financial statement
The Unsecured Personal Loans
A comfortable life is what we all dream of. But generally many of you might not be able to save funds because of rising cost. To meet various important financial needs one can definitely think of loans but worried that you don’t have any collateral to offer for loans? If this is what bothering you then you need not worry. Unsecured personal loans are a good option that on can easily trusts on in important financial needs.
These loans can be used for meeting basic personal requirements like medical expenses, car purchasing, debt consolidation, vacation and home improvement etc. one can also grab the finance for the purpose of cosmetic treatment or expansion of business.
Unsecured personal loans are free from collateral obligation and don’t compel you to offer any asset as security. Without placing asset one can borrow a loan amount varying from $1000-$25000. The repayment term of these loans is short and stretches from 1-10 years only. The rate of interest charged is slightly higher for these loans due to the unsecured nature these loans.
This is a perfect and reliable option for tenants and non-homeowners. Also, homeowners who do not want to risk their valuables can also apply and are eligible for these loans.
Moreover, Borrowers who have a bad credit records can also approach and are eligible. Your bad credit records like arrears, late payments, missed payments, IVA and such records will not be a hindrance. One can borrow anything suiting their financial needs and repaying capability.
Online is the fastest way to apply. Online research is quite beneficial and by doing some research work one can fetch some great deals convenient. Also you can search for deals and compare them to bag the best one offering low interest rates.
These personal unsecured loans are a great way of getting cash help conveniently without pledging your valuables.
By: Rusty Ryan
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Communicate Using Financial Statements
“Recently, a number of our clients have negotiated with the bank for a lesser level of service,” says James A. Koepke, CPA, director at Doeren Mayhew. “They’ve gone from an audit to a review, or a review to a compilation, to save money. Most of it comes from the economy getting tight and looking to save money wherever they can. They are looking at the services across the board and, in essence, an attempt to save fees whenever possible.”
How can a business owner make sure that financial statements are used properly?
The elementary thing that business owners have to do is determine who uses the financial statements and how confident they are in their staff putting together the statements. How much do they want someone to oversee or test the numbers and information being put together? We have some clients who request us to do an audit, examining supporting documentation for various transactions, physically observing inventory and observing pricing. Even though they don’t need it for outside use, they want to feel comfortable going to sleep at night knowing that their numbers are good numbers.
Then we have others who, at the end of year, say, ‘I get a tax return, and basically I trust my people giving me numbers. I’ll just have an outside CPA firm come in and assemble the proper financial statement.’ That’s a compilation report, and we don’t express any opinion in those. In an audit, we express an opinion on the financial statements.
What options does a company have?
A lot of times, clients don’t understand their options. I’ll be performing a compilation, and the client will get a call and say, ‘I can’t talk to you right now, the auditor is here.’ For that client, I’m not an auditor. I think the best thing they can do is talk to their CPA and say, ‘What do I need? Are there requirements? What are the different levels of service?’ Have it explained, because I don’t think a lot of them understand the difference. A compilation is the lowest level. It provides no assurances on financial statements.
A review consists of limited procedures and provides limited assurance on the financial statements being presented. An audit includes auditing the systems, obtaining evidence for documentation and a number of transactions, testing the client’s systems to make sure they’re being applied appropriately, and providing positive assurance on the financial statements being presented.
How can someone use their financial statements to get more money?
Lenders look at various key items, including the entity’s ability to generate cash from operations. Some will look at working capital or debt-to-equity ratios. A lot of outside parties like to see a lot of cash. By delaying paying some bills at the end of the year and paying them on Jan. 1 or 2 instead, businesses can show more cash at the end of the year. If they have some lines of credit or current borrowings, you can often get the banks to set an expiration date on the line of credit greater than a year from the financial statement date, so it shows as a long-term liability and not a current liability. Sometimes just changing the presentation of an item makes financial statements look better to an outside user.
How can managing inventory properly help a financial statement?
Make sure you’re including all indirect costs of producing items in inventory costs, which will shift some of the cost to the balance sheet and improve the income by increasing inventory amounts on financial statements. In summary, a good CPA can help clients pay for only what they need or help them negotiate with lenders to reduce their requirements. In addition, some simple changes in financial statement presentations can dramatically alter the way users of the information look at the company.
