Stock Statement A stock statement provides information on the cost and quantity of stock related transactions. It describes the amount stock purchased at what value and when, and is a matter of accounts and finance that is supplied by the cash credit account holder to the banks providing loans at a regular interval. It gives information for the opening and closing balances of the transacted items as well. A stock statement can be monthly, quarterly, six- monthly or yearly too. The bank providing the loan is keen on knowing amount of stocks and their valuation on particular dates. To find out this value, an accountant needs to know existing quantity of his company's stock on that day. This quantity will be then multiplied by the rate of its market value on the particular date and the result becomes the stock value. Thus making a statement of all of the above is “Bank Stock Statement”. If the amount of stock is less then it can be manually counted. If the amount of stocks is very large, then the following formula can be used: Closing Stock = (Opening stock in cost +Purchase -sales). Drawing Power Drawing Power refers to the amount of Working Capital funds that the borrower is allowed to draw from the limit …show more content…
Due diligence is used as a confirmation of all material facts. Due diligence refers to the care a person takes in getting into an agreement with a third party. Decision to purchase or not to purchase an asset is usually dependent on results of the due diligence analysis. This includes the of reviewing all financial records and also anything else deemed material to the sale. Sellers can also perform a due diligence analysis on the buyer. Items that may be considered are the buyer's ability to purchase, as well as other items that would affect the purchased entity or the seller after the sale has been completed. Due diligence is a way of preventing unnecessary harm to either party involved in a
Average inventory is calculated using the sum of the first quarterly reporting month to the last quarterly reporting month and then dividing this quantity by two (Gibson, C.H., 2013, pg. 239). With this tool we can see if a business is turning over inventory in an adequate industry manner. It is a beneficial to compare with other similar industries. A high score shows that a business is bringing in inventory and getting rid of it quickly (Gibson, C.H., 2013, pg. 239). A low score means that inventory is not turning over as quick as possible. This indicator allows a business to stock up to meet the inventory necessities. In our comparison with Home Depot and Lowe’s we see a major difference in inventory turnover. Lowes leads with 116% and Home Depot at 13%.s a result we see that Home Depot is turning inventory in a great manner that it is possible to increase
1. Explain the company’s market niche in historical context. Buffet and his company Berkshire Hathaway have succeeded in investment business by buying the stocks which everyone else sells. He has been making profit by buying the stocks which are under real value which Buffet estimates. To do so, he buys stocks when the market price drops because of scandals, accidents, or economic depression.
Due diligence basically means evaluating company decisions prior to finalization. This focuses on numerous areas including financial, legal, and regulatory, accounting and tax. In summary, due diligence is fixated on making numbers work. When this stage is cleared after thorough observation then partners move onto the next stage. In Telstra a great aspect of time was spent on this stage, everything was double checked before moving onto the subsequent step. It is evident that Telstra has been successful in making numbers work.
Acquisition analysis includes determining consideration transferred, goodwill (or gain on bargain) and fair value of assets at the date of acquisition. When Woolly Ltd purchased Jumper Ltd; they paid more then the consideration transferred (fair value of assets less liabilities) of the entity, thus there was goodwill provided. Business combination valuation entries occur when assets or liabilities fair value differs from their carrying amount at the date of acquisition. As Jumper Ltd had assets with a higher fair value than carrying amount; there was reasoning for BCVR entries. Intragroup transactions come about through the transferal of assets or liabilities such as inventory or dividends from the subsidiary to the parent or visa versa (within the group). When Woolly Ltd and Jumper Ltd conduct intragroup transactions, as separate legal entities these transactions are recorded as normal however, from the point of the group these transactions are internal and therefore are not recognized by external users, thus the transactions must be eliminated. Finally, non-controlling interest occurs when the parent owns less than 100% of the subsidiary, however this is not relevant to Woolly Ltd as ownership of Jumper Ltd is 100%. These steps are
A stock is a certain type of security that shows ownership of a particular company and gives the holder a claim to a part of the company’s assets. A share is a stock of a specific company. The word stock is used when referring to shares of multiple different companies whereas the word shares is used when referring to a specific share of a company. An exchange is the marketplace where the stocks, bonds, and other types of financial things are traded. This is the “place” where the stock buyers connect with the sellers. There are many different ways to exchange stock.
The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ Profitability - This information comes from the Profit and Loss account. Were we can compare this year's profit with the previous years.
A stock is a type of financial asset that denotes part ownership on the assets and profits of a company. It also entitles the owner of the stock to receive dividends if the company chooses to pay some of their Profits to the shareholders. Typically, ownership of a stock also gives the investor a right to vote on corporate decisions at shareholder meetings. This exchange takes place through Stock Exchange. Eg. BSE (Bombay Stock Exchange) in India.[iii]
A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy. Competitive strategy concerns how to create competitive advantage in each of the businesses in which a company competes. Corporate strategy concerns two different questions: what businesses the corporation should be in and how the corporate office should manage the array of business units.
1. Corporate Law for Ontario Business (2012). Farah Jamal Karmali 2. Business Dictionary (2010). http://www.businessdictionary.com/definition/separate-legal-entity.html
Accounting aids the government and organisations in decision making for their financial stability. This numerical data helps solve real life problems and contributes to how the economy and businesses perform.
The statement of the financial position is also known as balance sheet has shown the accounting equation, Assests = Liabilities + Equity. The statement of the financial position shows the current assets, liabilities and equity owned by a business during an accounting period.
Corporate governance is the set of guidelines that determines the control and organization of a particular company. The company’s board of directors is in charge of approving and reviewing changes to this set of formally established guidelines. Companies have to keep in mind the interests of multiple stakeholders, parties who have an interest in the company. Some of these stakeholders include customers, shareholders, management, and suppliers. Corporate governance’s focus is concentrated on the rights and obligations of three stakeholder groups in particular: the board of directors, management, and shareholders. Corporate governance determines how power is split between these three stakeholders. A company’s board of directors is the main stakeholder that influences the corporate governance of a company (Corporate Governance).
If there is sufficient working capital than we can assume that it has sound financial position and if the business is under trading than there will be increment in liquid assets which shows that the funds are not been utilized and kept ideal.
In the modern world, financial markets play a significant role, with huge volumes of everyday dealings. They form part of contemporary economic lifestyle and determine the level of success of many people. Humans have always been uncertain of what the future holds and thus, tried to forecast it. The forecast of course cannot omit the likelihood of “easy money” by forecasting the prices of equity markets in the future.
Financial statements provide an overview of a business' financial condition in both short and long term. They help in understanding the past performance of the company and making future predictions about the company. It thus helps us to look beyond the profit figures.