Organisational Behaviour Essay example

Financial Accounting and Reporting
When a business operates they invest back into the business to create more products or services for the consumer. Then market these products of services and ultimately earn profit which is the main purpose of a business. All financial movement will be recorded in form of statements and that is called Financial Reporting Tool.
Financial Reporting
The purpose of financial reporting is to report the overall progress of the company and its financial activity in terms of the following. Sales, revenue and operating figures as well as loss or net profit.
The financial indicators mentioned above should be reported in a proper financial reporting system.
Balance Sheet: A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders. Balance Sheet is also important for investors to understand the financial standing of the business.
Profit and Loss Account: The purpose of the profit and loss account is to show whether a business has made a PROFIT or LOSS over a financial year and to describe how the profit or loss arose – e.g. categorising costs between “costs of sales” and operating costs.
A profit and loss account starts with the trading account and then takes into account all the other expenses associated with the business. This statement also shows how much Tax has been paid or forecasted.
Cash Flow Statement: shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and out of the business Cash flow statement reflects the cash position of the company and how this cash has been used for expenses such as loan repayment.

The income statements: The income statement shows what money in received by the company for product sales and the different services offered by a company. The income statement is also known as the profit and loss statement. It is used to show the company’s investors and its managers how the company made and lost money.

The statement of shareholders’ equity: The statement of shareholders’ equity shows the changes in the shareholders equity. It shows the remaining assets that are spread amongst the shareholders as individuals.
Shareholders, Investors and Management
Shareholders are keen to know that their investment is been used efficiently. They do this by checking the balance sheet.
Shareholders look for * How cash is being generated and its usage * Look at list of liabilities * Compare figures with the previous financial year * See growth of income and profit.
Investors examine income, cash flow and balance statements to determine whether they should invest in the business or not. It also gives them an Idea of loss and profits, initial investment and sales figures.
Management or Managers of an organization are responsible to evaluate the economic performance of the business and also do the planning for the future growth and expansion. Managers use financial statements to attract external investors to the business and also shareholders. Mangers use financial reports to keeping track of the money Regulation of the framework for financial reporting.
The purpose of Regulatory Framework of Financial Reporting is to ensure that reliable and relevant financial figures are been reported in Financial Statements and their balance sheets.

Things to consider before setting up a business
Ideas It is important that the business idea or product development idea would be crystal clear and this the first stage of planning to start of a business. Entrepreneurs should know what their business is and how they going to do it. Sometime after careful evaluation business basic

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