Week 2 DQ 1 Importance Of Financial Information For A Small Business

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timer Asked: Feb 25th, 2019
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Question Description

Discussion 1: Relevant Financial Information for a Small Business

Relevant Financial Information

Please respond to the following discussion question. Your response should fully address all elements of the question and be a minimum of 200 to 300 words long. The response and two replies to other posts in this string are due by Saturday night, 11:59 Phoenix server time. See the Instructor Policies in the Resource Folder for a complete description of class participation requirements.

Assume that you have an existing small business and you want to improve its financial performance.

Relevant financial information is defined as “the predicted future costs and revenues that will differ among the alternatives”. What financial information do you believe is most relevant to analyze and understand? Why?



Respond to Jacqualine post in 100 word count

Hello Everyone,

When you are analyzing any business situation, trying to figure out the relevant items and information is always confusing. There is still more information and data than you can use and much of it doesn't matter to the future decision. The concerns are cash flow, profitability and the cost structure of each alternative. Whatever details are relevant to these areas is accounting information a manager is going to need. We start early talking about relevant information because as we study cost and budgeting topics in the next few weeks, the first step is always to decide what is the most relevant information to solve your problem or analyze your situation.

It is essential to review your business financial performance so that you can improve your business performance. It is knowing which direction you want your business to update your business plan with a new strategy in mind and go forward with the developments. It is necessary to assess your core activities, business efficiency, financial position, competitor analysis. Defining your goals will have to include strategic analysis and review. You must know your markets, direction, and marketing advantages. When you understand what your overall concept of the for the organization is trying to achieve internally and externally. It will not only ensure that everyone is on the same page.

COMMENT ON POST IN 100 WORD COUNT-

by RACHEL

Assume that you have an existing small business and you want to improve its financial performance.

Relevant financial information is defined as “the predicted future costs and revenues that will differ among the alternatives”. What financial information do you believe is most relevant to analyze and understand? Why?

Chapter 4 discussed the issue with cost and revenue with respect to Groupons. However, much of the lulling is defined by SEC. Understanding, the aspect of where the revenue is generated and how the organization records the information is another issue. For example, Groupon recorded the full charge for the Groupons if they charged $40 then they would record $40 although the organization for the establishment receives $20. In this case SEC ruling has Groupon record $20 rather than $40. In this particular case it caused Groupon to reduce revenue by $312.9 million. If revenue is reduced by $312.9 million where did the costs become an issue. This framing of revenue affects the organization. I believe how revenue and when revenue could be reported and recorded. Cost is also important as it affects the revenue in the pursue of generating revenue.

If I could establish a small organization of about 500 employees or less, it would an organization that would sell a product I developed and would call it, "Love my Toes." My concern would be the cost associated with the product, equipment, furniture, building, land, insurance as well as other cost associated. Then considering the revenue generated from sales and share capital. Understanding, the record keeping of all transactions is critical in maintaining a solid financial statement. The balance sheet is critical in determining the aspect of the organization. This is a very strategic aspect in determining the financial solvency of the organization.


Tutor Answer

phd_writer32
School: Rice University

Kindly check out your work.

Running head: IMPORTANCE OF FINANCIAL INFORTION

Importance of Financial Information
Institutional Affiliation
Date

1

IMPORTANCE OF FINANCIAL INFORMATION

2

Small business needs to establish its financial information to monitor its progress. It
enables a business owner to know whether it is making a profit or a loss. A small business will
need to understand several financial statements. The first financial that is crucial for every small
business is the cash flow. They enable a business holder to get the real amount of money that he
has generated and spend within a particular period (López et al., 2012). Cash flow is essen...

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