Users and Uses of Financial Information

In every financial accounting textbook, the authors explain in detail about "Users and Uses of Financial Accounting." Information such as cash flow statements, income statements, and balance sheets are important documents that are kept to ensure that the company is recording everything correctly. The users of this accounting information are divided into two categories, internal and external users.

The internal users of accounting information are the managers who organize, operate and plan daily business routine. They are directly affiliated with the company and use administrative accounting, which includes in-depth reports used to determine financial strengths and weaknesses. For example, internal users would include management, finance, marketing, and human resources. An example of a human resource manager would be that he or she has to ensure the rights of their employees by using wage information along with other data. Important questions arise with internal users. A question for a marketing manager would include, "What price for an Apple I Pad will maximize the company's net income?"

External users are groups of individuals that are outside organizations, and they use accounting to make financial decisions. An example of an external user would include a creditor, who uses accounting to evaluate the risks of granting credit. Taxing authorities, investors, and customers are also external users. External users would receive limited financial information from a company such as financial statements. These statements are the backbone of financial accounting and they give the external users enough information to inform them of the company's economic position. Assets, liabilities, revenues, and expenses are of great importance to users of accounting information. For business purposes, it is customary to arrange this information in the format of four different financial statements; Balance sheet, income statement, retained earnings statement, and statement of cash flows.

The purpose of the income statement is to report the success or failure of the company's operations for a period of time. The income statement lists the company's revenues followed by it expenses. A key point to recall when preparing an income statement is that amounts received from issuing stock are not revenues, and amounts paid out as dividends are not expenses. Therefore they are not reported on the income statement. Retained earnings statement shows the amounts and causes of changes in retained earnings during the period. The time period is equivalent to the time covered on the income statement. Financial statement users can evaluate dividend payment practices by monitoring the retained earnings statement. Some investors seek companies that have a history of paying high dividends, while others seek companies that reinvest earnings to increase the company's growth.

The balance sheet is based on this equation: Assets = Liabilities + Stockholders Equity. This equation is referred to as the basis accounting equation. The balance sheet reports the company's assets, liabilities and owners equity. It is a financial window to the company at a specific point in time. Claims are divided into two categories: claims of creditors, which are called liabilities and claims of owners, which are called stockholders equity. On the balance sheet it lists the company's financial position as of a specific date in this order: assets first, then liabilities and stockholder's equity. A note to self about stockholders equity is that it is composed of common stock and retained earnings. Finally there is the statement on cash flows. The purpose of the statement of cash flows is to provide financial information about the cash receipts and cash payments of a business for a specific period of time. Users are interested in the statement of cash flows because they want to get a better understanding of what is happening to a company's most important resource. The statements of cash flows answer these following questions: 1) Where did cash come from during the period? 2) How was the cash used during the period? 3) What was the change in the cash balance during the period? The statement of cash flows also organizes and reports the cash generated used in the following activities: financing, investing, and operating. All businesses are involved with these three types of activities.

Financing activities is described as taking money to make money. The two sources of outside funds for corporations are borrowing money and selling shares of stock in exchange for cash. Investing activities involve the purchase of the resources company's need in order to operate such as sale of long-term investments, property, plant, and equipment. Finally there is operating activities. Once a business has the assets it needs to get started it can begin its operations. Operating activities convert the items reported on the income statement to cash.

In conclusion, the users of financial statements are people who use financial documents for a large variety of business purposes and their ability to make decisions using these statements helps them to succeed in the business world. Students have a chance to succeed in business if they have the knowledge of professionals who use financial statement analysis techniques and tools used on a day-to-day basis.

How the Internet Affects Traditional Media

Traditional Publishing, REST IN PEACE

This is the headline that greets you when you land on a web page identified as a memorial to commemorate the decline of Traditional Media. A photograph of a man who seems to be in distress and who's possibly just lost his job companies this headline. If this does not paint a bleak picture, go on to read the 548 headlines that all sing to the same tune as the following:

  • Bad Times: NYT Says Revenue Fell 13.9% Last Month – Forbes.com
  • Men's monthly magazine Arena to cease printing after 22 years – Guardian.co.uk
  • Cosmopolitan UK publisher to cut 100 jobs – Guardian.co.uk

There's even a website entitled Newspaper Death Watch that chronicles all the publishing and newspaper houses that close down. All rather morbid would not you say?

The Deadly Spell

Let's take a quick look at Traditional Media and how the Internet cast it's deadly spell.

