Study On Profit Being A Misleading Concept Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1337 Downloads: 2 Date added: 2017/06/26 Category Business Essay Type Analytical essay Did you like this example? The way in which a company uses the cash and profit generated through doing business, are recorded through cash flow sheets, profit and loss accounts and balance sheets. These documents show the numerical data which is vital for determining how successful the operations of the business are, indicating amounts of revenue, profit, cash and liabilities generated. Taking record of all company expenditure allows the business to manage the financial accounts and produce predictions for where they are heading. Any type of business, no matter the size, will treat cash and profitability as the core reason for operating; carefully managing both as the lifeblood of the firm, meaning that calculations produced can be used as an early warning system to detect troubling financial situations (Haskins, Higgs Ketz, 1987). In order for data sheets to be cross examined the entity must adopt a system of consistency, enabling comparisons to be made between financial periods (Gille spie Lewis Hamilton, 1997. pp 11). The concept of money measurement regulates what business can classify as wealth of the business; only items which can be measured in monetary terms can be included in the financial accounts, this withholding the right for business owners to regard excellent management or employee relations as assets (Chadwick, 1996). The figures shown in a cash flow sheet emphasises the level of liquidity and amounts of cash spent by a business within a given time period (Alexander, Britton Jorissen. 2009). Due to the complex nature of tracing where money has been spent and received from, businesss produce regular cash flow sheets in order to keep track of how it has financed its operations and to determine where funds have originated from i.e. revenue, capital or investment, as well as where they have been used i.e. purchasing of assets or stocks. Analysing cash flow sheets in this way, the user can clearly see that the figures shown are a detailed breakdown of information contained within the balance sheet and the profit and loss account. Haskins, Higgs Ketz (1987, p 39) believe that Firms with excellent products, new equipment, and creative marketing efforts have gone out of business because they mistook income-statement profitability for cash solvency. The accounting concepts involved in calculating such figures like profit and loss and gross profit can prove to be complex as many problems could arise while trying to record where money has come from and where it has gone. The use of a principle known as Duality helps to keep track of where money has come from and where the money has gone. It states that every transaction within a business has a dual effect on the accounts. i.e. the source of wealth and the application of said wealth (Alexander, Britton Jorissen. 2009) The acquisition of new or the improvement of existing assets is known as capital expenditure, whereby such investment in business can result in increased earni ng capacity by lowering the cost of production or increasing output. All assets acquired come with a historic cost, this is the price paid for the item when purchased. It is said that no expense arises because of the ownership of the asset; an expense arises when the asset is used up in earning revenue. (Gillespie Lewis Hamilton, 1997. pp 74). This meaning that items owned are assigned a depreciation value, showing in the accounting sheets that it will not last forever and that its value decreases over time. All moneys expelled by the business in terms of running or essential costs are recorded as revenue expenditure. The amount of revenue available to be spent in this way is governed by an accounting concept known as going concern, this assuming that a company will indefinitely be able to stay operational due to its ability to generate enough cash to stay out of liquidation (Alexander Britton Jorissen. 2009). A profit and loss account compares the amount by which the expense s of a business have exceeded their revenue, thus revealing the net profit gained. The equation for this is demonstrated by Profit = Revenue Expenses. The revenue referring to the income of cash generated by the businesss activities and expenses referring to all moneys paid by the company in order to create the said revenues. This in comparison with to a balance sheet which shows, The increase in equity caused by making a profit (Gillespie Lewis Hamilton, 1997. pp 65) which allows a user to easily determine figures such as working capital and on to ratios to find out whether or not a company is highly geared. It has been argued that profit accounts may not always provide an accurate or meaningful projection of a companys financial operations, unless based upon its future cash flow rather than past incomes. (Purr, 2004) The amount of profit and loss earned by a business during an accounting period is measured on a profit and loss account; however, they do not specify what has h appened to the funds, allowing them to be in their current condition (Chadwick, 1996). The differences in the data entered into a profit and loss account and a balance sheet show the user key individual figures. The data entered must be accrued, recognising that figures are input when the transaction takes place, not when the actual funds are received or paid; the aims of this accounting principle are to align the costs and revenues in the period to which they relate, allowing for comparisons to be made. This part of accounting is known as matching which helps to giving an accurate picture of the companys current inflow and outflow of cash as well as a record of when transactions have taken place (Chadwick, 1996). A balance sheet is a financial statement which informs the user of the businesss status in regards to the amount of assets it employs, including anything it owns or has paid for that is connected with the operations of the business, for example, land, stock, materials a nd cash in the bank. While also taking into account the amount of liabilities a business has, this including all money which is owed to creditors. A balance sheet is a summary of where all the money has come into the business has come from and where and how it has been distributed at the beginning and end of an accounting period (Chadwick, 1996). The figures displayed in a standard balance sheet enable the user to calculate the amount of profit gained additionally a detailed list of assets, fixed i.e. items bought for the use of the business and current i.e. any moneys which are due to be earned by the firm, for example, debtors and stocks . The assets are deducted from the total amount of liabilities employed; these can be classified as anything which results in an outflow of resources and is something which the company owes. The equation employed on a balance sheet is shown as Assets Liabilities = Capital. The figure produced will show the reader the financial differences between everything the business owns and everything it owes. However, under further investigations, the limitations of a balance sheet can be seen as they cannot show the movements in capital, long-term debt and assets or liabilities. (Chadwick, 1996). The relevance of profit and cash can be disputed, depending on the financial accounts of the business at that time. While businesses are eager for long term profits within their company, careful account managing must be adopted to insure that there is enough short term cash or working capital at their expense, enabling them to stay afloat, ensuring that sudden unexpected outgoings can be subsidised. It represents the difference between the current assets and the current liabilities. In effect it keeps the wheels of the business turning by financing the everyday type of operating transactions (Chadwick, 1996. pp 59). The importance of having an abundance of day-today cash has been duly noted, although businesss must carefully manage the le vels of finance, as cash sitting in the bank could be better spent elsewhere, improving assets which would in turn would produce more long term profits. Don’t waste time! Our writers will create an original "Study On Profit Being A Misleading Concept Finance Essay" essay for you Create order

