and cannot have more than: ... Show
The Conceptual Framework defines income as follows:
| Increases in economic benefits during the accounting period in the form of inflows or
enhancements of assets or decreases of liabilities that result in increases in equity, other than those
relating to contributions from equity participants |
| The gross inflow of economic benefits during the period arising in the course of ordinary activities
of an entity when those inflows result in increases in equity, other than increases relating to
contributions from equity participants |

| Income that arises in the ordinary course of business and is referred to by a variety of different
names, including sales, fees, interest, dividends and royalties |
| Income is not defined in the Conceptual Framework |
14. A company incurs significant costs in relation to a speculative project that intends to turn rocks
into gold. In accordance with the AASBs Conceptual Framework the costs of this project are an:
| expense because there is little probability that future economic benefits will eventuate |
| expense because the

Financial statement analysis and report
ACFI 1001 Accounting for Decision Makers – Individual Project (15%)
Financial Statement Analysis and Report
Objectives
Apply theory in practice
Conduct analysis of financial statement – to look beyond the numbers
Experience formal report writing.
REQUIRED: Written report (a soft copy on blackboard via turnitin and printed copy to tutors is
compulsory)
1. Obtain the most recent annual report for two companies in any of the industries on the Australian
Stock Market (for example, mining, retail, manufacturing, construction, service, transport). The
reports should contain at least three years of income statement data and two years of balance sheet
data. Use one of the chosen companies as your 'base company' and the other ... Show more content
on Helpwriting.net ...
11.25 – 12.75 marks: The paper generally is well written but may have minor grammatical or other
writing errors or lack smooth transitions. The report addresses the issues specified in the
requirements, demonstrates understanding, and focuses mainly on important items, but does not
fully synthesize the material being discussed, and/or does not integrate the annual report data with
the narrative.
9.75 – 11.25 marks: The paper does not have excessive grammatical or other writing errors. The
report addresses the issues specified in the requirements, but demonstrates only moderate
understanding, and/or lacks integration.
7.5 – 9.75 marks: The paper does not have excessive grammatical or other writing errors. The report
addresses the issues specified in the requirements but demonstrates only minimal understanding of
one or more of the issues.
0 – 7.5 marks: The paper fails to meet the basic requirements, has excessive composition errors,
and/or fails to demonstrate understanding of the requirements.

Guide to understand and find annual report of companies:
Most public companies have made their annual reports available at company websites.
A company 's annual reports are often located under the Investor Information section at the company
website.
You can use the Company Search http://www.asx.com.au/research/company–research.htm function
to find the Internet addresses and other details of Australian companies listed on

Best Financial Statement
What 's your favorite financial statement and why?"
The question was spoken quickly and with a tinge of annoyance, as my interviewer eyed me
disdainfully from his cushy black leather chair. The investment banker had little time to conduct
these ridiculously long interviews that are standard fare for analyst candidates.
I shifted uncomfortably in my seat and scanned my frazzled brain for the "right" answer.
"Well, of course all three financial statements should be studied in conjunction with one another, but
if I had to choose just one, it would be the balance sheet because it represents the foundation upon
which a business is built."
That sounded good, right? Diplomatic, intelligent, maybe even a bit Wise. But did my interview ...
In Microsoft 's case, that number is $7.41 billion. That 's a nice chunk o ' change over a nine–month
period. Notice that the company 's accounting profit, net income, is substantially less at $5.58
billion.
If you take away nothing else from this article, remember this: Net income is a fiction; cash from
operations is reality.
For an investor, operating cash flow is the profit that really matters. Net income involves all sorts of
distortions that muddy the waters of understanding the true cash profitability of a company.
So, you might be wondering, "Does net income have any good use?" It 's a good question. The only
cases where net income has any real meaning is for some mature companies like Wrigley (NYSE:
WWY), which has net income that closely approximates operating cash flow. Even so, operating
cash flow still stands as the true tally of a company 's cash earnings.
Have I convinced you that operating cash flow is a much more meaningful figure than net income?
If so, you 'll follow my reasoning that the net profit margin is an inferior measure of profitability to
what I call the "operating cash flow margin." This figure is analogous to the net margin, except that
instead of dividing net income by revenues, the calculation is:
Net cash from

