conditional statement

Examples of conditional statement in the following topics:

• Financial Statement Notes

  • While the Income Statement, Balance Sheet, Cash Flow Statement, and Statement of Retained Earning contain all numeric information about the company, these numbers often require a better explanation.
  • Notes to financial statements are added to the end of financial statements.
  • They also provide a more comprehensive assessment of a company's financial condition.
  • The notes clarify individual line items on the various statements.
  • Notes on the financial statements convey specific information about the line-items on the statement.

• Basic financial statements

  • The Balance Sheet will show you the financial condition of your business, what you own, what you owe, and the owners' financial interest.
  • You will sometimes hear the Income Statement referred to as the Profit and Loss Statement and the Balance Sheet called the Statement of Financial Condition.
  • This is, of course, a relatively simple example to illustrate the general outline of an Income Statement, but it should give you an appreciation of why the Income Statement is important to the owner of any business.
  • You can also see why it is sometimes called a statement of financial position.
  • It shows the condition of the business, in financial terms, as of a specific date.

• Comparisons Within an Industry

  • Financial statement analysis (or financial analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions.
  • These statements include the income statement, balance sheet, statement of cash flows, and a statement of retained earnings.
  • Financial statements can reveal much more information when comparisons are made with previous statements, rather than when considered individually.
  • Vertical analysis, which is a proportional analysis of financial statements, lists each line item in the financial statement as the percentage of another line time.
  • For example, on an income statement each line item will be listed as a percentage of gross sales.

• Selected Financial Ratios and Analyses

  • Analyzing a company's financial statements allows interested parties (investors, creditors and company management) to get an overall picture of the financial condition and profitability of a company.
  • There are several ways to analyze a company's financial statements.
  • When using comparative financial statements, the calculation of dollar or percentage changes in the statement items or totals over time is horizontal analysis.
  • Vertical analysis is usually performed on a single financial statement (i.e., income statement): each item is expressed as a percentage of a significant total.
  • Summarize how an interested party would use financial ratios to analyze a company's financial statement

• Balance Sheet Analysis

  • A balance sheet is often described as a "snapshot of a company's financial condition".
  • Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.
  • Financial ratio analysis should be based on regrouped and adjusted financial statements.
  • These statements are also used as part of management's annual report to the stockholders.
  • Media and the general public are also interested in financial statements for a variety of reasons.

• Pro Forma Income Statement

  • A pro forma income statement is planned and prepared in advance to of a transaction to project the future status of the company.
  • Consequently, pro forma statements summarize the projected future status of a company, based on the current financial statements.
  • For example, when a transaction with a material effect on a company's financial condition is contemplated, the Finance Department will prepare, for management and Board review, a business plan containing pro forma financial statements demonstrating the expected effect of the proposed transaction on the company's financial viability.
  • The income statement is a company's financial statement that indicates how the revenue is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as Net Profit or the "bottom line").
  • A pro forma Income statement could be planned and prepared in advance, which includes the items below:

• Defining the Financial Statement

  • Financial statements report on a company's income, cash flow and equity.
  • A financial statement is a formal report of the financial activities of a business, person, or other entity.
  • An entity's financial statement typically includes four basic components: a balance sheet, income statement, cash flow statement, and statement of changes in equity:
  • A balance sheet is often described as a "snapshot of a company's financial condition" at a single point in time.
  • A statement of changes in equity explains the company's equity throughout the reporting period.

• Full-Disclosure Principle

  • Depending on its nature, companies should disclose this information either in the financial statements, in notes to the financial statements, or in supplemental statements.
  • To be free from bias, information must be sufficiently complete to ensure that it validly represents underlying events and conditions.
  • Required disclosures may be made in (1) the body of the financial statements, (2) the notes to such statements, (3) special communications, and/or (4) the president's letter or other management reports in the annual report.
  • An opinion is said to be unqualified when the auditor concludes that the financial statements give a true and fair view in accordance with the financial reporting framework used for the preparation and presentation of the financial statements.
  • The financial statements have been prepared using the generally accepted accounting principles which have been consistently applied;

• Comparing the Fields of Finance, Economics, and Accounting

  • Finance is the study of how to optimally allocate assets—how individuals and organizations should invest assets in order to get the highest possible return given changing conditions over time.
  • If accounting is called the language of business, then the financial statements that accountants prepare are the words .
  • Statements are created under a standardized set of accounting laws, which allows one to easily compare and contrast companies.
  • The balance sheet is one of the three main financial statements.
  • The other two are the cash flow statement and the income statement.

• Shelf Registration

  • The prospectus (often as part of a registration statement) may be used to offer securities for up to several years after its publication .
  • Before each offering and sale is actually made, the company must file a relatively short statement regarding material changes in its business and finances since the shelf prospectus was filed.
  • Shelf registration is a registration of a new issue which can be prepared up to two years in advance, so that the issue can be offered quickly as soon as funds are needed or market conditions are favorable.
  • By using shelf registration, the firm can fulfill all registration-related procedures beforehand and go to market quickly when conditions become more favorable.
  • Firms often use universal shelf filings and choose between debt and equity offerings based on the prevailing relative market conditions.