Business People Club

Making a Profit

0 like 0 dislike
373 views
in Articles - Wallaby
Accountants are responsible for preparing three primary types of financial statements for a business. The income statement reports the profit-making activities of the business and the bottom-line profit or loss for a specified period. The balance sheets reports the financial position of the business at a specific point in time, ofteh the last day of the period. and the statement of cash flows reports how much cash was generated from profit what the business did with this money.

Everyone knows profit is a good thing. It's what our economy is founded on. It doesn't sound like such a big deal. Make more money than you spend to sell or manufacture products. But of course nothing's ever really simple, is it? A profit report, or net income statement first identifies the business and the time period that is being summarized in the report.

You read an income statement from the top line to the bottom line. Every step of the income statement reports the deduction of an expense. The income statement also reports changes in assets and liabilities as well, so that if there's a revenue increase, it's either because there's been an increase in assets or a decrease in a company's liabilities. If there's been an increase in the expense line, it's because there's been either a decrease in assets or an increase in liabilities.

Net worth is also referred to as owners' equity in the business. They're not exactly interchangeable. Net worth expresses the total of assets less the liabilities. Owners' equity refers to who owns the assets after the liabilities are satisfied.

These shifts in assets and liabilities are important to owners and executives of a business because it's their responsibility to manage and control such changes.  Making a profit in a business involves several variable, not just increasing the amount of cash that flows through a company, but management of other assets as well.

Please log in or register to reply to this post.

Related posts

0 like 0 dislike
0 comments 373 views
0 like 0 dislike
0 comments 252 views
0 like 0 dislike
0 comments 235 views
0 like 0 dislike
0 comments 269 views
0 like 0 dislike
0 comments 264 views
0 like 0 dislike
0 comments 257 views
0 like 0 dislike
0 comments 346 views
0 like 0 dislike
0 comments 1,304 views
0 like 0 dislike
0 comments 397 views
0 like 0 dislike
0 comments 371 views
0 like 0 dislike
0 comments 355 views
0 like 0 dislike
0 comments 392 views
0 like 0 dislike
0 comments 384 views
0 like 0 dislike
0 comments 352 views
0 like 0 dislike
0 comments 350 views
0 like 0 dislike
0 comments 356 views
0 like 0 dislike
0 comments 382 views
0 like 0 dislike
0 comments 351 views
0 like 0 dislike
0 comments 340 views
0 like 0 dislike
0 comments 375 views
0 like 0 dislike
0 comments 325 views
0 like 0 dislike
0 comments 364 views
0 like 0 dislike
0 comments 365 views
0 like 0 dislike
0 comments 365 views
0 like 0 dislike
0 comments 329 views
0 like 0 dislike
0 comments 352 views
0 like 0 dislike
0 comments 320 views
0 like 0 dislike
0 comments 377 views
0 like 0 dislike
0 comments 303 views
0 like 0 dislike
0 comments 295 views
0 like 0 dislike
0 comments 302 views
0 like 0 dislike
0 comments 300 views
0 like 0 dislike
0 comments 254 views
0 like 0 dislike
0 comments 278 views
0 like 0 dislike
0 comments 253 views
0 like 0 dislike
0 comments 297 views
0 like 0 dislike
0 comments 290 views
Connect with us:
...