Financial Statement Analysis : Australian Vintage Ltd
FINANCIAL STATEMENT ANALYSIS
ANALYSIS OF
PREPARED BY: MALIK JAMSHAIN ANJUM
STUDENT ID: 151MAM5012
TABLE OF CONENTS:
INTRODUCTION. COMPANY PROFILE
SWOT ANALYSIS. INTERNAL AND EXTERNAL
FINANCIAL PERFORMANCE: RATIO ANALYSIS
1. PROFITABILITY
2. LIQUIDITY
3. EQUITY
4. VALUATION
5.
COMPANY PROFILE:
AUSTRALIAN VINTAGE LTD details
Winemaking, wine marketing and vineyard management
Issuer code AVG
Official listing date 26/03/1992
GICS industry group
Food, Beverage & Tobacco
Exempt foreign? No
Internet address http://www.australianvintage.com.au
Registered office address 275 Sir Donald Bradman Drive, COWANDILLA, SA, AUSTRALIA,
5033
Head office telephone 08 8172 8333
Head office fax 08 8172 8399
Share registry COMPUTERSHARE INVESTOR SERVICES PTY LIMITED
LEVEL 5, 115 GRENFELL STREET, ADELAIDE, SA, AUSTRALIA, 5000
Share registry telephone 1300 787 272
Directors/Senior management:

Mr Ian D Ferrier Chairman, Director
Mr Neil McGuigan CEO, Executive Director
Mr Richard Davis Director
Mr Perry R Gunner Director
Mr Brian J McGuigan Director
Mr Mike Noack CFO
Company secretary:
Mr Mike Noack Company Secretary
Australian Vintage Limited is a leading Australian wine company. Championing a fully–integrated
wine business model, the breadth of our capabilities extends to vineyards, boutique and bulk wine
production, packaging, marketing and distribution. As one of the largest vineyard owners and
managers in Australia, Australian Vintage

Revenue Recognition Based On Walmart's Financial Statements
15.515: Financial Accounting
Fall 2012
Problem Set 2
Question 1. Understanding Walmart's financial statements In this homework we will ask you a series
of questions related to revenue recognition based on Wal–Mart 2012's Annual Report (posted on
Stellar ~/Materials/Financial statements used / discussed in class). The goal is to become familiar
with real financial statements.
1. How much net sales did Walmart generate for the fiscal period ending on January 31, 2012?
$443,854M
2. What was the balance of Walmart's accounting receivables as of January 31, 2012?
$5,937M
3. What was the balance of Walmart's allowance for doubtful accounts (ADA) as of January 31,
2012?
$323M
4. Assume that Walmart wrote–off ... Show more content on Helpwriting.net ...
Throughout this question, ignore all of Groupon's costs other than the $150 paid to the merchant.
The offer is announced on August 1st and it requires 100 customers to purchase the deal so that the
deal goes through. For all of the questions below, if no transaction should be recorded, please
explain why.
1. On August 2nd, there are 50 customers that agreed to purchase the deal. Based on Groupon's
revenue recognition policy described above, use the balance sheet equation (BSE) to record the
transaction that Groupon would record on that date.
No transaction, because the ">100 customer" criteria hasn't been met.
2. On August 5th, Groupon has sold 200 Rock Climbing packages for cash. Based on Groupon's
revenue recognition policy described above, use the balance sheet equation (BSE) to record the
transaction that Groupon would record on that date. In recording this transaction, assume that
Groupon does not pay the merchant until a later date.