The Core Layers Of Defense - 1232 Words

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“Grandfather” and Gandalf Free Essays

The well-known adventure novel The Hobbit by J. R. R. We will write a custom essay sample on â€Å"Grandfather† and Gandalf or any similar topic only for you Order Now Tolkien and the historical fiction novel Chains by Laurie Halse Anderson both exemplify the use of the â€Å"wise old man† archetype through the characters Gandalf and â€Å"Grandfather. † Although the former is a powerful sorcerer and the latter is a vulnerable slave, both act as sagacious advisors for the stories’ main protagonists—Bilbo and Isabel. At one point in the Chains text, when Isabel (a slave girl) goes to the town’s pump to get her water, Grandfather says to Isabel, â€Å"A scar is a sign of strength†¦ Look hard for your river Jordan, my child. You’ll find it. † Grandfather shows his wisdom by encouraging Isabel to search for her own freedom beyond the River Jordan, which, in this case, symbolizes the final obstacle she must face before reaching liberty. In the first part of the quote, Grandfather implies that Isabel will encounter a huge obstacle that might hinder her way to freedom, but he says that she must use her perseverance in order to endure it. Similarly, in The Hobbit, Gandalf frequently gives advice to, and encourages, the easily depressed Bilbo in order to persist even though he (Bilbo) may run into dangers along the journey. While both Gandalf and Grandfather are wise, they differ in many ways, including the aspect that Gandalf possesses powerful abilities that make him as near as invincible. When Gandalf uses undefeatable powers to rescue Bilbo and the dwarves from a goblin stronghold, the narrator of the story describes, â€Å"Just at that moment all the lights in the cavern went out, and the great fire went off poof! nto a tower of blue glowing smoke, right up to the roof, that scattered piercing white sparks all among the goblins. † In fact, Gandalf proves to be so powerful that he even has the capacity to electrocute hundreds of goblins in a matter of seconds. On the other hand, Grandfather, a helpless slave, does not possess any of the apparent physical capabilities that Gandalf possesses; Grandfatherâ€⠄¢s only conspicuous characteristic seems to be his judiciousness, a quality formerly referenced as a similarity between Grandfather and Gandalf. Although the two characters, Gandalf and Grandfather, come from completely different backgrounds—one has a significant physical advantage over the other—both still share the same intellectual qualities as wise men who dedicate to the success of their fellow colleagues and eventually help them achieve their goals. To apply this comparison to a global truth, a person may be born with more abilities or a better status than another, but there is ultimately nothing that prevents the person from having as equally successful results as the other. How to cite â€Å"Grandfather† and Gandalf, Papers