By: Doeren Mayhew
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Reading The Financial Statements
As you consider which legal entity or entities–corporation, limited liability company, or limited partnership–you want to use for your business structure, the decisions you make will depend heavily on your current financial situation, both personal and professional. But do you know how to read a financial statement on your own? Do you know how to read your own personal and business financial statements?
Knowing how to do this is an essential skill not just for entrepreneurs but for everyone. However, for the entrepreneur having this skill can mean the difference between having a thriving business that continues to thrive and winding up in bankruptcy. The annals of the bankruptcy courts are strewn with cases of entrepreneurs who entrusted their accounting to others and, not knowing how to read the financial statements of their own businesses, were surprised when they found that the business was ultimately unsustainable. The purpose of this article is to help prevent this from happening to you–and to arm you with the skills you need to structure your business to your benefit from the outset.
Your Two Major Financial Statements
There are two major financial statements that every entrepreneur should know how to read and (ideally) prepare or have prepared in their financial software (we recommend QuickBooks):
The Income Statement
The Income Statement (also known as the P&L or Profit and Loss Statement) offers a dynamic picture of the ebb and flow of your finances. Briefly, income statement shows first: A. Your various sources of income Then subtracts from that, B. Your expenses To give you the net result: Net Profit or Loss Typically, it is the result shown on this statement that is the basis for your taxation by state and federal authorities at the end of the year. The net income or loss (revenue outgo) is carried over onto your second major financial statement: The Balance Sheet.
The Balance Sheet
Offers you a snapshot of cumulative results of your financial activities. It is made up of two columns:
On the left side you have your Assets
On the right are listed your Liabilities and Owners/Shareholders Equity (or ownership in the business). The two columns must be in balance, which is why this is called a Balance Sheet.
Assets=Liabilities + Equity
It’s really quite logical how the Income Statement and Balance Sheet relate to one another.
If you have to use current or long-term assets to pay ongoing expenses during the current year, at the end of the year, the amount of your assets will be reduced by the amount of net loss. On the right hand side, your Equity has gone down too. If you borrowed, say $10,000 to pay current operating expenses, at year end, your assets remain the same, but your liabilities have increased by $10,000, lowering your net Equity or ownership in the company by that same $10,000.
It doesn’t take a rocket scientist to figure out that if you continue on this path, you will quickly be in a very painful situation, because Liabilities carry their own cost. The cost of borrowing money is Interest, and if you are fortunate enough to borrow at only 10% interest (on unsecured debt) today, a year from now, you will have to pay $11,000 to pay off the original $10,000 debt. This reduces your equity still further–unless you have used the borrowed funds to create more assets that increase in value at the same rate as the interest on your debt or, better yet–at a higher rate.
More to the point for deciding which business entities to use is that you need to work out both your personal financial statements and those of your business(es). If you find, for example, that that you have significant salary or wage income in your personal financial statements that is causing you to pay out high taxes (as reflected in your balance sheet), and you expect that your business will generate some significant losses for the first several years, it would be advantageous to you to use a business entity that is a flow-through entity. Losses incurred by your S-Corporation (or, if you prefer, your Limited Partnership or your Limited Liability Company) will flow onto your personal balance sheet to offset the salary or wage income and thus reduce your tax liability.
Moreover, in general, if you want to draw up a roadmap to getting where you want to go, you need to know your point of departure. Thus, preparing and understanding your personal and business financial statements is an indispensable first step for your business planning.
By: Germaine A. Hoston
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The Financial Statement Analysis
All financial statements are essentially historically historical documents. They tell what has happened during a particular period of time. However most users of financial statements are concerned about what will happen in the future. Stockholders are concerned with future earnings and dividends. Creditors are concerned with the company’s future ability to repay its debts. Managers are concerned with the company’s ability to finance future expansion. Despite the fact that financial statements are historical documents, they can still provide valuable information bearing on all of these concerns.
Financial statement analysis involves careful selection of data from financial statements for the primary purpose of forecasting the financial health of the company. This is accomplished by examining trends in key financial data, comparing financial data across companies, and analyzing key financial ratios.