Asset Liability Equity
Cash A/P R/E
+60k +30k +30k
Below is an excerpt from Groupon's 2011 Annual Report posted on Stellar ~/Materials/Financial
statements used / discussed in class)) about its merchant payment policy.
–––––––––––––––––––––––––––––––––––––––––––––––––
Merchant Payments
–––––––––––––––––––––––––––––––––––––––––––––––––
Under the redemption payment model, which we utilize in most of our international operations in
conformity with local market practice, merchants

Financial Statements And Financial Statement Analysis Essay
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
Financial statements are usually means of communicating information on a company's operations.
They contain information on the revenues, expenses, assets, liabilities and retained earnings of the
business.
2.2 FINANCIAL STATEMENT ANALYSIS
According to Drake (2010), financial statement analysis is the selection, evaluation, and
interpretation of financial data, along with other pertinent information, to assist in investment and
financial decision–making. Moreover, it is also the process of identifying financial strengths and
weaknesses of the firm by properly establishing relationship between the items of the balance sheet
and the profit and loss account. Brigham, E., & Houston, J. (2007), "Financial statements report
both a firm's position at a point in time and its operations over some past period. However, their real
value lies in the fact that they can be used to help predict future earnings and dividends". Financial
ratios are designed to help one evaluate a financial statement.
Ffigures derived from the published annual financial statements and accounts of the companies are
used to produce values that interpret financial meaning. Organizations regularly evaluate their
financial statements by means of ratios and compare the values to those of similar entities or analyze
their firm's financial ratios over time (trend analysis) to show weaknesses or opportunities for
improvement as it is critically important for decision

Kingfisher's Financial Statement Essay
Task 1
Analysis of usefulness of Kingfisher's Financial Statements
Qualitative characteristics are the attributes of the useful financial statements.
There are two types of qualitative characteristics Fundamental and Enhancing, for analysis purpose.
Fundamental characteristics distinguish useful financial information from the information that is not
useful or misleading. Enhancing qualitative characteristics distinguish more useful information from
less useful information.
The two fundamental qualitative characteristics are:
(a) Relevance: Relevant i.e. the information has predictive value or confirmatory value, or both. It is
capable of making difference in the decisions made by users,
(b) Faithful representation: information must be complete, ... Show more content on Helpwriting.net
...
Information is based on internal management reports, both in the identification of operating
segments and measurement of disclosed segment information. (IFRS 8)
Extensive elements deliver an extensive variety of items and administrations, frequently in a few
diverse nations. Additional data on how the general aftereffects of elements are made up from each
of these item or land zones will help the clients of the budgetary explanations. This is the motivation
behind why section reporting examination is imperative with the end goal of Performance
"The current financial year is the 52 weeks ended 1 February 2014 with the comparative financial
year being the 53 weeks ended 2 February 2013. This only impacts the UK & Ireland businesses
with all of the other businesses reporting on a calendar basis as a result of local requirements. The
effect of the 53rd week on the results of the Group in 2012/13 was the inclusion of an additional
£72m sales and an immaterial benefit to retail profit."(Kingfisher pg#89, para

CHAPTER–I
FINANCIAL STATEMENTS
LEARNING OBJECTIVES
After studying this chapter, you will be able to:
Explain the meaning of financial statements of a company;
Describe the form and content of balance sheet of a company;
Prepare the Balance Sheet of a company as per Schedule VI Part I of the Companies Act 1956.
Know the major headings under which the various assets and liabilities can be shown.
Explain the meaning, objectives and limitations of analysis using accounting ratios
Calculate various ratios to assess the solvency, liquidity, efficiency and profitability of the firm.
Interpret the various ratios for inter and intra–firm comparison. define Cash Flow Statement
know its objectives
... Show more content on Helpwriting.net ...
Employees and Trade Unions
Employees are interested in better emoluments, bonus and continuance of business and whether the
dues like provident fund, ESI et., have been deposited with the authorities.
They would therefore, like to know its financial performance and profitability and operating
sustainability.
Government and its agencies
Financial statements are used by government and its agencies to formulate policies to regulate the
activities of business, to formulate taxation policies, to compile national income accounts.
Taxation authorities such as income tax department use the financial statements for determination of
income tax; sales tax department is interested in sales while the excise department is interested in
production.
Stock exchange
Stock exchange uses the financial statements to analyze and thereafter, inform its members about the
performance, financial health, etc. of the company, to see whether financial statements prepared are
in conformity with the specified laws and rules and to see whether they safeguard the interest of
various concerned agencies.

