Accounting for Managers Essay Example | Topics and Well Written Essays - 3500 words

Accounting for Managers - Essay Examplest detailed cabbage and loss account is given in the annual report, but UK listed companies are required to make annual and half year results announcements as well. The wide-cut year results announcement is shorter and covers the same period as the annual report, but it is released earlier.Many companies make every quarter announcements, as companies in the US and many other countries are required to. Unsurprisingly, UK listed companies that also have a US listing are very likely to report quarterly.In a simple character reference the profit or loss equals the increase or decrease in the companys assets as shown on the relaxation sheet. This is rarely exactly true and the statement of total recognised gains and losses reconciles the P &L to the changes in equity shown on the balance sheetIn accordance with the accrual principle, costs and revenues are matched so that, for example, sales and purchases made on credit during a year, but perhaps not yet remunerative for, will be included in the P&L for the year.Most of the detail in the profit and loss account comes from the need to provide detail of costs and, to a lesser extent, revenues. This leads to the general cause of a P&L that looks something like thisAs poop be seen, the P&L contains some(prenominal) profit number. Each of these gives us different, and useful, information. In addition, the P&L (perhaps together with other information) usually gives us enough information to calculate several other profit numbers such as EBITDA and EBITAThese can give investors a better idea of the underlying business (the justification for doing it). For example, if the company has decided to carry on a particular operation and the price has been agreed, shareholders do not really need to worry in like manner much about that operations performance.As well as the valuation ratios, the P&L provides the numbers for measures of the performance and efficiency of the business, su ch as margins, ROCE, and some measures of financial stability such as sideline