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Types of information ?

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When you read the accounting information, What type of information do you need? User Types of needs to accounting information Investors/shareholders -       Assess how effectively the managers are running the business. -       Assess the ability to pay dividends. -       Make decisions to buy, hold or sell ownership shares of a company. Lenders -       Evaluate the risks of granting credit or lending money. -       Assess the ability to pay interest and repay the amount borrowed. Suppliers and other trade creditors. - Determine whether amount owned to them will be paid when due trade creditors are likely to be interested in an entity over a short period than lenders unless they are dependent upon the continuation of entity as a major customer. Customers -       Know if the company will continue to honor product warranties and support its products
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Answer for example (2)

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  Answer; 1-      Purchase price Cash paid Direct out of pocket Costs. 160.000 10.000   170.000 2-      Fair Values of the Net Assets Assets (-) Liabilities Current assets 120.000 Current liabilities 90.000 Plant assets 150.000 Long – term debt Face value      60.000 (-) discount (10.000) 50.000 Intangible assets 50.000     Total Assets 320.000 Total Liabilities 140.000 Net assets = total assets – total liabilities                   = 320.000 – 140.000 = 180.000 The change can be named as good will Purchase price – F.V. OF the net Assets. 170.000 – 180.000 = -10.000 “negative good will” So, the amount of negative good will (10.000) reduction as shown; The non- current Assets pro-rata as follows;   Non- current Assets
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Answer for example (1)

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  Answer; 1-  Purchase price Cash paid Direct out of pocket Costs. 500.000 50.000   550.000 2- Fair Values of the Net Assets Assets (-) Liabilities Current assets 280.000 Current liabilities 90.000 Plant assets 460.000 Long – term debt 280.000 Other assets 150.000     Total Assets 890.000 Total Liabilities 370.000 Net assets = total assets – total liabilities                  = 800.000 – 370.000 = 520.000 The change can be named as good will Purchase price – F.V. OF the net Assets. 550.000 – 520.000 = +30.000 “positive good will” Date Explanation Dr Cr March 31 1.purshase price Investment in ZARA Co.          Cash   550.000       550.000
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links between financial statement

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 links between financial statement  THE FINANCIAL STATEMENTS ARE LINKED AS SHOWN How do you can link between financial statements each others? try to configur the relation between financial staements as shown; Assets = Equity + Liabilities 1-  Assets are devided into cash and other assets.   - Cash is displayed in statement of cash flows.   - The result of statement of cash flow( Ending cash balance) is transferred to the cash value.   - And cash value is transffered to the beginning of the next year. 2-Statement of profit or loss explains the expenses and revenus and its result is transffered to the balance sheet at the credit side so, It usually added to the equity value.    -  The resulted value of net income reffers to a positive or negative value 3- The value of net profit can be an element resposible for the changes may appears on the statement of changes in equity.   - The  changes in equity depends on to variable they are the net profit and drawings.
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concepts and terminologies

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  -    Revenue is the benefit obtained by an industrial asset delivery of activity from the organization and susceptible to monetary quantification. -      The statement of changes in equity includes for each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period. -    The balance sheet reports on company’s financial position at a point in time, assets, liabilities and equity are the elements of the balance sheet. -    A statement of profit or loss as at the end of the period. -    The income statement reports on a company’s performance over a period of time (between two balance sheet dates), presenting the income, expenses and the difference between them. -    Liabilities are present obligation of entity to transfer an economic resource as a result of past events. -      Assets are present economic resources controlled by the entity     as a result of past events. -      A statement of cash flows summarizes informatio
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Static and dynamic model for working capital (WCR) measurement

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    The total of NWR (net working capital) = WCR + NLB (net liabilities) Where WCR = (AR (account receivable) + INV (inventories) – (AP (account payable) + NA( net accrual )   NLB = C (CASH)- STB (SHORT TERM LOANS)           
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Types of needs, need accounting information

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  Users Types of needs, need accounting information Investors / shareholders        المستثمرين / حاملى الاسهم -          Assess how effectively the managers running the business -          تقييم مدى فعالية المديرين الذين يديرون الأعمال -          Assess the ability to pay dividends -          تقييم القدرة على دفع الأرباح -          Make decisions to buy, hold or sell ownership               company -          اتخاذ قرارات شراء أو تملك أو بيع شركة ملكية Lenders المقرضين -          Evaluate the risks of granting credit or lending -          تقييم مخاطر منح الائتمان أو الإقراض Assess the ability to pay interest and repay the money borrowed تقييم القدرة على دفع الفوائد وسداد الأموال المقترضة Suppliers and other trade creditors -          Determine whether amounts owed to them will be paid when due. Trade creditors are likely to be interacted in entity over
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