Other Regulatory authorities (such as, Company Law Board, SEBI, Stock Exchanges, Tax
Authorities etc.) would like that the financial statements prepared are in conformity with the
specified laws and rules, and are to safeguard the interest of various concerned

Financial Statements and Corporate Managers
Business Analysis and Valuation: IFRS Edition
Instructor's Manual – Discussion Questions
Palepu – Healy – Bernard – Peek
2
Instructor 's Manual
Dot–Com Crash–3
Instructor's Manual – Discussion Questions
Table of Contents Table of
Contents...........................................................................................................3 Chapter 1 A
Framework for Business Analysis Using Financial Statements................4 Chapter 2 Strategy
Analysis...........................................................................................7 Chapter 3 Overview of
Accounting Analysis ..............................................................16 Chapter 4 Implementing Accounting
... Show more content on Helpwriting.net ...
For example, he can assess how much value can be created through acquisition of target company,
estimate the stock price of a company considering initial public offering, and predict the likelihood
of a firm's future financial distress. Question 2. Accounting statements rarely report financial
performance without error. List three types of errors that can arise in financial reporting.
Three types of potential errors in financial reporting include: 1. error introduced by rigidity in
accounting rules; 2. random forecast errors; and 4
3. systematic reporting choices made by corporate managers to achieve specific objectives.
Accounting Rules. Uniform accounting standards may introduce errors because they restrict
management discretion of accounting choice, limiting the opportunity for managers' superior
knowledge to be represented through accounting choice. For example, SFAS No. 2 requires firms to
expense all research and development expenditures when they are occurred. Note that some research
expenditures have future economic value (thus, to be capitalized) while others do not (thus, to be
expensed). SFAS No. 2 does not allow managers, who know the firm better than outsiders, to
distinguish between the two types of expenditures. Uniform accounting rules may restrict managers'

discretion, forgo the opportunity to portray the economic reality of firm better and, thus, result in
errors. Forecast Errors. Random

Questions On A Financial Statement
A financial statement indicates the analysis of managers discusses and their analysis of all part of an
annual report, this must be sent to shareholder and it must be filed with the SEC the Quarterly
reports do not have all of the details the shareholder wants, but they are also filed with the SEC
(Epstein, 2014). Now the annual reports are a bit more formal financial reporting structure it is
called the SEC form 10K, and it must be filed with the SEC (Epstein, 2014). According to Epstein,
L. (2014), "There is a lot of overlap in the requirements for the 10–K and the annual report to
shareholders, but there are also important differences, the 10–K typically includes more detailed
information than the annual report to shareholders,"( chapter 1.1). Many companies will send the
10–K, as their annual report to shareholders, in some instances' the 10–K filed with the SEC and the
annual report to shareholders are the (Epstein, 2014). Every facet in a company works together to
make the company prosperous and strong it interprets the firm's financial strength.
A 10–K form is an annual report that is the U.S. Securities and Exchange commission's it has a vast
amount of information of a company's history, such as the executive compensation plan and the
equity subsidiaries, the audited financial statements, the whole organization structure and other valid
information (Ford Motor Company. 2014). The 10–K is loaded with valuable detailed information; it
gives a summary of the financial

