Professional Documents
Culture Documents
Importance of Financial Results
Importance of Financial Results
results
What are accounts and why are they
important.
Financial records of a business are called
accounts.
Accountants are responsible for keeping them up
to date and accurate.
Atthe end of the Financial year, they will
produce the FINAL ACCOUNTS
Why is profit
important in a business
Why is profit important?
Profit=TR-TC(cost of making the product)
WHY IS IT IMPORTANT?
1. REWARD FOR THE ENTREPRENEUR- successful entrepreneurs have
many qualities and profits gives them the reward for these.
2. Reward for risk taking-entrepreneurs take a lot of risks for starting
a business and profits gives the a motivation and incentive to
continue investing in the business.
3. sources of finance-it used a sources of business finance and mainly
for expanding the business.
4. indicator of success-it gives signals to other new entrepreneurs
that a given business is profitable.
FINACIAL STATEMENTS
Financial statements are written records that convey the business activities and the
financial performance of a company.
$37000
Electricity 6000
Rent 3000
Depreciation 5000
Advertising 5000
$31000
Sales $1250
($000)
Sales Revenue 280
Tax paid 40
Operating expenses 30
Cost of sales 100
Interest paid 15
dividends 25
Balance sheets
It shows the value or net worth of a business.