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This article on Finance for Non Finance Professionals will help you to gain basic finance knowledge, accounting concepts and better understanding of financial statement required for growth of your organization.
2. In today’s rapidly changing business world, you need to stay updated than
ever before. Also recent development in economy has made it necessary for
the non-finance professionals to gain knowledge of finance which will help in
analyzing business opportunities and business decisions.
3. • Asset
• Liability
• Book Value
• Market Value
• Depreciation
• Amortization
• Fiscal Year
• Account Receivables
• Account Payables
• Revenue
• Expenses
4. Asset
An asset is an economic
resource that a company owns.
e.g. Machinery
Liability
A liability is legal obligations
of organization which arising
from its past actions.
e.g. Loan
5. Book value
Book value is the amount of an
asset or liability shown on the
company’s books or statement
Market value
Market value is the current
value of the asset or liability.
6. Depreciation
Depreciation is reducing
value of tangible asset over
period of time or over the
useful life of the asset.
Account Receivables
Accounts receivable are the amount
which company received from their
customer for services which they have
been provided
Amortization
Amortization is reducing value an
intangible asset over the useful life of
the asset.
Account Payables
Accounts payable are amounts which
company owes because it purchased
goods or services on credit from a
supplier or vendor.
7. Revenue
Revenue is sale, or any
income received, in
simple word we can say
that it is income that
flows into a company.
Expenses
Expenses are costs that are incurred or
required to run business..
Fiscal year
Fiscal
year
A company’s financial reporting year.
8. Businesses record their financial or other performance in standard structure or
statements called financial statements.
Businesses record their financial or other performance in standard
structure or statements called financial statements. Financial statements
include important information about the organization's financials. This
information is important for shareholders, stakeholders, vendors,
customers, government and company management itself.
Mainly there are three basic Financial Statements:
• Income Statement
• Balance Sheet
• And Cash Flow statement
9. Cash Flow Statement
Income Statement
It measures a company's financial
performance and shows profitability over
a specific period. Income Statement also
called Profit and Loss, Statement of
Earnings or Statement of Operations.
Cash
flow
statement
provides
information about cash receipts and
payments during specific period of
company. It provides information of
cash on the basis of its operating,
investing, and financing activities.
Balance Sheet
Balance sheet includes companies or entity’s assets and liabilities (financial
position) at the end of the day at specific date. It shows financial position of
company at the end of year or specific date. It is also known as a Statement of
Financial Position.
10. Ratio analysis is a technique use to interpret the financial statements. It involves comparison
for a meaningful interpretation of the financial statements. Ratios can be used to evaluate
four different areas of company’s performance and conditions.
Compares two financial
statements to determine
dollar and percentage
changes.
Techniques of Financial
statement Analysis
Shows relationship of
each item to a base
amount on financial
statements.
11. Knowledge is like a line
with no ends…
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