Financial Statements Paper
Abstract
In this paper I will identify the four basic financial statements, discuss how they are interrelated with
each other, and why they are useful to managers, investors, creditors, and employees.
BALANCE SHEET
A balance sheet provides detailed information about a company's assets, liabilities and shareholders'
equity.
Assets are things that a company owns that have value. This usually means they can either be sold or
used by the company to make products or provide services that can be sold. Assets include physical
property, such as plants, trucks, equipment and inventory. Assets also include things that can't be
touched but nonetheless exist and have value, such as trademarks and patents. Cash itself is an asset,
as well as ... Show more content on Helpwriting.net ...
Small business owners use these statements to find out what areas of their business are over budget
or under budget. Specific items that are causing unexpected expenditures can be pinpointed, such as
phone, fax, mail, or supply expenses. Income statements can also track dramatic increases in product
returns or cost of goods sold as a percentage of sales. They also can be used to determine income tax
liability.
Income statements, along with balance sheets, are the most basic elements required by potential
lenders, such as banks, investors, and vendors. They will use the financial reporting contained
therein to determine credit limits.
STATEMENT OF OWNERS' EQUITY (STATEMENT OF RETAINED EARNINGS)
Retained earnings appear on the balance sheet and most commonly are influenced by income and
dividends. The Statement of Retained Earnings therefore uses information from the Income
Statement and provides information to the Balance Sheet.
The Statement of Retained Earnings is a summary of the changes that occurred in the owner's equity
during a specific time period, such as a month or a year. Increases to owner's equity arise from
investments by the owner and from net income earned during the period. Decreases result from
owner withdrawals and from a net loss for the period. Net income or net losses come directly from
the income statement, and owner investments are capital transactions between the business

Introduce
In this report will analyse budgets and make appropriates decisions and explainn the calculation of
unit costs and make pricing decisions using relevant informations. And than this report will assess
the viability of a project using investment appraisal techniques and discuss the main financial
statements. Compare appropriate formats of financial statements for different types of business.
Interpret financial statements using appropriate ratios and comparisons, both internal and external.
3.1 analyse budgets and make appropriates decisions
According to this data, Kaitai HK(GuangZhou) monthly budget increase range so big. Analysis the
data, the company not arrange the company situation to set the budget. Analysis the budget, ... Show
Net present value investment A
|Year |Cash Flow |Present value factor |Present value |
| | |(12%) | |
|0 |(360000) |1.000 |(360000) |
|1 |50000 |0.893 |44650 |
|2 |70000 |0.797 |55790 |
|3 |150000 |0.712 |106800 |
|4 |180000 |0.636 |114480 |
|5

Financial Statement Analysis for Glaxosmithkline...
List of Graphs [pic] Figure 1: Analysis of Sales Revenue 2010 9 Figure 2: Analysis of Sales
Revenue 2011 10 Figure 3: Analysis of Sales Revenue 2012 10 Figure 4: Current ratio 16 Figure 5:
Acid/Test Quick Ratio 17 Figure 6: Profit margin Ratio 18 Figure 7: Asset turnover 19 Figure 8:
return on asset 19 Figure 9: Return on shareholders equity 20 Figure 10: Earning per share (EPS) 21
Figure 11: Price/Earning (P/E) ratio 22 Figure 12: Price/Equity ratio 22 Figure 13: Dividend per
share (DPS) 23 Figure 14: Debt to total asset ratio 24 Figure 15: Net assets value per share 25
Figure 16: Market price per share 27 List of Tables [pic] Table 1: Analysis of Sales Revenue 10 ...
This change of name takes place following global merger of Glaxo Wellcome and SmithKline
Beecham in December 2000. The Company has a total number of employees over 671 with an
efficient management team. A team of 181 field–force including 11 line managers covers
countrywide on average 2000 daily calls to 22,000 target doctors, while there is a strong team of
distribution personnel engaged in distributed activities to cover average 19,000 customers including
retailers and wholesalers through own distribution channel in 11 District Marketing Offices
throughout the country. In Bangladesh, GlaxoSmithKline holds the 6th positions in pharmaceutical
industry having a market share of 15.6% (as of September 2007) occupying strong hold in key
therapeutic areas like Respiratory, Anti–infectives and Vacciness. Brand names of some major
products of the company are: Ventolin Inhaler, Ceporex, Zinnat, Parapyrol, Zantac, Piriton,
Dermovate, Betnovate, Dextrose, Engerix–B etc. Mission Statement [pic] "Our mission statement
explains why we are in business. Our global quest is to improve the quality of human life by
enabling people to do more, feel better and live longer. Our mission gives us purpose. Our size gives
us opportunity. Our spirit gives us the qualities as individuals and as organization that will enable us
to turn our opportunities into achievements. Our sprit will guide us, keep us