Managers are also widely concerned with the financial ratios. First the ratios provide indicators of how well the company and its business units are performing. Some of these ratios would ordinarily be used in a balanced scorecard approach. The specific ratios selected depend on the company’s strategy. For example a company that wants to emphasize responsiveness to customers may closely monitor the inventory turnover ratio. Since managers must report to shareholders and may wish to raise funds from external sources, managers must pay attention to the financial ratios used by external inventories to evaluate the company’s investment potential and creditworthiness.
Although financial statement analysis is a highly useful tool, it has two limitations. These two limitations involve the comparability of financial data between companies and the need to look beyond ratios. Comparison of one company with another can provide valuable clues about the financial health of an organization. Unfortunately, differences in accounting methods between companies sometime makes it difficult to compare the companies’ financial data. For example if one company values its inventories by the LIFO method and another firm by average cost method, then direct comparisons of financial data such as inventory valuations are and cost of goods sold between the two firms may be misleading. Some times enough data are presented in foot notes to the financial statements to restate data to a comparable basis. Otherwise, the analyst should keep in mind the lack of comparability of the data before drawing any definite conclusion. Nevertheless, even with this limitation in mind, comparisons of key ratios with other companies and with industry averages often suggest avenues for further investigation.
An inexperienced analyst may assume that ratios are sufficient in themselves as a basis for judgment about the future. Nothing could be further from the truth. Conclusions based on ratio analysis must be regarded as tentative. Ratios should not be viewed as an end, but rather they should be viewed as a starting point, as indicators of what to pursue in greater depth. They raise may questions, but they rarely answer any question by themselves. In addition to ratios, other sources of data should be analyzed in order to make judgments about the future of an organization. They analyst should look, for example, at industry trends, technological changes, changes in consumer tastes, changes in broad economic factors, and changes within the firm itself. A recent change in a key management position, for example, might provide a basis for optimism about the future, even though the past performance of the firm may have been mediocre.
Few figures appearing on financial statements have much significance standing by themselves. It is the relationship of one figure to another and the amount and direction of change over time that are important in financial statement analysis. How does the analyst key in on significant relationship? How does the analyst dig out the important trends and changes in a company? Three analytical techniques are widely used; dollar and percentage changes on statements, common-size statements, and financial ratios formulas.
By: Rashid Javed
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The Rules Of Personal Finance
Like the standard allocation of bonds and stocks based on age, the rule-of-thumb has been to hold the same percent of bond funds as your age, so the older you get, the more bonds you will have in your account.
For many people, that’s as far as their knowledge of asset allocation goes, but in today’s market, that’s not far enough. This begs the question, “What does it mean to be diversified?” It used to mean that you let your financial adviser pick out some growth funds, some income funds, and (if you were bold) a sector fund. The rest was kept in bonds. Individual stocks were frowned upon as posing too much risk.
Now we know that many stocks chosen to provide mutual funds’ stellar performances were risky, but somehow no one noticed. In hindsight we’ve learned that the returns on those trusty funds were no better than the Wall Street companies who were fabricating puffed up returns using artificial financial “tools.” And we thought they were safe. Oops.
John C. Bogle of Vanguard still stands by his products, and rightly so. Vanguard Mutual Funds were some of the best for over 30 years. He still holds by the bond vs stocks rule-of-thumb, but his approach probably won’t right the destruction wreaked on America’s retirement accounts. (Like mine for one!) And the steep curves of the S &P are still making most investors nervous about how to plan their personal finances in the future.
For years retirement planning was the result of mapping out a financial plan of how much you would need to live on once you’ve retired, and then figuring out how to pay for it. A combination of social security, savings, IRAs, or other financial investments once added up to a fairly predictable equation. Unfortunately, it’s been disrupted by the unexpected disclosure that our economy is teetering on disaster. Market globalization is moving the power of equity to those countries that have developing economies and the best-educated students. Hmmm. What are we to do?
First, if you can’t beat ‘em, join ‘em. Investing in foreign stocks may seem very un-American, but that’s where the growth is.
Second, think differently about diversification. Do you own real estate? Foreclosures make attractive investments. Do you own precious metals? Are you aware of the new types of equities that are trading on the stock market? Do you take time to learn about global economic trends and how that might help to enhance your retirement goals in the next 5-10 years?
