Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

Financial Statements and Analysis, Cheat Sheet of Financial Management

Definitions and purposes of various types of financial statements, including consolidated financial statements, interim financial statements, segment reporting, pro forma financial statements, and nonprofit and governmental financial statements. It also explains the indirect and direct methods of preparing cash flow statements and the importance of analyzing financial statements through vertical and horizontal analysis.

Typology: Cheat Sheet

2021/2022

Available from 12/01/2023

jai-mehta
jai-mehta 🇺🇸

5 documents

1 / 4

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
FINANCIAL'MANAGEMENT'
CHAPTER'4
1. Consolidated Financial Statements:
- Definition: Consolidated monetary statements combine the
economic outcomes of a parent organization and its subsidiaries
into a unmarried set of economic statements.
- Purpose: Provides a comprehensive view of the economic
function and overall performance of the complete institution of
groups.
2. Interim Financial Statements:
- Definition: Financial statements organized for a length shorter
than a full financial year, frequently protecting a quarter or six
months.
- Purpose: Provides well timed facts for selection-making
between annual reports.
3. Segment Reporting:
- Definition: Companies file monetary facts for exceptional
segments in their business, inclusive of geographical places or
product lines.
- Purpose: Helps stakeholders understand the performance of man
or woman commercial enterprise segments.
4. Pro Forma Financial Statements:
- Definition: Pro forma monetary statements are hypothetical or
projected financial statements based on sure assumptions or
occasions.
- Purpose: Used for planning and decision-making, especially
while comparing the capacity impact of unique events or
changes.
pf3
pf4

Partial preview of the text

Download Financial Statements and Analysis and more Cheat Sheet Financial Management in PDF only on Docsity!

FINANCIAL MANAGEMENT

CHAPTER 4

1. Consolidated Financial Statements: - Definition: Consolidated monetary statements combine the economic outcomes of a parent organization and its subsidiaries into a unmarried set of economic statements. - Purpose: Provides a comprehensive view of the economic function and overall performance of the complete institution of groups. 2. Interim Financial Statements: - Definition: Financial statements organized for a length shorter than a full financial year, frequently protecting a quarter or six months. - Purpose: Provides well timed facts for selection-making between annual reports. 3. Segment Reporting: - Definition: Companies file monetary facts for exceptional segments in their business, inclusive of geographical places or product lines. - Purpose: Helps stakeholders understand the performance of man or woman commercial enterprise segments. 4. Pro Forma Financial Statements: - Definition: Pro forma monetary statements are hypothetical or projected financial statements based on sure assumptions or occasions. - Purpose: Used for planning and decision-making, especially while comparing the capacity impact of unique events or changes.

5. Other Comprehensive Income (OCI):

  • Definition: Includes certain profits and losses that skip the profits assertion, such as modifications inside the truthful price of to be had-for-sale securities.
  • Purpose: Provides a greater complete view of an organization's monetary overall performance past net income. 6. Cash Flow Statement - Indirect Method:
  • Definition: The oblique approach starts with net earnings and adjusts for non-coins gadgets to reach at internet cash furnished by way of running sports.
  • Purpose: Provides insights into the business enterprise's coins- generating capacity from its core operations. 7. Cash Flow Statement - Direct Method:
  • Definition: The direct method reports actual cash inflows and outflows from operating activities.
  • Purpose: Offers a greater specific breakdown of cash flows from operating sports, providing transparency. 8. Nonprofit and Governmental Financial Statements: Nonprofit Organizations:
  • Statement of Activities: Similar to an profits assertion, suggests revenue and costs.
  • Statement of Financial Position: Similar to a stability sheet, displays assets and liabilities. Governmental Organizations:
  • Statement of Activities: Reflects the change in internet role.
  • Statement of Net Position: Similar to a balance sheet, displaying belongings and liabilities. 9. Analysis of Financial Statements: Vertical and Horizontal Analysis:
  • Vertical analysis enables check the relative share of each financial declaration object.
  • Horizontal analysis compares monetary statistics over one-of-a- kind periods to pick out tendencies.
  • Confidentiality: Analysts need to deal with private records with confidentiality. Conclusion: Understanding numerous styles of financial statements, which include consolidated, intervening time, and seasoned forma statements, is critical for a complete view of a company's monetary function. The evaluation of monetary statements involves using gear like vertical and horizontal evaluation, commonplace-length analysis, and quality of profits evaluation. Ethical concerns, which include heading off profits management and ensuring transparency, are essential for maintaining agree with and making knowledgeable monetary choices.