Financial Statements Of Financial Statement Fraud
Financial Statement Fraud
Financial statement fraud is any intentional or grossly negligent violation of generally accounting
principles (GAAP) that is undisclosed and materially effects any financial statement. Fraud can take
many forms, including hiding both bad and god news. Research shows that financial statement fraud
us relatively more likely to occur in companies with assets of less than $100 million, with earnings
problems, and with loose governance structures (Hopwood, Leiner, & Young, 2011).
Financial statement fraud is usually a means to an end rather than an end in itself. When people
"cook the books" they may doing it to "buy more time" to quietly fix business problems that prevent
their entities from achieving its expected earnings or complying with loan covenants (Fraud
Magazine, 2014. It may also be done to obtain or renew financing that would not be granted or
would be smaller if honest financial statements were provided. People intent on profiting from crime
may commit financial statement fraud to obtain loans they can then siphon off for personal gain or
to inflate the price of the company 's shares, allowing them to sell their holdings or exercise stock
options at a profit (Fraud Magazine, 2014). However, in many past cases of financial statement
fraud, the perpetrators have gained little or nothing personally in financial terms. Instead the focus
appears to have been preserving their status as leaders of the entity – a status that might have been
lost

Investigating The Financial Statements Of A Company
Introduction
Auditing is all about assessing the financial statements of a company in order to obtain reasonable
assurance that they are prepared in accordance with the appropriate conceptual frameworks. The
financial statements must give a true and fair view therefore auditors are responsible in detecting if
there are risks of material misstatements caused by intentionally misstating or omitting items.
Auditors must follow all ethical principles and should adhere to auditing standards in order to have
an objective audit opinion. It is essential that they remain independent and free of influence from
their client. They must have control over the process, in case the client wants to hide something that
affects their company adversely. ... Show more content on Helpwriting.net ...
It is also required for the auditor to check the reliability of the source of information which are used
to monitor the effectiveness of the company's internal control.
Furthermore, ISA's are fundamental as they improve the quality of audit and as stated in ISA 200
(2016), the main purpose of auditing is to strengthen the confidence of financial statement users.
This is because audited financial statements means that there is an auditor's judgement which
provides assurance of fairness and accuracy to the financial statement users. ISA 315 is vital in
guaranteeing that if a business decided to release financial reports, these should be transparent and
reliable. Potential risk of material misstatements must be distinguished because misstatements in the
financial statements could put stakeholders at difficulty especially those who are planning on
investing. If financial figures are erroneous, an investor's analysis on a business performance would
not be true and would be useless as a basis of their investment decision. As a result, users of the
financial statements could experience a financial loss due to deceptive reports.
Risk of Material Misstatement
When identifying risks of material misstatements in financial statements, the auditor will perform a
variation of procedures like observation,

