FINANCIAL STATEMENTS by Michael J
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Analysis of the Relationship Between Liquidity and Profitability
Analysis of the relationship between liquidity and profitability Author: Roxana Diana Pîra Liquidity and profitability are some of the most studied concepts of financial management within the area, there is a vast literature in this field. The interaction between these two variables was seen by many economists as over time like Hirigoyen G. (1985), Eljelly A. (2004) and Assaf Neto, A. (2003). Background and main questions One of the main issues regarding the management of an enterprise is the compromise to be made between low profitability and high liquidity that the current assets are offering. According to the economist Assaf Neto, liquid assets are usually less profitable than fixed assets. Moreover he says that investing in working capital does not generate sales or production. However, Hirigoyen (1985) argues that on mid-term and long-term the relationship between liquidity and profitability could be positive, meaning that a low liquidity would lead to lower profitability due to a greater need for loans and a low profitability would not generate sufficient cash flow to finance the expansion of its needs for working capital, purchase new fixed assets, outstanding loans, etc. And it ends up compromising liquidity, thus forming a vicious circle. In 2004 Eljelly published an article on this subject, considering that capital management becomes even more important during periods of crisis, “management is important in good times and take a much greater importance during troubled time” Also, according to him, an effective management of a company’s level of liquidity is particularly important for business profitability and welfare. Firstly I will analyze if there is a short-term negative relationship between liquidity and profitability, and then observe if on the medium term this correlation is positive. -
LIQUIDITY and PROFITABILITY PERFORMANCE ANALYSIS of SELECT PHARMACEUTICAL COMPANIES Mohmad Mushtaq Khan1, Dr
LIQUIDITY AND PROFITABILITY PERFORMANCE ANALYSIS OF SELECT PHARMACEUTICAL COMPANIES Mohmad Mushtaq Khan1, Dr. Syed Khaja Safiuddin2 1Research Scholar, 2Sr. Asst. Professor, Department of Management Studies MANUU, Hyderabad ABSTRACT Indian pharmaceutical market (IPM) is one of the fastest growing pharmaceutical markets, highly fragmented with about 24000 players out of which 330 belong to organized sector. There are approximately 250 large units and 8000 small scale units, which form the core of the pharmaceutical industry in India. The market is dominated by the branded generics, as we see the top ten companies make up for more than 3/4th of the market, that means nearly 70% to 80% of the market. As far as the reputation and rank of the IPM is concerned, it tops amongst the India’s science based industries; is 3rd largest in terms of its volume, and 13th largest as per its value in the world pharmaceutical market. Indian pharmaceutical market is expected to expand at a CAGR of 23.9 % to reach US$ 55 billion by 2020. Indian pharmaceutical companies receive a large sum of revenues from the exports besides the domestic market, as some of them focus on the generics market in US, Europe and semi regulated markets; and some of them focus on custom manufacturing for innovator companies. We know that a company’s operating performance depends upon some key factors like turnover, profit, assets utilization, etc. and the variables which are found in profit and loss account and balance sheet of a company. Henceforth, considering the growth and prosperity of pharmaceutical market, the study aims to analyze the financial performance of selected pharmaceutical companies, by establishing a close relationship between the variables in terms of liquidity and profitability. -
The Effect of Liquidity on the Financial Performance of Non-Financial Companies Listed at the Nairobi Securities Exchange
THE EFFECT OF LIQUIDITY ON THE FINANCIAL PERFORMANCE OF NON-FINANCIAL COMPANIES LISTED AT THE NAIROBI SECURITIES EXCHANGE BY: DEVRAJ ARJAN SANGHANI REG: D63/60293/2013 A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMEMT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF SCIENCE IN FINANCE, SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI OCTOBER, 2014 DECLARATION This is to declare that this research project is my original work that has not been presented to any other university or institution of Higher Learning for an award of a degree. Signed: …………………… Date: ………………………. Devraj A Sanghani D63/60293/2013 This is to declare that this project has been submitted for examination with my approval as the University supervisor. Signed: …………………… Date: ………………………. Mr. Herick Ondigo Lecturer, Department of Finance & Accounting University of Nairobi ii ACKNOWLEDGMENTS I wish to acknowledge everyone who assisted in various ways towards completion of this research project. A lot of thanks go to my supervisor Mr. Herick Ondigo for giving me the required direction all the way until I was through. My fellow classmates who assisted me in various ways cannot be forgotten since their contribution had a positive impact. I can’t also forget the entire management of UoN for their cooperation towards providing library facilities where I accessed most of the information concerning this research study. iii DEDICATION I would like to dedicate my research project to the almighty Lord, for His wisdom and elegance without which I would not have accomplished this much, to my wife and daughters for their support, and my family for their prayers and support during this study. -