A year ago, I took a look at my personal finances and realized my investments were hardly diversified. My financial adviser had done well when the market went up. Then it bombed and so did all if the mutual funds in my account. I decided to take back control with the help of information provided through Wealth Masters International (a company that helps people to get their personal finances back on track and provides comprehensive knowledge of global trends for asset decision-making). Since last July 2008 I’ve been allocating my assets differently and seeing real results. I’ve also been taking WMI’s recommendations. I’ve done my own financial research, and put together a diversified group of stocks and EFT’s in my portfolio. Again, with some knowledge, the choices are more obvious than you’d think.
So even though there are new rules when it comes to investing, if you keep an eye on diversification and global trends, you’ll be putting the odds in your favor.
By: Betsy Shulman
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Financial Statements to Interpret the Profit
Financial statements are a useful tool for judging the health of a company, and for comparing it to its competitors. They show what the company owes and owns, the profits or loses it has made over a given period, and how their position has changed since their last statement. Generally if you can tell which direction a company is heading in, you can also forecast future stock prices with some accuracy.
Gaining a basic knowledge of financial statements, and applying this knowledge when choosing or assessing investments can help you pick tomorrow’s winning stocks, while avoiding tomorrow’s losers.
Of course, financial statement analysis will not always factor in significant news events, unexpected incidents, changes in management, and other factors which may influence share prices, but it provides a starting point from which to gauge the present value of shares, independent of future occurrences.
The following report details some simple financial statement explanation and analysis methods. Although the topic can get much deeper and more complex, this article is designed to give investors the ability to understand the numbers and simpler of financial ratios, and be able to use that knowledge to assist them to make better decisions when doing their due diligence.
Balance Sheet
The balance sheet shows a company’s financial position at a specific date, usually the last day of the company’s fiscal year for annual reports. One side of the balance sheet shows what the company owns and has owing to it, called assets. The other side represents liabilities, which are what the company owes, and also has shareholders’ equity, which represents the excess of the company’s assets over its liabilities. Shareholder’s equity is often referred to as book value.
Total assets are equal to the sum of the company’s liabilities plus the shareholders’ equity. In other words, take away liabilities from assets and the remainder is what value is owned by the shareholders.
The Balance Sheet can be used to uncover the value of the company, the debt load, and cash position.
Earnings Statement
Also called the Income Statement or Profit and Loss Statement, it shows how much revenue a company received during the year from the sale of its products and services, and the expenses the company incurred due to wages, taxes, operating costs, etc… The difference between the two is the company’s profit or loss for the year. The amount left over after taxes is the net earnings.
Net earnings are basically saying how much money the company ‘really’ made over the course of the year. Some companies can have low earnings if they used much of their money for research and development, to acquire other companies, fuel aggressive growth, move into new markets, etc, which is much more favorable than if the company had low earnings because they didn’t generate many revenues, their expenses were too high, etc…
Statements of Changes in Financial Position
This shows how the company’s financial position changed from one year to the next. Also called the cash flow statement, this details how the company generated and spent its cash during the year.
This statement can be used in evaluating the liquidity and solvency of a company, and to assess the ability of that company to generate cash internally, to repay debts, to reinvest in itself, etc…
Sources of Financial Reports
Certainly you can get financials from the companies themselves. Most will gladly fax them to you, or mail you their latest quarterly and annual reports.
However, a faster way to access the information can be by Internet. For example, go to Yahoo.com and choose stock quotes. Enter the ticker symbol for the company you are interested in, and Yahoo will provide its most recent press releases, which will include past quarterly and annual reports with the financial statements. You can also check the previous reports to compare which direction the company is moving in and look for trends (i.e. increasing debt load, unpredictable earnings, decreasing revenues, erratic revenues, etc…).
There are also many other Internet resources which provide similar information, such as wsrn.com, bigcharts.com, (canada-stockwatch.com for Canadian issues), etc…
Comparison Shopping
To familiarize yourself with some of the numbers, try looking up the financials of three companies you own or are interested in.
(Balance Sheet) Which of the companies has the greatest long term debt load? Do any of the companies have greater current liabilities than current assets? Compare the current share price to the shareholder’s equity (book value): is the share price much greater or less than the book value?
