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How Income Statement Can Be Applied in My Everyday Life - Essay Example
Finance & Accounting
Pages 3 (753 words)
Application of Financial Statement Institution’s name: Date: How Income Statement Can Be Applied In My Everyday Life Financial statements are crucial documents for any organization or an individual operating a business…
For instance, they are used by managers to plan for the future and also setting goals for the company upcoming periods. Being a student of accounting and finance, I have utilized the knowledge gained in class to open up an electronic shop. Through the use of the income statement, I have been able to determine my business expenses and sales for a given period. Being the manager of the business, I always ensure that my assistant prepares the income statement every month and also at the end of the fiscal year. Through this operation, I have been able to identify if I am incurring losses or making profits. Incase losses are recorded; I often identify the loopholes in my business and fix them immediately through environment scanning. For purposes of bridging the gap between the profits and losses, I always ensure that I am updated with the new models in the market so as to maintain loyalty with my customers and make more profits. The good thing about the income statements is that they contain expense and revenue categories that are specific regardless of the company or business nature (Walther, 2010). How a Business Manager May Benefit From the Understanding of the Income Statement The better understanding of income statements helps a company in fulfilling and managing the business financial picture. This is because, the income statement is the direct outcome of the information recorded in the ledgers and journals. ...
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