Financial Accounting
Best Conditions for Your Success. rs2 ACCOUNTING & CONTROLLING Optimized Accounting backs Commercial Success “We have been searching for an integrated solution. rs2 dis- plays every business process in one system and thus enables efficient management control. Dieter Klauss CEO Sikla GmbH Completely Integrated. As one of the most important components rs2.Accounting integrates smoothly into the rs2.ERP Suite. The main emphasis is on the integration of logistics and production as well as the document management system regarding documentation of business processes. The rs2.Accounting contains the rs2.Accounting system and the rs2.Controlling system. The Accounting system provides the calculation of revenues, expenses and profits of the entire enterprise namely in retro- spect. Financial accounting and consequently the profit and loss statement plus balance sheet, assets accounting and consolidation belong to the accounting system. These components are must tools because every enterprise is legally obliged to use them. The controlling system supports detailed planning and monitoring of profit and liquidity. The rs2.Controlling system contains decision oriented instruments: Cost center accouting and cost unit accounting, liquidity calculation and project calculation namely planning, actual calculation, control account. 2 rs2 BUSINESS SOFTWARE rs2 at a Glance. + Financial Accounting + Assets Directory + Consolidation + Cost Accounting + Liquidity Calculation + Budget Accounting + Project Calculation rs2 ACCOUNTING & CONTROLLING + +CRM/TAPI MIS -
Relationship Between Liquidity and Profitability in Indian Automobile Industry
International Journal of Science and Research (IJSR) ISSN (Online): 2319-7064 Index Copernicus Value (2015): 78.96 | Impact Factor (2015): 6.391 Relationship between Liquidity and Profitability in Indian Automobile Industry Dr. Ritu Paliwal1, Dr. Vineet Chouhan2 1Associate Professor, Madhav University, Abu Road, Rajasthan-India 2Assistant Professor, School of Management, Sir Padampat Singhania University, Bhatewer, Udaipur. (Rajasthan) Abstract: For a business, accounting liquidity is a measure of their ability to pay off debts as they come due, that is, to have access to their money when they need it. In practical terms, assessing accounting liquidity means comparing liquid assets to current liabilities, or financial obligations that come due within one year. There are a number of ratios that measure accounting liquidity, which differ in how strictly they define "liquid assets."(Investopedia.com). On the other hand profitability is the ability of a company to use its resources to generate revenues in excess of its expenses. For any business the Tradeoff between the profitability and liquidity is important, thus the aim of the business is to maintain a proper level of the current funds or liquidity. That was the reason behind the current study where it is to be checked out that whether the automobiles industry is making a perfect balance between the liquidity and profitability or not. It was found that the profitability and liquidity has similar changes in most of the cases in the different companies and the correlation was found to be significant and positive between the liquidity and profitability. Keywords: Liquidity, Profitability, Ratio, Automobile Industry 1. Introduction of Liquidity & Profitability For any business the Tradeoff between the profitability and Liquidity is considered in various terms in for a business. -
Preparing a Short-Term Cash Flow Forecast
Preparing a short-term What is a short-term cash How does a short-term cash flow forecast and why is it flow forecast differ from a cash flow forecast important? budget or business plan? 27 April 2020 The COVID-19 crisis has brought the importance of cash flow A short-term cash flow forecast is a forecast of the The income statement or profit and loss account forecasting and management into sharp focus for businesses. cash you have, the cash you expect to receive and in a budget or business plan includes non-cash the cash you expect to pay out of your business over accounting items such as depreciation and accruals This document explores the importance of forecasting, explains a certain period, typically 13 weeks. Fundamentally, for various expenses. The forecast cash flow how it differs from a budget or business plan and offers it’s about having good enough information to give statement contained in these plans is derived from practical tips for preparing a short-term cash flow forecast. you time and money to make the right business the forecast income statement and balance sheet decisions. on an indirect basis and shows the broad categories You can also access this information in podcast form here. of where cash is generated and where cash is spent. Forecasts are important because: They are produced on a monthly or quarterly basis. • They provide visibility of your future cash position In contrast, a short-term cash flow forecast: and highlight if and when your cash position is going to be tight. -