(Earnings Statement) What were the revenues of the most recent year (or quarter) and does the number represent an increase or decrease from the previous period? How much money per share did the company earn (or lose) in the most recent period?
(Statement of Changes in Financial Position) Has company debt been increasing or decreasing? What was the greatest expense the company incurred according to the statement?
Decision Making
Understand that financial statements can provide investors with a partial fundamental snapshot of a company. They only represent one piece of the puzzle. Remember that, while financial statements can help investors compare several companies, comparison is limited only to the numbers provided.
In other words, you can see that one company made money while the other lost money, but you don’t know which has the better technical outlook (based on analysis of the trading chart), which is a potential takeover target, which will have the best future earnings, etc…
As well, the impact of financial statements tends to be long-term as it relates to share prices. Four quarterly reports showing increasing earnings may push the stock into an upward trend as the market begins to recognize the fundamental improvements of the underlying company, but one quarter of increasing earnings may or may not have a significant impact on shares.
Therefore, most investors use financial statements as part of a greater overall decision making process. Certainly, though, an understanding of and familiarization with the data can benefit any investor who takes the time to make educated trading decisions.
Important Points
Many growth companies don’t need nor are expected to have positive earnings. Instead, they generally accumulate debt as they focus on research and development of new technologies, aggressively move into new markets, fight for market share with competitors, etc… Other companies with minimal growth prospects on the other hand, have more importance placed on actual earnings, lowering operational costs, etc…
Be sure to understand what numbers are important and unimportant to a specific company based on their situation and the position they are in. This can be done easily by going to wsrn.com and doing an industry comparison on the company in question. Do companies in the same industry seem to have positive earnings, or is the focus on growth, research, etc… Are they a larger or smaller company than the industry average, and are they growing faster than the others?
Read the fine print to make sure the numbers you are reading have been audited, rather than being just company estimates, or unverified results. This generally is not something you need to worry about with most exchange-listed companies, but it is important practice.
Many annual statements will begin with positive news about sales or revenue increases, or other positive comments, but further reading reveals that the company actually lost more money, increased debt, or had a poor quarter or year. For most companies their financial statements are part of their promotional material and they need to make the information sound as impressive and positive as possible, even if the overall results were disappointing.
Be wary of one-time earnings or loses. For example, a company may win a huge lawsuit settlement and the influx of money gives them positive earnings for the quarter. However, how would they have done when the one-time extraordinary is ignored? Learn more at http://www.pennystockinsider.com.
By: Pleeds
The Right Personal Loan
If you are thinking of buying a new car, wanting to consolidate a debt, pay off your student loans, or renovating your home, a personal loan can be the answer to your monetary requirements. The positives can be lower interest rates than using a credit card and flexible terms.
However, there are things to look for when you’re choosing a personal loan to make sure you’re getting the best deal for your situation. These five important tips will help you make sure you’re getting the right personal loan:
1) Compare interest rates.
It’s vital to have a personal loan interest rate comparison as rates are steadily increasing nowadays. You’ll want to look for the lowest rate available in order to save money in the long run.
There are two different types of loan interest rates: fixed and variable. A fixed rate means you are locked in to paying a certain rate of interest over the duration of the loan. A variable interest rate means the rate changes with the rise and fall of inflation and the market. Both have their advantages, as you can imagine.
For example, a fixed interest rate is very attractive because your payment remains the same amount for the duration of the loan. If the economy should suffer, you will be happy to know that your charge will stay the same and not fluctuate on a monthly basis like a variable interest rate. However, if you are locked into a high interest rate and then interest rates drop, you’ll end up paying much more on your personal loan.
To decide which is better, you’ll want to take into consideration your monthly income. If you have a tight budget a fixed rate is much more attractive. In either case you’ll want to look at the total repayable amount, not just the APR for the loan.
2) Time.
When getting a personal loan it’s important to consider the length of time you want to take to repay the loan. There are many different time periods to choose from, starting at as little as a year, depending on the size of the personal loan.
The advantage of a longer time period is a lower monthly payment, which is attractive for obvious reasons. However, do you realize you’ll be paying more money in the long run? Taking longer to pay off a loan means more interest paid on the money you’ve borrowed. So think about reducing the term if you can still afford the monthly payment.
3) Secured vs. Unsecured Personal Loans.
