Provide Financial And Business Performance Information

Provide Financial And
Business Performance
Information

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Individual types of expenses and incomes.........................................................................1
2. Reconciliation of opening and closing retained earnings..................................................2
3. Permissible for a reporting entity to treat expenses directly as a reduction to retained
earnings...................................................................................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Financial information important for business because it can present business in front of
shareholders and other persons who are connected to company. Every company has been used
their financial statement to perform their performance in front of investors to attract them
(Qrunfleh and Tarafdar, 2014) . It can attract to investors to invest in and show how can they
survive for long time and get success easily. To understand the concept of report selected
organisation Woolworth group limited. It is a major Australian company with extensive retail
interest throughout Australia and New Zealand. In the report reviewing the financial statement
and supporting notes of a reporting entity. There are find out all types of expenses and income
which is used in financial statements. In further the statement of comprehensive income provide
a reconciliation of opening and closing retained earnings.
MAIN BODY
1. Individual types of expenses and incomes
Every organisation prepare their financial statement that are divided into different parts
like Profit and loss statement, balance sheet and cash flow statement. In the reports shows
different financial information which can important for investors and other members who can
connect to the company in direct and indirect way. In these statements prepare special notes that
can show how to take amounts and calculate with particular formulas. These expenses and
incomes can divided as per their nature. The company Woolworth can categorised their expenses
and income as per requirement and easily under stable.
The company has carried out different types of expenses which are – operating expense
capital expenditure, fixed & variable expenses. As per the income statement of Woolworth
company analysing income statement of the company so there are recognised cost of goods sold,
cost of doing business, selling, general and administration expenses, rent and net financing cost
(Wu, Chuang and Hsu, 2014). As per notes fixed charges cover in EBITDA and divided by rent
and interest cost. Rent and interest cost consist of capitalised interest but exclude foreign
exchange gains/losses and dividend income. There are identifying income of the company that
has been gross profit, gross profit margin, EBIT (where earning before interest & tax). At the end
earning profit/loss after tax and before significant items. So it is possible to find out all
individual income and expenses easily. Some time few income and expenses can not show
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individualize because it is not important to show in income statements. The reason of should not
disclose because it can affect to image of the company (Yu and et.al, 2013) .
2. Reconciliation of opening and closing retained earnings
The statement of comprehensive income can provide summary of the net assets in
reference to the company in specific time period. In addition words, these statements can point
out to those adjustments on equity in particular time frame. With the help of this statement
carried out two main things which is net income and other comprehensive income. In net income
defined about the income statement of company and in other comprehensive income consist of
negative and positive amounts of foreign currency translation and hedges and also some other
items.
The comprehensive income can not provide reconciliation of opening and closing
retained earnings so it can be found in the statement of retained earnings. The statement of
retained earnings is a financial statement that is prepared to reconcile the beginning and ending
retained earnings balances. Retained earning are the profits or net income that a company choose
to keep rather than distribute it to the shareholders. In addition words, the particular statement is
structured as an equation and it is starting with the balance of retained earning in the starting of
particular accounting period. The statement has been prepared on quarterly, monthly and
annually basis and time to time net income will be added in net time period. From the particular
amount paid any dividends after that subtracted out.
3. Permissible for a reporting entity to treat expenses directly as a reduction to retained earnings
Retained earning amount of the income that a company keeps for use within the business.
Through this money operate and conduct business activities with smoothly way and there are
various way that can affect to retained earnings and reduce their amount (Baños-Caballero,
García-Teruel and Martínez-Solano, 2014) . There are defined those causes -
 Dividends – It is directly less from retains earnings rather than top show in profit and loss
account. Dividend can less from the beginnings of the retained earnings after that
remaining amount consider as retained earning end of the project.
 Reserves – The amount of transfer of reserve directly less from retained earnings for
securing future risk. These reserves can deduct amount from begging from retained
earnings after than get amount of ending balance of retained earning.
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CONCLUSION
As per the above report it has been concluded that every business can prepare financial
statement in effective manner and shows their performance. In these reports include different
types of expenses and income to provide all financial information. The retained earning can be
reconciled through statement of retained earnings and it will be affected through net income and
additional paid up capital.
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REFERENCES
Books and Journals
Qrunfleh, S. and Tarafdar, M., 2014. Supply chain information systems strategy: Impacts on
supply chain performance and firm performance. International Journal of Production
Economics. 147. pp.340-350.
Yu, W. and et.al, 2013. The effects of supply chain integration on customer satisfaction and
financial performance: An organizational learning perspective. International Journal of
Production Economics. 146(1). pp.346-358.
Baños-Caballero, S., García-Teruel, P. J. and Martínez-Solano, P., 2014. Working capital
management, corporate performance, and financial constraints. Journal of Business
Research. 67(3). pp.332-338.
Ducassy, I., 2013. Does corporate social responsibility pay off in times of crisis? An alternate
perspective on the relationship between financial and corporate social
performance. Corporate Social Responsibility and Environmental Management. 20(3).
pp.157-167.
Wu, L., Chuang, C. H. and Hsu, C. H., 2014. Information sharing and collaborative behaviors in
enabling supply chain performance: A social exchange perspective. International
Journal of Production Economics. 148. pp.122-132.
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