Illustrative IFRS Financial Statements 2019 – Investment Funds
Illustrative IFRS financial statements 2019 Investment funds Stay informed. Visit inform.pw c.com Illustrative IFRS financial statements 2019 – Investment funds Illustrative IFRS financial statements 2019 – Investment funds This publication provides an illustrative set of financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for a fictional open-ended investment fund (‘ABC Fund’ or the ‘Fund’). ABC Fund is an existing preparer of IFRS financial statements; IFRS 1, ‘First-time adoption of IFRS’, is not applicable. It does not have any subsidiaries, associates or joint ventures. The Fund’s shares are not traded in a public market. Guidance on financial statements for first-time adopters of IFRS is available at www.pwc.com/ifrs. This publication is based on the requirements of IFRS standards and interpretations for the financial year beginning on 1 January 2019. There are no standards effective for the first time in 2019 that required changes to the disclosures or accounting policies in this publication. However, readers should consider whether any of the standards that are mandatory for the first time for financial years beginning 1 January 2019 could affect their own accounting policies. Appendix XII contains a full list of these standards (including those that have only a disclosure impact) as well as a summary of their key requirements. In compiling the illustrative disclosures, we have updated the guidance included in Appendix VIII to address IFRIC 23 ‘Uncertainty over income tax treatments’ which is applicable for financial years beginning on or after 1 January 2019. Commentary boxes are included throughout the publication to provide additional information where necessary. -
Chapter 5 Consolidation Following Acquisition Consolidation Following
Consolidation Following Acquisition Chapter 5 • The procedures used to prepare a consolidated balance sheet as of the date of acquisition were introduced in the preceding chapter, that is, Consolidation Chapter 4. Following Acquisition • More than a consolidated balance sheet, however, is needed to provide a comprehensive picture of the consolidated entity’s activities following acquisition. McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. 5-2 Consolidation Following Acquisition Consolidation Following Acquisition • The purpose of this chapter is to present the procedures used in the preparation of a • As with a single company, the set of basic consolidated balance sheet, income statement, financial statements for a consolidated entity and retained earnings statement subsequent consists of a balance sheet, an income to the date of combination. statement, a statement of changes in retained earnings, and a statement of cash flows. • The preparation of a consolidated statement of cash flows is discussed in Chapter 10. 5-3 5-4 Consolidation Following Acquisition Consolidation Following Acquisition • This chapter first deals with the important concepts of consolidated net income and consolidated retained earnings. • Finally, the remainder of the chapter deals with the specific procedures used to • Thereafter, the chapter presents a description prepare consolidated financial statements of the workpaper format used to facilitate the subsequent to the date of combination. preparation of a full set of consolidated financial statements. 5-5 5-6 1 Consolidation Following Acquisition Consolidation Following Acquisition • The discussion in the chapter focuses on procedures for consolidation when the parent company accounts for its investment in • Regardless of the method used by the parent subsidiary stock using the equity method. -
Consolidated Financial Statements 2019
CONSOLIDATED FINANCIAL STATEMENTS 2019 Contents Consolidated Financial Statements The Board of Directors' and CEO's Report 1 14 Property, plant and equipment 41 Independent Auditor's report 7 15 Right of use assets 43 Consolidated Statement of Income 11 16 Goodwill 44 Consolidated Statement of Comprehensive Income 12 17 Intangible assets 46 Consolidated Statement of Financial Position 13 18 Investments in associates 47 Consolidated Statement of Changes in Equity 14 19 Trade receivables, other receivables and Consolidated Statement of Cash Flows 15 prepayments 48 Notes to the Consolidated Financial Statements 16 20 Deferred income tax 49 1 General information 16 21 Inventories 51 2 Summary of significant accounting policies 17 22 Equity 52 3 Critical accounting estimates and 23 Borrowings and lease liabilities 56 assumptions 31 24 Provisions 61 4 Business combinations 32 25 Post-employment benefits 62 5 Non-IFRS measurement 34 26 Financial instruments and risks 62 6 Segment information 35 27 Trade and other payables 68 7 Revenues 37 28 Contingencies 69 8 Expenses by nature 38 29 Related party transactions and information on 9 Net finance costs 38 remuneration 70 10 Staff costs 38 30 Subsequent events 71 11 Fees to Auditors 39 31 Subsidiaries 72 12 Income tax 39 32 Quarterly results (unaudited) 73 13 Earnings per share 40 33 Definitions and abbreviations 75 The Board of Directors' and CEO's Report Marel is a leading global provider of advanced utilization levels the interest and finance cost is processing equipment, systems, software and expected to decrease as the new facility includes services to the poultry, meat and fish industries with more favorable terms. -
