Showing papers on "Accounting period published in 1991"

Lifetime Earnings and Inequality

Abstract: It is argued that for many purposes the measurement of inequality should be based on income measured over a longer period than a single year. However, samples of individual earnings over a long period are extremely rare, and there are no data on complete lifetime earnings. This survey examines the wide variety of attempts that have been made to estimate inequality using a longer accounting period Emphasis is placed on the problems of extending the accounting period, rather than the properties of particular statistical measures of inequality.

Analysis and planning

Abstract: This chapter provides an overview of analysis and planning. All the financial data used so far has been historical. If a loss was incurred or poor financial ratios accumulated, then it would be too late to alter them. They occurred in the past. To be of any use at all, the analysis stage must be followed by the planning stage. The route should follow automatically. The plans for next accounting period should be formulated after the faults of previous years have been isolated and eliminated from the plans. Without adequate planning a business would stumble from one period to the next, existing on hope. Adequate planning means directing the business and dictating its course rather than letting the business dictate the direction. Profit or loss, liquidity or cash problems should not occur without warning. A sound financial structure does not occur by accident. The ratios can be used to guide company finance, sloppy financial controls can be tightened up, and a strong business plan projected into the future. The financial health and, therefore, company prosperity should be the concern of all employees. Without a strong financial base, any business will close down. A manager's role should never be isolated into one area; management is an integrated responsibility, with all the aspects of a business being integrated.

1 – Financial data

Abstract: Publisher Summary This chapter presents the concepts of financial data and recording procedures. It discusses the profit statement, known as the trading and profit and loss account, and the balance sheet. The profit statement is produced from the annual income and expenditure for the year, while the balance sheet represents the assets and liabilities of the business as at a particular accounting date. The word business has wide scope. It covers a variety of organizations that exists to trade in any area of the commercial environment. A business can be a small independent trader selling from a market stall, a writer working from home or a large international conglomerate with an annual turnover of billions of pounds. Taxation is the amount because of the government on the year's profit. The dividend is the shareholders' reward for investing in the company. The dividend for the preference shares is fixed. An interim dividend will already have been paid during the accounting period, so that the balance is the final portion of the dividend. The rate of ordinary dividend is at the discretion of the directors.

The profit and loss account

Abstract: We have already seen that we can measure profit by measuring wealth at two points in time. We have also shown that the way in which wealth is measured in accounting terms can be roughly equated with balance sheets, and we have looked at some of the issues arising from the alternative choices in respect of assigning monetary values to wealth measurement.