Erikson and Piaget free essay sample

Erikson versus Piaget: Active and Passive Learning Billy Jenkins Grand Canyon University: PSY 650 January 27, 2012 Abstract In this paper, the idea of active versus passive learning is discussed, as well as the major learning theories of Piaget and Erikson. Furthermore, their major learning theories are compared to each other and applied to the principles of active and passive learning. Because of my teaching and classroom experience, the application of active and passive learning will be applied to childhood development and learning. In addition, the learning theories of Piaget and Erikson, and their similarities and differences in relation to passive and active learning, will be applied to the classroom as well. Active versus Passive Learning According to Petress (2008), active and passive learning is often discussed in education journal articles and presented to teachers at in-service meetings. Active learning is the opposite of passive learning just as the active learning student is different from the passive learning student. The passive student is solely dependent on the teacher and what the teacher teaches in the classroom. The active learner depends slightly on the teacher, but takes learning a little further toward individualized, intrinsic learning. They are not overly dependent on a teacher because actively learning makes the student a partner in the process of learning. Teachers are often used as a resource for the active learners†¦ a resource that guides the learning process and motivates further educational learning. Passive learning requires little student involvement or overt work, and it is not self-reinforcing. On the other hand, according to Petress (2008), active learning is self-reinforcing and the student is intrinsically motivated to learn because learning is enjoyable, motivating, and extremely effective in getting tasks done. The difference between the two learners is that information learned passively will not be retained well and is not as effective or enthusiastically applied, whereas information learned actively will be retained better and is more effectively and enthusiastically applied to other areas of learning. Characteristics of Active and Passive Learners Active learners can frequently be observed performing such behaviors as: asking clarifying questions to stimulate further learning, challenging ideas to increase intellect and social dialogue, following up on learning through personal extensions by applying what is learned, connecting recently learned material with previously learned material, discussing learned concepts with others, keeping an enthusiastic attitude toward learning, exchanging and sharing views, and keeping an open mind to increase reasoning skills (Drew, 2011). On the other hand, according to Drew (2011), passive learners can frequently be observed exhibiting behaviors such as: diminished motivation and enthusiasm toward spontaneous learning, minimal transference of what is learned, a stunted retention because learning is not connected, minimal questioning, and infrequent exchanging of views. Classroom Implications Teachers seem to have an easier and more successful task in dealing with and instructing active learners as opposed to passive learners. This is due in part because active learners realize that the material presented by the teacher or the readings required in the classroom seem to be difficult which prompts the active learner to ask clarifying questions to avoid major difficulties later. Passive learners, on the other hand, often fail to realize the small barriers to learning until they become major ones. Consequently, active learners seek help or tutoring with difficult concepts sooner than the passive learners because the passive learners wait until the barriers are often insurmountable. In the classroom, active learners help teachers by providing relevant examples often adding to the classroom dialogue; whereas passive learners typically refuse providing examples thus blunting class dialogue (Petress, 2008). Consequently, according to Petress (2008), active versus passive learning behaviors do not disappear when students leave school and enter the workforce. Thus, the active learner typically has better opportunities for advancement than do passive learners. Often passive learners adapt in the workforce, but the process is often slow and painful. Obviously, active learning is the preferred way of learning. Teaching, rewarding, and promoting active learning is easiest when begun early. Teachers, parents, and other stakeholders working with students need competent instruction that can easily be applied toward rewarding, reinforcing, and extending the active learning behaviors. Piaget According to Belsky (2010), Piaget was an advocate and strong believer that children learn through hands-on experiences. He believed that children learn by acting on and in the physical world, meaning that children learn by experiencing what is around them. Piaget categorized learning into four stages of development, sensorimotor, preoperations, concrete operations, and formal operations. In the sensorimotor (ages 0-2), infants learn by manipulating objects, thus equating this manipulation to the basics of physical reality. In the preoperations stage ages 2-7), children’s perceptions are built upon their immediate appearances, meaning whatever they see, is reality. In the concrete operations stage (ages 8-12), children begin to develop a more realistic understanding of what is around them, but abstract thinking is often difficult or lacking. In the formal operations stage (ages 12+), reasoning is at its peak and children begin to think hypothetically until full cognitive potential is reached. Jean Piaget’s work has greatly influenced constructivist educators through what we now call discovery learning. Fogarty (1999) explains that Piaget’s main theory premise is that the learners’ interactions lead to structural changes in how they think based on data assimilation.