Reading and Understanding Nonprofit Financial Statements
Reading and Understanding Nonprofit Financial Statements What does it mean to be a nonprofit? • A nonprofit is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. • The mission of the organization is the main goal, however profits are key to the growth and longevity of the organization. Your Role in Financial Oversight • Ensure that resources are used to accomplish the mission • Ensure financial health and that contributions are used in accordance with donor intent • Review financial statements • Compare financial statements to budget • Engage independent auditors Cash Basis vs. Accrual Basis • Cash Basis ▫ Revenues and expenses are not recognized until money is exchanged. • Accrual Basis ▫ Revenues and expenses are recognized when an obligation is made. Unaudited vs. Audited • Unaudited ▫ Usually Cash Basis ▫ Prepared internally or through a bookkeeper/accountant ▫ Prepared more frequently (Quarterly or Monthly) • Audited ▫ Accrual Basis ▫ Prepared by a CPA ▫ Prepared yearly ▫ Have an Auditor’s Opinion Financial Statements • Statement of Activities = Income Statement = Profit (Loss) ▫ Measures the revenues against the expenses ▫ Revenues – Expenses = Change in Net Assets = Profit (Loss) • Statement of Financial Position = Balance Sheet ▫ Measures the assets against the liabilities and net assets ▫ Assets = Liabilities + Net Assets • Statement of Cash Flows ▫ Measures the changes in cash Statement of Activities (Unaudited Cash Basis) • Revenues ▫ Service revenues ▫ Contributions -
VALUE IFRS Plc Illustrative IFRS Consolidated Financial Statements December 2019
VALUE IFRS Plc Illustrative IFRS consolidated financial statements December 2019 This publication presents the sample annual financial reports of a fictional listed company, VALUE IFRS Plc. It illustrates the financial reporting requirements that would apply to such a company under International Financial Reporting Standards as issued at 31 May 2019. Supporting commentary is also provided. For the purposes of this publication, VALUE IFRS Plc is listed on a fictive Stock Exchange and is the parent entity in a consolidated entity. VALUE IFRS Plc 2019 is for illustrative purposes only and should be used in conjunction with the relevant financial reporting standards and any other reporting pronouncements and legislation applicable in specific jurisdictions. Global Accounting Consulting Services PricewaterhouseCoopers LLP This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. About PwC At PwC, our purpose is to build trust in society and solve important problems. We're a network of firms in 158 countries with more than 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com © 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. VALUE IFRS Plc Illustrative IFRS consolidated financial statements December -
Fund & Revenue Accounting
UNIVERSITY OF COLORADO BOULDER DEPARTMENTAL FINANCIAL MANAGEMENT GUIDE FUNDANDREVENUE ACCOUNTING TABLE OF CONTENTS - CHAPTER 4 I. CHAPTER 4 – FUND AND REVENUE ACCOUNTING ............................................ 1 II. PERTINENT GUIDELINES AND REGULATIONS .................................................. 1 A. GAAP .............................................................................................................. 1 B. Higher Education Financial Reporting GAAP ........................................................... 3 III. DAY-TO-DAY OPERATIONAL STRUCTURE ......................................................... 4 IV. UNRESTRICTED VS. RESTRICTED ..................................................................... 5 V. FUND AND FUND GROUPS ................................................................................ 7 A. Fund ............................................................................................................... 7 B. Fund Group ...................................................................................................... 8 VI. AGENCY FUNDS (Fund 80) ............................................................................... 9 VII. PLANT FUNDS (Funds 71, 72, 73, 74, 78) ......................................................11 A. Capital Construction Plant Fund (Fund 71) .......................................................... 11 B. Renewal and Replacement Plant Fund (Funds 72, 78) ........................................... 12 C. Retirement of Indebtedness Plant Fund (Fund 73) ..............................................