How To Create a PowerPoint Presentation of Financial Statements - SlideModel
Presentation to AIA Members. Westbury Hotel, Dublin. 21st November, IAASA. Michael Kavanagh, Head of Financial Reporting Supervision. The Relationship Between Financial Statements For example, if a business owner begins his company with $, of his own money, then. Explanation. Financial Statements reflect the effects of business transactions and events on the entity. The different types of financial statements are not isolated.
I didn't owe them money.
I didn't owe them services. That's kind of what the owners of the company can say they have of value at the beginning of the month. It normally wouldn't be accounted that way on an actual company's balance sheet, but this is simplified.
And remember, accounts receivables are an asset because someone owes me something. Someone owes me cash in the future. I still have no liabilities. So you can see the snapshot at the beginning of the month, in equity. Snapshot at the end of the month, in equity. And so to go from one point to the other, to go from toI must have grown in equity by And that's what the income statement describes.
Move quickly to the Ratios section if understood, otherwise navigate to a second level of detail, if the audience requests to drill down. As shown by the orange arrows in the image, the important concepts are highlighted. How does it measures performance?
Alsoshows the Net Profit positive or negative over the period. This statement if divided into two sections, operational and non-operational.
Balance sheet and income statement relationship (video) | Khan Academy
Operational items are directly related with the organizations core activities in Sales and Cost of Sale. Differently from the Balance Sheet, the Income Statement represents a period of time and not a snapshot. Highlight the Revenues and the Cost of Sales. This section shows how the organization management is using money for non operational activities.
This section is important when the analysis is centered in improving efficiency. Take your time to exercise this suggestion, otherwise the list will be too long, and will dis-encourage the audience. Analyze some examples in your industry to come up with meaningful consolidated categories.
Statement Of Cash Flows The Statement Of Cash Flows, by definition, is the financial statement that presents all the cash inflows and outflows derived of the operating, financing and investing activities of the organization in a period of time.
Chapter 3 Working With Financial Statements
Considering that the indirect method is the most popular, we included its table in the template. This statement must communicate the cash flows through the organization activities and their accounting recognitions.
The analysis generally will focus on the sustainability of the operational section, and how much investment and financing is required at the period to keep the business going. The audit opinion on the financial statements is usually included in the annual report. There has been much legal debate over who an auditor is liable to. Since audit reports tend to be addressed to the current shareholders, it is commonly thought that they owe a legal duty of care to them.
Chapter 3 Working With Financial Statements - ppt download
But this may not be the case as determined by common law precedent. In Canada, auditors are liable only to investors using a prospectus to buy shares in the primary market. In the United Kingdomthey have been held liable to potential investors when the auditor was aware of the potential investor and how they would use the information in the financial statements. Nowadays auditors tend to include in their report liability restricting language, discouraging anyone other than the addressees of their report from relying on it.
Liability is an important issue: In the United Statesespecially in the post- Enron era there has been substantial concern about the accuracy of financial statements.
- How To Create a PowerPoint Presentation of Financial Statements
- Financial statement
- Balance sheet and income statement relationship
Corporate officers—the chief executive officer CEO and chief financial officer CFO —are personally responsible for fair financial reporting that provides an accurate sense of the organization to those reading the report. Standards and regulations[ edit ] Different countries have developed their own accounting principles over time, making international comparisons of companies difficult. To ensure uniformity and comparability between financial statements prepared by different companies, a set of guidelines and rules are used.
Commonly referred to as Generally Accepted Accounting Principles GAAPthese set of guidelines provide the basis in the preparation of financial statements, although many companies voluntarily disclose information beyond the scope of such requirements.