So I will read and understand the handling of the settlement figures that I am planning to leave tomorrow so that they can be seen at first glance. One way of interpreting the financial report is to compute the ratio, meaning to split a specific number within the financial report, differently. Regardless of whether in the past performance or words, regardless of whether sales or net income was big or small for other years or other business, cancel the difference in company size using ratio I can do it.
There is not much ratio in financial reporting. Public enterprises need to report a single ratio (earnings per share, or EPS), private operators generally do not report arbitrary ratios. Generally Accepted Accounting Principles (GAAP) do not need to report ratios, except for EPSs of publicly owned companies.
But the ratio does not offer a limited answer. Though they are useful indicators, they are not the only factor in accurately measuring the profitability and effectiveness of the company.
One ratio of useful profitability indicators of the company is the gross profit margin. This is the gross profit margin divided by the sales revenue. The business discose information on the external financial report. This information is considered inherently unique and confidential to protect it from competitors.
Margin is very important in analyzing the company's bottom line. This shows how much net income you earned with each $ 100 in sales. Several very price competitive intense industries will show profit margins of only 1-2 percent, such as retailers and grocery stores, but a profit margin of 5-10%
Part of the income statement, part 3
Some lines of the profit and loss statement depend on estimates and forecasts, but the interest cost line is a basic formula. But when accounting for income tax expenses, business can use different accounting methods for part of the cost than to use for calculating taxable income. The assumed amount of taxable income when accounting method used is used for tax returns is calculated. Thereafter, the income tax is fitted based on this assumed taxable income. This is the income tax expense reported in the income statement. This amount is adjusted with the actual amount of income tax owed to the accounting method used for the purpose of income tax. The settlement of two different income tax amounts is provided in the footnote on the income statement.
Net income is something like profits before interest and tax (EBIT) and it varies significantly depending on the accounting method being used to report on sales and expenses Smoothing profit, profit It is a place where you can come to play to operate. Smoothing of profits is a matter of choosing acceptable accounting methods from the list of GAAP and implementing these methods in a reasonable manner from gray in profit and loss management with accounting operations
It is used to measure profits and answers the questions about asking for manager's involvement in determining how to account for how those methods are actually implemented, and our financial reporting Also go. It is therefore important that officers or managers of the company are familiar with how to prepare the company's financial statements. The method of accounting and the method you implement depends on your business. Company methods may fall anywhere in the continuum on either the left or the right of GAAP center.
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