PLANS AND PRICING
Essentials
Annual accounts, tax, gst, plus all your other compliance needs.
Track Your Business
For the business owner that wants a closer relationship with their financial adviser.
Growth & Strategy
For the business owner that wants to set up a strong management and planning function.
129 Kolmar Road,
Manukau, Auckland
P: 279 3787
F: 279 3789
info@quinnbiz.co.nz
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Understanding Financial Statements
Understanding financial statements is a task that many business owners often put aside to concentrate on something more interesting.
This results in many business owners not really knowing what is going on with their business, especially the cash flow control within the business.
Cash is the lifeblood of any business and it is the fuel that keeps the engine running. It is vital that business owners understand all there is to know about the flow of cash into their business and the flow of cash out of their business. The movement of cash is recorded within the financial statements, which are very useful as a tool to help in the management of the business.
Financial statements are required by business owners to understand how their business is performing. In addition to this, there is normally a requirement to produce them for banks and investors.
Financial statements concentrate on measuring profit or loss. They may then facilitate the preparation of
cashflow reporting and key performance indicators that enable meaningful management information for
your business. The key components of financial statements are:
- Departmentalised Trading Profit and Loss accounts with gross profit percentage calculations for each department
- Balance Sheet
- Supporting verification work papers
- Source and Application of Funds statement
- Debtors’ Aged Analysis
- Stock on Hand Analysis
- Work in Progress Analysis
- Creditors’ Aged Analysis
- Capital Expenditure Summary
- Bank Account Analysis
Preparation of financial statements on a regular periodic basis can contribute greatly to the management of a business. Some businesses find it very useful to produce a weekly performance report and detailed
monthly financial accounts.
If you have any queries on any aspect of the interpretation of your financial statements, please do not
hesitate to contact us.
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