Month: January 2022

Cash flow statement summaries the cashbook, by reconciling the opening and closing balance of the cash and cash equivalents. Cash equivalents refer to liquid assets which can easily be transferred into cash and include; Cash Demanded deposits in banks Short Read More …

Users of financial statements, require understanding how the business generated cash and how the cash was used. Unlike the income statement where profit reported is influenced by accounting policies and estimates, cash flow indicate the performance of the business enterprise Read More …

INTRODUCTIONS A business enterprise normally prepares the following two financial statements Profit or loss or income statement which helps to find out the profit or loss made as result of operations of the company over a specified period. Balance sheet Read More …

INTRODUCTION These are some form of organizations that are set up to promote or to cater for the welfare of the members involved and not to make a profit. These include clubs, (e.g. football clubs, sports clubs), welfare associations and Read More …

These measure the financial risk of a firm (the probability that a firm will not be able to pay up its debts). The more debts a business has (non owner supplied funds) the higher the financial risk.   This ratio Read More …

The following limitations are inherent in the use of ratios: – 1. Historical information. Ratios are computed from past statements thus giving historical information which may be irrelevant for future decision making. 2. Size and diversification of firms. Different firms Read More …