How to analyze a Balance

10 January 2009 - 15:03

The Balance is a financial report that shows the assets, liabilities and patrimony whereupon it counts a certain company in a while.

The assets can be, for example:

• the money that physically is in the company (for example, in its strong box), or the money that it has deposited in the bank (for example, in its current account).
• the physical elements whereupon count the company to conduct their operations and that has a permanent duration (for example, buildings, lands, machineries, vehicles of transport) or that they last temporary (for example, merchandizes).
• the debts that have the clients with the company.

The liabilities can be, for example:

• the debts that the company with its suppliers has.
• the debts that slope with the banks has.

Labels: Accounting, Finances, Tools of business

Published in Finances | 1 Commentario”

How to make a Earnings statement

9 January 2009 - 14:41

The Earnings statement, also known as Account of Results, or Been (or Account) of Gains and Losses, is a financial report that show the income and expenses that a company throughout its economic exercise has obtained.

Examples of income are the financial sales, dividends, income, etc.

Examples of expenses are the consumption of merchandizes, financial expenses of personnel, expenses, depreciations, taxes, etc.

The difference between the income and the expenses knows as benefit him (when the income are majors that the expenses) or like loss (when the expenses are majors that the income).

Unlike the Flow of Box, the Earnings statement shows to the income and expenses at the moment at which they take place, regardless of the moment in which the collections or payments are made cash, for example, registers a sale or a purchase at the moment that takes place, although this one is received or it is pleased months later.

Labels: Concepts, Accounting, Finances, Tools of business

Published in Finances | 41 Commentaries”

How to make a Flow of Box

8 January 2009 - 17:56

The Flow of Box is a financial report that show the entrance flows and debit of cash that has obtained a company.

Examples of cash income are the collection of invoices, collection of loans, obtained collection of interests, loans, collection of rents, etc.

Examples of cash debits are the payment of invoices, payment of taxes, payment of pays, payment of loans, payment of interests, payment of services of water or light, etc.

The difference between the income and the debits of cash knows as balance him, which can be favorable (when the income are majors that the debits) or unfavorable (when the debits are majors that the income).

Unlike the State or Cuenta de Resultados, the Flow of Box shows what really it leaves or in cash enters “box” like, for example, the collections of a sale that really were made cash. In the Flow of Box, the term gain or loss is not used.

Labels: Concepts, Accounting, Finances, Tools of business

Published in Finances | 50 Commentaries”

Costs in a company on watch

26 November 2008 - 22:17

When one is a company service, the usual thing is to only denominate costs to the costs incurred the benefit of the service.

These costs are conformed by the following elements:

Costs of diverse Provisions

Costs conformed by the purchases that the company realizes to be able to offer to give the service.

Costs of Manpower by the service

Costs conformed by the pays of the workers who offer the service.

Indirect costs

Costs conformed by elements that take part indirectly in the benefit of the service, such as: depreciation, energy, water, telephone, rents, maintenance, repairs, etc.

As we have seen previously, the accounting of costs does not have a method or standard system, but the company adapts the method or system that more is suitable according to its needs or objectives to him.

Labels: Accounting, Costs, Finances

Published in Finances | 12 Commentaries”

Costs in an industrial company

26 November 2008 - 22:04

When one is an industrial company (company dedicated to the production or product manufacture), the usual thing is to only denominate costs to the Production costs, that is to say, the costs which they are incurred within the production process.

These production costs are conformed by the following elements:

Cost of acquisition of Direct Raw materials or Material

It is the cost of acquisition of the goods that will be transformed into finished products or that will comprise of him, for example, consumptions, parts, labels.

Cost of Direct Manpower

Costs conformed by the wages and benefits of the workers who work directly in the production of the product.

Indirect expenses of Manufacture

Costs of the necessary elements for the manufacture of the product, but that take part in indirect form in the elaboration of the same.

Labels: Accounting, Costs, Finances

Published in Finances | 3 Commentaries”

Costs in a marketing company

26 November 2008 - 20:44

When one is a marketing company (company dedicated to the purchase and sale of products), the usual thing is to only denominate costs to the Costs of Acquisition, that is to say, the costs conformed by the value of the merchandizes that are bought, as well as to the payments related to this purchase, such as loads, insurances, rights of import, etc.

As we have seen previously, the accounting of costs does not have a method or standard system, but the company adapts the method or system that more is suitable according to its needs or objectives to him.

We see next an example of how to apply the accounting of costs in a marketing company:

We suppose that we initiated operations with a beginning inventory of 30 televisions with a cost of $100 each, soon we bought 10 televisions to $100 each, and later we sell 5 televisions to $300 each. If we have operative expenses of $400 (administrative expenses: $100 and expenses of sales: $300), which would be our net utility?

Labels: Accounting, Costs, Finances

Published in Finances | 3 Commentaries”

The accounting of costs

26 November 2008 - 13:07

The accounting of costs consists of the identification and measurement of the monetary payments which a business or company incurs, being understood the term payment as the consumption of goods, depreciation of assets, etc., and not only like exit of money.

The objective of the accounting of costs is the one to provide information on the costs which a business is incurring generally, a certain product, a certain area, etc., with the purpose of to obtain a better financial situation analysis of a business.

We can enter the costs, for example:

• of a business generally, with the purpose of to obtain an express Earnings statement, and not to have to wait for the Earnings statement of the end of the period done by the general accounting.
• of the product or service that we offer, with the purpose of to find its cost of sales, and to thus be able to know its utility gross (sales - sale cost), also, before having to wait for the Earnings statement of the end of the period.
• of each product that we produce, in order that comparing them with the income that each generates, to know the yield each and, for example, to know which are most profitable and which do not generate utility.
• of a certain product so that, determining which is the utility that we want to win, to be able to define its price.
• of a certain area or department of the business, with the purpose of to know its yield and, for example, to know if the income that it generates are majors that its costs.
• of a certain client, with the purpose of to know if what we spent in maintaining this client turns out to be greater than the income than it generates to us.

Labels: Concepts, Accounting, Costs, Finances, Step by step

Published in Finances | 9 Commentaries”

The accounting in a business

24 November 2008 - 17:42

The accounting consists of the process through what we registered, classified and summarized the different monetary transactions that they appear daily in a business, for then, on the basis of it, to make the Financial statements (mainly the Balance and Cuenta de Resultados).

The objective of the accounting is the one to register all the monetary transactions of the business or company, and to present/display this information of way ordinate to third parties, like:

• governmental organizations: at the time of declaring our taxes; in this case the accounting has obligatory character.
• partners or investors: when we want to convince them that they invest with us in our business.
• banks, financial organizations or moneylenders: when we want to convince them that they grant some credit to us or that to us money for our business gives.
• shareholders: when we want to show to them how he is developed financially our business.
• suppliers: when we want to convince them that they grant majors to us credits.
• consultants, advisers: when we want to show information to him that helps to be able to advise them or to advise to us to us better on our business.

Labels: Concepts, Accounting

Published in Finances | 13 Commentaries”