About 'manual accounting systems'|...project, and as such was no threat to the criminals operating the system...*shrugs.. See http://www.deathofdurban.blogspot.com/ Thursday 23rd February at...
First and foremost, I'd like to welcome you all to the Strident Marks team. As you may already know this is a great time to join our team, as we have recently become a public company. It is also a time of new pressures and stress as the company will be under the scrutinizing eyes of bankers and investors. New members of the finance department should pay close attention to several areas of our business that will be significantly important to the success of the company at this time (CTU, 2007). Today we will be examining the Strident Marks accounting system and finance functions to better assimilate your eyes towards these areas of significance. First, let's discuss the components of a financial system. It is important to realize that the previous financial systems you may have used are no longer valid here at Strident Marks since these systems are customizable to the business. A financial system is used to collect, process, maintain, transmit, and report data about financial events (Enterprise Solutions, 2007). The individual components of a financial system can help to assess potential business ventures, capital budgeting projects and initiatives. The core to financial system is made up of two components: the finance and accounting. Gitman (2006) has described finance as the art and science of managing money and it is all too true: this business can be a masterful juggling act at times (Gitman, 2006). When we speak of the finance department in Strident Marks, we are referring to both managerial finance and financial services such as the advice or product we supply to our customers, other businesses, and the government. On the other hand, managerial finance is more internal and involves analyzing performance, previous cash flow statements, and projecting goals to help management make better business decisions for long and short term. For example, our finance department evaluated previous performance and forecasted a positive influence for Strident Marks progression as a public company. It is much easier to evaluate strengths and weaknesses through the use of ratios such as the cross-section analysis or time-series analysis. The finance department is responsible for delivering ratios used to evaluate the activity of the company, debt ratio, market ratio, and profitability (Gitman, 2006). Business decisions are not made over night and it is imperative to have precise figures for accurate projections. Your training manual will describe these calculations in more detail. The accounting department is invested in the here and now. The accounting department can also be broken down in two segments: managerial accounting which reports internally and financial accounting which is involved in reporting internally and externally. For all intensive purposes, we will focus on the financial accounting aspect which uses historical data to relay information about the company's activities to various sources. There are four reports the accounting department uses: balance sheet, income statement, statement of owner's equity (or retained earnings), and statement of cash flows (Gitman, 2006). Valuation is described by Lawrence Gitman (2007) as a method used to establish the worth of an asset by joining the financial risks and estimated profits associated with that asset. The process of valuation is relatively simple and involves three basic inputs: (1) the cash flow that is anticipated over the course of ownership of the item, (2) the timing of these cash flows, and (3) the level of risk involved with the cash flow. Value is not indicative of an annual positive cash flow. Items can still gain value by having a one-time cash flow or even an alternating cash flow. Whatever the case may be, it is important to understand the schedule of these flows. Valuation decreases with the risk associated with the cash flows. The risk should be appropriate to the cash flow for the valuation to be valid (Gitman, 2007). As new hires you will be working in your respective areas as part of the Finance and Accounting Department teams. Your role in valuing new business opportunities or projects is essential and crucial towards the decision making process. This team has the ability to maintain investments and influence financing decisions by providing the information necessary determine the tax liabilities, understand sales figures and trends, and predict cash flows. Making a financial decision on the behalf of the company without consulting the Financial Department and the expertise they can provide is a stab in the dark. Over past years, the actions of businesses have come to be looked upon with more of a skeptical eye as consumers and other users became increasingly more aware of the ethical activity behind the actions of these businesses. As a result, ethics are a large part of our corporate values here at Strident Marks. Consequently, members of the finance department must operate under these ethical guidelines. As a company we remain respectful of the consumer as they are the ones who sustain our business through their purchases. With comment to individual employees, we must remain respectful to those around us as well. Employees must be aware of the impact their actions may have on other employees and the company. We are dedicated to building a team and family here at Strident Marks and it is important that everyone be treated fairly and with regard to ethical matters. To ensure the highest level of ethical quality is adhered to we have instated several types of auditing standards that will encourage employees to engage in activities which will promote this type of performance (Gitman, 2006). Once again, welcome to the team and welcome to Strident Marks. I hope this introduction inspires you to spread your roots into the company and become an integral part of our team-building process. Our overall goal is to maximize sales and profits through the promotion of a quality product. Your contributions to the finance and accounting department are immeasurable and the knowledge you gain here will be irreplaceable. References: CTU Online. (Ed.). (ca. 2007). Phase 1 Course Material [multimedia presentation]. Colorado Springs, CO: CTU Online. Retrieved October 12, 2007, from CTU Online, Virtual Campus, FIN310 Financial Management Principles: 0704A-05. Website: https://campus.ctuonline.edu/MainFrame.aspx?ContentFrame=/Classroom/course.aspx?Class=23719&tid=39 Enterprise Solutions Competency Center. (2007) ERP/SOA Resource Center. Retrieved October 11, 2007, from http://www.army.mil/escc/erp/aetg_terms.htm Gitman, L. (2006) Principles of Managerial Finance. (11th ed.) San Diego, CA: Pearson/Addison Wesley. |
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