FINANCIAL ANALYSIS AND MANAGEMENT

Financial Analysis and Management

Executive Summary

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant information relating to importance and limitations of financial statements. In this paper, the author has critically examined some important aspects of financial statements and discounted cash flows. First, the author has evaluated the importance of financial statements with respect to different users. Second, the author has examined the significance of discounted cash flows in making investment decisions.

Financial Analysis and Management

Introduction

Financial reporting is a combination of different forms, made on the basis of accounting for the purpose of collection and compilation of the information necessary for the further planning of the company. Financial accounting or, simply, accounting is the technique by which are collected, sorted, recorded, added together and reported measurable operations money by a commercial entity. It is the proper usage of certain accounting principles to record, classify and summarize, in monetary terms the financial and economic data to report in timely and reliable operations of the life of a company. Its purpose is to review the external financial and economic activities of enterprise, based on data from public finance (accounting) and statistical reporting. Managerial Accounting (Management Accounting) - regulated system of identifying, measuring, collecting, recording, interpretation, synthesis, preparation and provision of important decision-making on the activities of the company information and indicators to managers of the company (internal users - managers). The financial performance of any company is gauged by its financial statements. The financial performance of the company, according to the Income statement, leads to the following statistics and results. The balance sheet of the company depicts it financial health as on the current date.

Discussion

Discuss the view that it is impossible to satisfy the needs of different users with a single set of published financial statements

Among the users of financial statements include investors, employees, lenders, suppliers and other trade creditors, customers, governments and their agencies and the general public. They use financial statements to satisfy some of their different needs for information.

Stakeholders are actors where internal or external or economic and social partners of the firm. The activity of the company has a direct or indirect impact on these players and these players have a more or less on the company. These are complex networks of influence, relationships, partnerships, power, and interdependence. A certain extent, the company depends on each of its stakeholders for its survival, and vice versa.

The stakeholders that are interested in the information provided in the annual report of Best Buy are their customers, suppliers, lenders (banks and shareholders), employees. These are internal stakeholders whereas, external stakeholders such as residents of neighbouring areas to business or interest groups. For a business, information, consultation and dialogue with stakeholders are essential, as it is the prerequisite for the legitimacy and value of the policy of sustainable development that seeks to engage. They are interested in the financial health of the company as being part of the company, company every action small or ...