- •Ministry of finance of ukraine
- •Preface
- •Unit 1 Why start a business?
- •Vocabulary
- •Why start a business?
- •2) What information do you think a business plan must represent? Reading
- •Contents of a business plan
- •What should be in the plan?
- •Business plan
- •Vocabulary
- •Text 3 Starting a new business
- •Vocabulary
- •Financial activities and their management
- •Vice – President for Finance
- •Vocabulary
- •Writing a summary (an abstract)1 of a text, a book, an academic paper etc. Steps in writing a summary
- •Here are a few tips for you about writing a summary and some useful expressions
- •Vocabulary
- •Can you answer the following questions?
- •Introduction to accounting
- •Vocabulary
- •Assets and liabilities
- •Current Fixed assets
- •Vehicles
- •Investments
- •Balance sheet
- •Financial statements
- •Value added statement
- •Vocabulary
- •Valuation of assets
- •Variable costs
- •Indirect costs
- •Imputed costs
- •Vocabulary
- •Costing methods
- •Vocabulary
- •The use of funds
- •Vocabulary
- •Sources of finance
- •Borrowing
- •Other sources of funds
- •Management of working capital
- •Vocabulary
- •Money and its functions
- •Nebraska
- •Florida
- •Bank credit
- •Тексти для самостійного читання у і семестрі3
- •Types and forms of business organization
- •Why are companies referred to as ltd., inc., gmbh, or s.A.?
- •The strategy of a company
- •Financial forecasting
- •Careers in finance
- •What is accounting?
- •Financial accounting
- •Business documents
- •Main streets store, inc
- •Main street store, inc Statement of Cash Flows For the Year Ended August 31, 20 XX
- •The ассоunt
- •Title of account Debit | Credit
- •Types of account
- •Тексти для самостійного читання у іі семестрі4
- •Classical economics
- •Keynesian economics (Part I)
- •Keynesian economics (Part II)
- •The importance of the rate of monetary growth
- •The basic propositions of monetarism (Part I)
- •The basic propositions of monetarism (Part II)
- •The monetary rule
- •The decline of monetarism
- •Supply-side economics (Part I)
- •(Part II) The Saving and Investment Effect
- •Supply - side economics (Part III) The Elimination of Productive Market Exchanges
- •Rational expectations theory
- •Government finance
- •Government Growth: Purchases and Transfers
- •Tax rates
- •Taxation
- •Types of taxes
- •Sources of federal revenue
- •Sources of State and Local Revenue
- •Tapescripts
- •Glossary
- •Indirect costs
- •Investment
Financial statements
The profit and loss account
The profit and loss account is a statement of the amount of profit or loss a business has made in a period of time. For convenience and ease of interpretation the information is contained in three sections.
1. The trading account This includes the revenue from sales and the costs associated with producing those sales.
Revenue - Cost of sales = Gross profit
2. The profit and loss account Payments such as interest and directors' fees are deducted from the gross profit to give net profit before tax. Tax is then deducted to give net profit after tax.
Table 7 A profit and loss account Profit and loss account for year ending 30 June 2005 £000 £000 £000
| |||
SALES
|
|
|
10795
|
Cost of sales
|
|
|
8650
|
GROSS PROFIT
|
|
|
2145
|
Less OVERHEADS
|
|
|
|
Administration
|
|
|
|
Wages and salaries
|
235
|
|
|
Stationery
|
95
|
|
|
Heat and light
|
50
|
|
|
Rates, rent, insurance
|
75
|
|
|
Depreciation
|
10
|
375
|
|
Finance:
|
|
|
|
Interest
|
100
|
|
|
Bad debts
|
95
|
195
|
|
Selling:
|
|
|
|
Salaries
|
100
|
|
|
Distribution
|
50
|
|
|
Advertising
|
150
|
300
|
870
|
Net profit
|
|
|
1275
|
Corporation tax
|
|
|
383
|
Net profit after tax
|
892
| ||
Ordinary share dividend
|
|
|
400
|
Reserves
|
|
|
492
|
3. The appropriation account To appropriate means to set aside for a purpose or to make something the private property of an individual or an organization. The appropriation account tells interested parties how the business has used the net profit after tax. A company's appropriation account would include the amount distributed to shareholders, the amount transferred to general reserve and the retained profit. The presentation of a profit and loss account is shown in Table 7.
Funds flow statement
A funds flow statement shows the sources and uses of funds employed by a business over a period of time.
If you look at the information given in a funds flow statement and compare it with the information given in the balance sheet you will see many apparent similarities in the information. The difference lies in the period of time summarized by each statement. The balance sheet gives the sources and use of funds from the beginning of the life of a business. The funds flow statement usually relates to a shorter period of time.
Funds flows are useful to analyze the effects of changes in working capital. Transactions that result in an increase in working capital are sources of funds. Those which lead to a decrease in working capital are funds flowing out of the firm, that is the use of funds. The funds flow analysis shows changes in working capital for a given period.