Everyone likes security, and the bank is no exception. A secured loan means that the bank uses your home, a car, or other item of value as collateral toward the loan. The benefit is security for the bank and a lower interest rate for you. An unsecured loan is one without collateral to back up the loan in the event of default of payments. Some banks will offer better interest rates on secured loans as well as better terms, for good reason. They feel more confident loaning you money since you have something of value to offer if you default on the loan.
Before you consider a secured loan, however, think things through carefully. Though it sounds like a technicality to use your home as security to gain a personal loan, it’s a bargaining chip the bank won’t hesitate to use. Though no one enters a loan agreement planning on not paying their debt in full, life still happens, sometimes in a bad way to nice people. So if you lose your job and fall late on a few payments, you may be forced to sell your home to pay off your personal loan.
4) Nothing Is Free.
The bank doesn’t make money on just the interest they charge you on a personal loan. There can be several fees that crop up, tacking more money onto the total payment amount of a personal loan. If you can, you’ll want to find a bank with the lowest fee amounts when applying for a personal loan.
– Application Fees: There are many loan establishments that charge you when you apply for a personal loan, you must ensure that you get the best available rate. Free is always nice, but if free application means you’re paying a point or two more in your interest rate then you may want to reconsider dealing with that bank for your personal loan.
– Monthly Fees: Sometimes, when processing the loan, banks will charge a monthly service fee. These charges add up over the length of the loan so make sure you get a loan with the lowest service fee available. A personal loan with no service fee is even better!
– Early Payment Fees: Some personal loan types penalize you for paying your loan back before the assigned date. When you pay back your loan early the bank loses out on the interest. To keep from losing out when you pay a loan early a lot of loan institutions will charge a fee to discourage you from paying early and to recoup money. You’ll want to choose a loan that offers no fees on early repayment, if possible, to make early personal loan payment an option. This way you can make early payments or additional payments each month if the opportunity presents itself.
5) Be Honest and Selective.
Before applying for a personal loan, it is important to be selective about where you choose to apply, and be honest when asked why you need the money. When you apply to many different banks and credit establishments hoping someone will give you money, your credit record reflects this. A bank may see this as a red flag to not lend you money specifically because you’ve been asking a lot of places for money. So take your time, research companies that may grant your loan, and only apply at the ones that will best suit you.
Honesty is the best policy as well. If you tell the bank you need the money to refurbish your home, or buy a new car they may be able to offer you a better personal loan deal that fits your needs and budget.
By: Julie Davidson
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Financial And Cost Statements
An indispensable part of any system of accounting is programmed of periodical statements and reports to inform management of the current financial position of the business and of the progress made by, and the costs incurred for, each process, department and division. The number of statements and reports and their characters differ according to the requirements of management of each business enterprise.
The following statements and supporting cost reports are commonly prepared for the management; (1) balance sheet, (2) profit and loss statement or income statement supported by statement of cost of goods manufactured and sold. Balance sheet is a statement of assets and liabilities which reveals the financial position of the business. A balance sheet prepared for a manufacturing enterprise is similar in form and contents to the balance sheet of concerns engaged in merchandising activities, with the exception that it requires three inventory accounts i.e., raw materials, work in process and finished goods. The income statement of a manufacturing company and a merchandising company reflects the basic difference in operations of these two types of enterprises.
The manufacturing company transforms raw material into finished goods through the use of labor and factory facilities (for example, a company manufacturing furniture from wood or timber). A merchandising company, such as a retail furniture store which buys finished furniture and sells it in the same form i.e., sells the goods it buys without changing the basic form. The income statement which is prepared by a merchandising concern needs no calculations of cost of goods manufactured. But the income statements prepared by the manufacturing concern requires the calculations for the cost of goods manufactured.
The income statement or condensed statement of profit and loss shows the profit or loss of the business, while the cost of goods manufactured and sold statement reveals the cost to make and sell. The cost of goods sold section of the income statement of a manufacturing business can be divided into five distinct parts:
(1) Direct materials section; it comprises of beginning inventory, purchases and purchases returns and allowances and ending inventory.
(2) Direct labor section; it includes the cost of employees whose work can be identified directly with the product manufactured.
