Home ยป Introduction to Financial Accounting

Introduction to Financial Accounting

Introduction to Financial Accounting

There's a specialist from your university waiting to help you with that essay topic for only $13.90/page Tell us what you need to have done now!


order now

Name:

Course:

Institution:

Institution:

Date:

Introduction to Financial Accounting

The accounting standards used at Abercrombie and Fitch is SEC – Securities and Exchange Commission while Hennes & Mauritz use the IFRS – International Financial Reporting Standards. Auditing standards used at Abercrombie and Fitch are in accordance to Public Company Accounting Oversight Board (United States) while Hennes & Mauritz used International Financial Reporting Standard. When an investor visits the Abercrombie and Fitch website, the information given on it contains a lot of information from the company’s governance to the financial statements of the company that makes it easy for a person to analyze the information. The website contains useful information that a person need to know about them. The financial statement has a traditional format. The Hennes & Mauritz website shows why the company exists, how long they have been in the market, the number of employees. The company website gives information about its financial position for the last five years. It has listed its top shareholders (Davis, 2010). The website is very colorful. The financial report is done differently as it even has colored borders. The website is easily readable. Hennes & Mauritz financial statement is easy to read. The layout is user friendly (Hennes & Mauritz, 2012). Both financial statements give important details about the organizations. They contain information that an investor can use to predict the future performance of the organizations. An investor is able to get a lot of information from both organizations. From the information provided, a user can easily make a decision whether to invest or not. Both financial statements are done properly and thoroughly. Both companies have given too many details especially on the financial, which can be confusing to a reader.

Balance Sheet for Abercrombie & Fitch

2011

2010

2009

Total Assets

2,947,902

2,821,866

2,848,181

Total Liabilities

1,057,118

993,949

1,002,603

Total Stockholder Equity

1,890,784

1,827,917

1,845,578

Net Tangible Assets

1,890,784

1,827,917

1,845,578

Income Statement for Abercrombie & Fitch

2011

2010

2009

Total Revenue

3,468,777

2,928,626

3,484,058

Gross Profit

2,212,181

1,883,598

2,331,095

Operating Income or Loss

231,932

117,912

498,262

Net Income

150,283

254

272,255

Cash Flow for Abercrombie & Fitch

2011

2010

2009

Net Income

150,283

254

272,255

Total cash flow from Operating Activities

391,789

395,487

491,031

Total cash flows from Financing Activities

(145,333)

(136,050)

30,469

Change In Cash and Cash Equivalents

156,403

151,278

404,273

Currency in USD

Retrieved from,

http://investing.money.msn.com/investments/stock-balance-sheet?symbol=ANF

Balance Sheet for Hennes & Mauritz

2010

2009

2008

Total Assets

59,182

54,363

51,243

Total Liabilities

15,010

13,750

14,293

Total Equity

44,172

40,613

36,950

Total Liabilities & Shareholders Equity

59,182

54,363

51,243

Income Statement for Hennes & Mauritz

2010

2009

2008

Gross Profit

68,269

62,474

54,468

Operating Profit

24,659

21,644

20,138

Profit After Financial Items

25,008

22,103

21,190

Profit for the period

18,681

16,384

15,294

Cash Flow for Hennes & Mauritz

2010

2009

2008

Cash Flow from current operations before changes in working capital

22,621

18,491

17,876

Cash Flow from current Operations

21,838

17,973

17,966

Liquid funds at beginning of the financial year

19,024

22,276

16,064

Liquid funds at the end of the financial year

16,691

19,024

22,726

Currency in SEK

Retrieved from http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=HMB:SS

The company, which is most profitable, is Abercrombie and Fitch. The currency used in trading is different. Abercrombie and Fitch is quoting in US Dollars while Hennes & Mauritz is quoting Swedish currency. Hennes & Mauritz’s profits went down because the prices of cotton have gone up, high cost of transport and the Swedish currency had become stronger. Abercrombie and Fitch sales did not rise as expected because of their strategy in Europe. Hennes & Mauritz is a domestic company while Abercrombie & Fitch is an international company. This makes profits from both companies have a big difference. Hennes & Mauritz customers are mainly the local people while Abercrombie and Fitch also targets international customers as well as local people. This makes the profit margins different. Hennes & Mauritz products are more affordable compared to those of Abercrombie & Fitch. Hennes & Mauritz Company is very profitable. Their revenues are approximately US dollars 16 billion. Abercrombie and Fitch emphasizes on the label and customer experience (Abercrombie & Fitch, 2004). Their total sales is approximately US dollars 2.9 billion with income totaling to US dollars 254,000. The information used is retrieved from the Abercrombie & Fitch website and the Hennes & Mauritz website. Hennes & Mauritz AB-B SHS (2012) Bloomberg Business Week, Retrieved from http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=HMB:SS

Introduction to financial accounting

Introduction to financial accounting BY tearl 2242001 Finance – Introduction to Financial Accounting Introduction Financial accounts are the records of the financial dealings of the business, their every day transactions. The main role of financial accounting is to: Record financial transactions; e. g. collecting money from sales, paying suppliers, salaries and wages. Help the managers to manage the business more efficiently by preparing regular financial information e. g. onthly management accounts showing sales, costs and rofits against budgets, forecasting cash flows, cost investigations. Provide other stakeholders with legal/vital information (financial accounts: trading account, profit and loss, and balance sheet). ???Shareholders – how their investment is doing. ???Suppliers – can they give the business trade credit. ???Banks and lenders – can the business meet repayments of loans and risks of loaning the business money. ???Inland revenue – tax returns.

There's a specialist from your university waiting to help you with that essay topic for only $13.90/page Tell us what you need to have done now!


order now

The main accounting records kept by the business are records for keeping the details f transactions: Sales ledger: shows how much is owed by customers who have bought on credit. Purchase ledger: shows how much is owed by the business to suppliers who have provided goods and services on credit. Cash book and bank statements: shows all transactions involving cash (e. g. receipts from customers, payments to suppliers, employee wages). Nominal (or “General”) ledger: used to categorise the transactions of a business under headings e. g. ales of widgets, raw materials, electricity, and postage. These records are used to maintain the information that is used to make up the main financial statements. Hnanclal statements Financial accounting produces the following key documents: Profit and loss account – showing how the business has traded for a specific period. Balance sheet – a statement of the assets and liabilities of a business at a particular time, and how those assets and liabilities have been financed. Cash flow statement – a statement showing how cash has come into the business and what it has been spent on.

x

Hi!
I'm Sophie Gosser!

Would you like to get such a paper? How about receiving a customized one?

Check it out