Topic: Accounting

Role of Controller in Protection of Assets

In a business, a financial controller is an accounting/audit expert that overseas accounting and implements internal control measures. The person in this role is also sometimes called the comptroller. One of the responsibilities of the controller is to protect assets...

Why do companies manipulate their financial reports?

Financial reports are to companies what an annual report of health is to a person. Investors, lenders, and prospective key customers go through a company’s financial reports before they associate with them. Employees of a company are incentivised based on how much...

Significance of Cash Flows

If a company has a high demand for its product, the product has high margins, makes purchases and pays on time, shows an increasing trend in profits, the business is a hit, right? Well, not always. In most businesses cash is used to buy raw materials, produce value...

Cash Flow Statements – Direct and Indirect Method

A cash flow statement can be presented using two methods: Indirect Method Direct Method The two methods differ in terms of how the cash flow from operating activities is calculated. In the indirect method, the operating cash flows are not directly reported. Instead...

Cash Flow Statement

Cash Flow is indicative of a company’s financial health. Problems in cash flow may point to issues in product pricing, operating efficiency and credit policy. Statements of cash flow give an indication of what needs to be rectified and realigned. Below is the...

Income Statement

A lot of things hinge on a company’s profit. Profits determine bonuses, dividends to shareholders, timely repayments to banks and an important measure to attract investors. To understand an income statement better, let us take a look at the income statement of...

Elements of Balance Sheet

Balance sheet is one of the most important financial statements. To understand a balance sheet better, let us take a look at the elements of their balance sheet. As you can see, the balance sheet shows all assets on top, and then all liabilities and shareholder’s...

Elements of Financial Statements

Though it is said organizations have an indefinite life, in reality they do have a particular life cycle. These are birth, growth, plateau and finally no growth or decline. This is not unlike a product life cycle. In periods of slow growth, product extensions are...

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