(3) Factory overhead; it comprises of all those costs that assist in an indirect manner in the manufacturing of the product e.g., indirect materials, indirect labor, depreciation of plant and machinery, depreciation of building, rent of factory building, repairs and insurance of factory plant and machinery etc. It is to be noted that with regard to factory overhead recording, there may be three possibilities: (A) Only actual factory overhead incurred are given. (B) Only applied factory overhead are provided. (C) Both actual and applied factory overhead are given. When both actual and applied factory overhead are known then the difference is analyzed which is known as under or over applied factory overhead which is shown in the cost of goods sold or income statement. Under or Over Applied Factory Overhead is the difference of actual factory over head and applied factory overhead. When applied factory overhead are less than actual factory overhead, the variance is known as under applied factory overhead. On the other hand when applied factory overhead are more than the actual factory overhead, the variance is called over applied factory overhead. Under applied overhead are added while over applied overhead are deducted from cost of goods sold at normal.
(4) Work in process inventories; these represent the costs in process at the beginning and costs still in process at the end of the fiscal period.
(5) Finished goods inventories; These represent the cost of finished goods inventories present at the beginning and at the end of the fiscal period.
The income statement is based upon the sales or revenue, costs and expenses of manufacturing, selling or marketing, administrating, other income and expense items. The income statement is the complementary to the balance sheet.
By: Rashid Javed
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Financial Freedom With Passive Cash Flow
As I recently attended a wealth building seminar, T. Harv Eker’s Millionaire Mind Intensive, I learned about real financial freedom and what it meant to really be financially independent. See, I always only had half of the financial freedom recipe in mind, and that having a lot of money. What do you think, is having plenty of money enough to make you financially free?
Well, I am sure you know someone who earns a ton of money, has a lot of nice toys, but is working all the time. Sure they earn a ton of money, but if they are having to spend a hundred hours a week, are they really free? No! And even those of us who work the standard 40 hours a week are not free because we still NEED that steady income.
So what’s the solution? PASSIVE INCOME! Passive income is the perfect vehicle for financial freedom because by definition it is income without working! Earning passive income is something anyone, and just about everyone, can truly benefit from.
Internet entrepreneurs are able to create true financial freedom because they utilize passive income streams. By developing multiple streams of passive income you can enjoy unlimited time and money. It may take some time and/or money to first get everything set up and rolling, but it is always worth it when the results is an income source that generates money for you, around the clock, without you having to work at all for it.
In my opinion just about everyone should be spending a little time developing passive sources of income. Passive income, which is any income that you do not have to work for, is the best kind of income you can have. It lets you enjoy plenty of money as well as time.
Developing passive income is especially a good idea if you are close to retirement or wanting to retire early. Passive income can be gradually developed until it gets large enough to support your chosen lifestyle. The more money you enjoy spending, the more passive income you will want to create.
I use several internet income streams to generate a healthy passive income. My primary income comes from my two websites, each of which is monetized to include several income streams.
Websites are great because they take time and effort to get them built and add in plenty of content, but once they are live and generating traffic they are highly automated. And in my opinion it can be a lot of fun, as long as you choose to market to a niche that you are interested or passionate about.
But there are plenty of other passive income sources. You can host a blog, create a network marketing downline, publish an ebook or digital product, or a number of other inter business ideas. In fact, just about any business or income source can be automated so that it works without you.
I for instance earn money from a number of information websites that I spent time creating. Each website has a lot of content, generates thousands of daily visitors from the search engines, which are then turn into money through a number of monetization models. For instance, I sell ebooks, promote my mlm businesses, do additional affiliate marketing, host Google ads, and there are several other ways that my websites make money 24 hours a day, every day of the year. I enjoy building passive income business online, and so even though I no longer need to work, I continue building my websites and my passive internet income.
The real key to financial freedom is deciding what income you need to support whatever lifestyle you want to experience. Then work gradually, developing multiple sources of passive income, until your overall cash flow exceeds your needs. This is financial freedom in its purest form, and the opportunity to become a passive income earning internet entrepreneur is available to anyone, anywhere in the world.
For more information on successfully starting your own home business, marketing and growing your business online, and mastering the mental attitudes that promote wealth and success visit The Wealthy Internet Entrepreneur, Developing Passive Income as well as Financial Freedom Basics.
By: A Dom
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