Financial Statement Fraud : A Perfect Fraud Storm
Financial statement fraud is something that has become more commonplace than it should be. Many
different events will often lead up to a rash of companies participating in financial statement fraud.
Between the year 2000 and 2002 there were a number of factors that led to what appeared to be a
perfect fraud storm according to our text (Albrecht, Albrecht, Albrecht, & Zimbelman, 2012). Nine
of those will be looked at here. It will also be discussed as to what some of the common ways
financial statement fraud is concealed while looking at some of the common motivations for such
fraud. With this, a look at ways of financial statement fraud exposures can be identified along with
who usually will commit this type of fraud. Below is a list ... Show more content on Helpwriting.net
...
This happened all too often because compensation for executives and many others in companies
were tied to the stock price of the company to closely. It made it ripe for financial statement fraud to
take place. The backdating of stock options became commonplace for executives to cash in in a
fraudulent matter. The cause of this can also be viewed to go hand–in–hand with high analysts'
expectations for a given company. It was easy to see in hindsight, that analyst sometimes drove the
direction of what earnings would actually be for a company. The fraud in many companies was
tailored to the expectations that was listed on the street for the company. Moreover, for too many
cases the expectations set by analysts were unrealistic and in no way sustainable by the company.
(Albrecht et al., 2012, p. 361–362). The pressures of high levels of debt fueled the fraud storm that
much more. Covenants and loans that have been obtained were at risk of being violated if earnings
did not the companies were carrying. Earnings were essential to offset the high cost of interest that
is being made the loans that were made to the company. In the year, 2002 there was 368 billion and
in debt filed for bankruptcy in the United States. During this period WorldCom had the largest
bankruptcy in history over 100 billion in debt by itself (Albrecht et al., 2012, p. 362). There was too
much focus on accounting rules

Financial Statement Fraud And Corporate Financial Fraud
Financial Statement Fraud
Background
Financial statement fraud is one of the biggest types of fraud in today's business world. The
complexity and mechanism of financial statement fraud brought the attention of auditors and
regulators. Financial scandals of Enron, WorldCom, Xerox, Tyco, Parmalat, Qwest, and Satam
Computers increased the auditors' responsibility in detecting and preventing fraudulent transactions.
Corporate financial fraud had negative consequences for the market capitalization due to gigantic
losses of investors. In addition, accounting scandals of early 2000th ruined auditors' reputation and
the public trust.
The regulators, SEC, U.S. GAAP, SOX of 2002, together with AICPA, PCAOB, and COSO
concentrate on fraudulent reporting mechanisms and ways to lessen its occurrence. Inventors,
public, and officials expect auditors detecting fraud to protect third parties interests. The auditors'
core responsibility is to confirm that financial statements are prepared fairly in accordance with U.S.
GAAP. Therefore, auditors should comprehend real–world techniques to identify financial statement
manipulation.
Purpose of Research and Research Question
The purpose of this research is to analyze the cause–effect relationships between the auditor's role
and fraudulent reporting.
The primary research questions are:
1. What are the common schemes of financial statement fraud?
2. How the auditor can detect financial statement fraud?
The research is built on other studies that

Consolidated Financial Statement
Definition & Meaning:
The combined financial statements of a parent company and its subsidiaries.
Definition of 'Consolidated Financial Statements':
Consolidated financial statements are the combined financial statements of a company and all of its
subsidiaries, divisions, or suborganizations.
Explanation:
Because consolidated financial statements present an aggregated look at the financial position of a
parent and its subsidiaries, they enable you to gauge the overall health of an entire group of
companies as opposed to one company 's stand alone position.
A consolidated financial statement gives investors a clear view of a corporation 's global activities.
A consolidated financial statement typically combines a company 's ... Show more content on
Helpwriting.net ...
For example, if Company XYZ owned only 5% of Company A, it would not have to consolidate
Company A 's financial statements with its own.
Companies commonly break out their consolidated statements by division or subsidiary so investors
can see the relative performance of each, but in many cases this is not required, especially if the
company owns 100% of the division or subsidiary.
Consolidated financial statements are financial statements that factor the holding company 's
subsidiaries into its aggregated accounting figure. It is a representation of how the holding company
is doing as a group. The consolidated accounts should provide a true and fair view of the financial
and operating conditions of the group. Doing so typically requires a complex set of eliminating and
consolidating entries to work back from individual financial statements to a group financial
statement that is an accurate representation of operations.
The guiding principle of consolidated financial statements is that of the 'single entity ' principle. The
aim of consolidated financial statement is to show the performance of the group as if it were a single
entity. This means that all intra–group transactions (sales from one group company to another group
company, for example) and intra–group balances (intercompany loans, for example) need to be
eliminated as otherwise the consolidated financial statements would double count

Managing A Firm Based On Past Oriented Financial Statements

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