A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity. In British English including United Kingdom company law a financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a management discussion and analysis: 1.Statement of Financial Position: also referred to as a balance sheet, reports on a company’s assets, liabilities, and ownership equity at a given point in time. 2.Statement of Comprehensive Income: also referred to as Profit and Loss statement (or a “P&L”), reports on a company’s income, expenses, and profits over a period of time.
A Profit & Loss statement provides information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. 3.Statement of Changes in Equity: explains the changes of the company’s equity throughout the reporting period 4.Statement of cash flows: reports on a company’s cash flow activities, particularly its operating, investing and financing activities. For large corporations, these statements are often complex and may include an extensive set of notes to the financial statements and explanation of financial policies and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.
Investors are an individual who commits money to investment products with the expectation of financial return. Generally, the primary concern of an investor is to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the hopes of collecting higher-than-average profits. The types of investments include equity, debt securities, real, currency, commodity, derivatives such as put and call options, etc. This definition makes no distinction between those in the primary and secondary markets. That is, someone who provides a business with capital and someone who buys a stock are both investors. Since those in the secondary market are considered investors, speculators are also investors.
An employee is an individual who was hired by an employer to do a specific job. The employee is hired by the employer after an application and interview process results in his or her selection as an employee.
An employee generally includes any individual who performs services if the relationship between the individual and the person for whom the services are performed is the legal relationship of employer and employee. This includes an individual who receives a supplemental unemployment pay benefit that is treated as wages.
No distinction is made between classes of employees. Superintendents, managers, and other supervisory personnel are employees. Generally, an officer of a corporation is an employee, but a director acting in this capacity is not. An officer who does not perform any services, or only minor services, and neither receives nor is entitled to receive any pay is not considered an employee.
A lender is any institution or individual who loans borrower money. There are a number of types of lending organizations, including educational lenders, commercial lenders, hard moneylenders, lenders of last resort, and mutual organizations. The most traditional type of lender is a commercial lender. Often a commercial lender is a banking institution, though it may also be a private financial group. This type of lender makes an offer to the borrower of certain terms, including interest rate and length of loan, with the goal of maximizing their profit in relation to the borrower’s risk of defaulting on the loan.
Often a loan is brokered, meaning that the borrower is evaluated by a third-party who then proposes the loan request to a number of different lenders. These lenders are chosen based on their likelihood of accepting the particular borrower, and may negotiate small changes in the terms to attract the borrower if they find her desirable. A hard money lender specializes in short-term loans which are backed primarily with real estate as collateral. A hard money lender in general offers worse rates than a traditional banking organization, in exchange for more flexible terms and a broader range of deals they are willing to back. In some states within the US, hard money lenders are forced to operate differently than they do in the country as a whole, because of conflicts between their standard practices and those states’ usury laws.
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, materials and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains.
A customer (also known as a client, buyer, or purchaser) is the recipient of a good, service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuable consideration. Customers are generally categorized into two types: An intermediate customer or trade customer (more informally: “the trade”) who is a dealer that purchases goods for re-sale. An ultimate customer who does not in turn re-sell the things bought but either passes them to the consumer or actually is the consumer. A customer may or may not also be a consumer, but the two notions are distinct, even though the terms are commonly confused. A customer purchases goods; a consumer uses them. An ultimate customer may be a consumer as well, but just as equally may have purchased items for someone else to consume. An intermediate customer is not a consumer at all.
The situation is somewhat complicated in that ultimate customers of so-called industrial goods and services (who are entities such as government bodies, manufacturers, and educational and medical institutions) either themselves use up the goods and services that they buy, or incorporate them into other finished products, and so are technically consumers, too. However, they are rarely called that, but are rather called industrial customers or business-to-business customers. Similarly, customers who buy services rather than goods are rarely called consumers.
Tennant also categorizes customers another way, that is employed out with the fields of marketing. Whilst the intermediate/ultimate categorization is used by marketers, market regulation, and economists, in the world of customer service customers are categorized more often into two classes: An external customer of an organization is a customer who is not directly connected to that organization. An internal customer is a customer who is directly connected to an organization, and is usually (but not necessarily) internal to the organization. Internal customers are usually stakeholders, employees, or shareholders, but the definition also encompasses creditors and external regulators.
Government financial statements are annual financial statements or reports for the year. The financial statements, in contrast to budget, present the revenue collected and amounts spent. The government financial statements usually include a statement of activities (similar to an income statement in the private sector), a balance sheet and often some type of reconciliation. Cash flow statements are often included to show the sources of the revenue and the destination of the expenses.
The rules for the recording, measurement and presentation of government financial statements may be different from those required for business and even for non-profit organizations. They may use either of two accounting methods: accrual accounting, or cash accounting, or a combination of the two (OCBOA). A complete set of chart of accounts is also used that is substantially different from the chart of a profit-oriented business
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