Back in the old days, we're talking 500 years ago; Gutenberg revolutionized the printing industry by inventing the printing press. This meant bibles could be produced at a fraction the time it used to. This also mean more copies in a shorter time and the Word of God got further reach in a shorter time. Newspaper houses and Magazine publishers still use a printing press today (well thank you captain obvious) .

Much later, shortly after the advent of electricity, the world was blessed with another few media breakthroughs, rarely radio then a few years later, television. Marketers and Advertising agencies had it all figured out as they devised Integrated Marketing Campaigns with astronomical budgets. Ah, the good old days. Well, much to the dismay of many of these agencies, this media landscape started to change.

Behold! Enter The WWW

At first a website was seen as a cute way to put your company brochure online and on top of that the disastrous dot bomb era created skepticism that labeled the Internet as a bad media and business channel.

Fortunately, since then the Internet has matured. Now, in countries where broadband has achieved high levels of household penetration, the web has become the consumer medium of choice.

Why? Because people can do research, shop online, watch videos and connect with friends all in the comfort of their own homes. People can choose what media they want to consume, where and when they choose too, especially with mobile connectivity. Marketers can no longer dictate what advertising messages people get subjected too.

Social Media, The New Black

Then there is the phenomenon of Social Media. It changed the media landscape forever. Social Media websites have allowed consumers to connect with friends, family, colleges and peers in ways that were never imaginable a few decades ago.

Technology has empowered the consumer to become the prosumer. Prosumers are consumers who produce content like videos, photos and blogs that can be instantly distributed and shared among millions of people via social media platforms. This is also known as user-generated content or UCG.

Here is an interesting bit of trivia about the reach of Traditional Media vs. The Internet and Social Media.

Years it took to reach a market audience of 50 Million:

  • Radio – 38 Years
  • TV – 13 Years
  • The Internet – 4 Years
  • The iPod – 3 Years
  • Facebook – 2 Years

So How Does The Internet Affect Traditional Media?

The Internet has reduced the need for traditional media because it enabled consumers to join social communities within their neighbors, across their countries and internationally. It has empowered them to converse at their leisure, 24/7, with friends.

Considering all that's been said, the demise of Traditional Media can seriously be attributed to the following factors:

  1. Decline in readership: The distribution of free news and information on the web has led to the decline in readership for traditional publications.
  2. Decline in revenues: The decline in readership advertisers advertisers will spend their money elsewhere and this leads to a decline in ad revenue.
  3. Real-time updates: Traditional Media can not compete with immediately updated user-generated content that's immediately available for the world to see.
  4. The rise of UGC websites: People have the freedom of unlimited real time commentary on content while Traditional Media is static and is a one-way communication tool.
  5. Online Audio / Video channels: People can choose what they want to watch and listen, when they want to and where without advertising interrupting their experience.

Simply put. The Internet has revolutionized the way things get done today. It has revolutionized the way we do business, the way we communicate and has broken down the walls of Traditional Media.

A recent example is the decision by Unilever UK to fire Lowe , their Ad agency of 15 years, in favor of crowdsourcing – which means it has thrown the brand creative pitch open to agencies and basically any person who can think of an idea, worldwide. This is done on the Internet of course.

Traditional Media will still be around for a while, but the Internet is getting more and more integrated into our daily lives.

Think about this. You could do without the Mail & Guardian or the MensHealth Mag for quite some time, sometimes live quite happily without it? But you just dare cut that ADSL connection …

A Guide to Help You Pick Your Next Piece of Furniture

Buying furniture does not have to be a stressful or painful activity. In fact, it can actually be a bit fun when you know how to distinguish the quality pieces from those destined for the dumpster. The following guide will hopefully demystify the inner workings and construction of furniture so you can focus on picking out the perfect color, print, and texture for your home.

Upholstered Furniture

Your furniture sets the mood, tone, and overall feel of your home just as your wardrobe conveys these same exercises about you. Upholstered furniture is perhaps the most telling sign of these characteristics as the use of color, design, and texture come into play more here than with any other type of furniture. Pieces that generally fall into the 'upholstered' category include chairs, sofas, love seats, sectionals, and sofa beds. This guide is designed to make your decision less daunting by eliminating some technical terms and giving you some insight into what lies benefit the cloths and cushions.

Woven Fabric Covers

Woven fabric means simply that the fabric is woven by a machine that interlaces two yarns running at right angles to each other. The most widely used group of decorative upholsteries sold in the United States consist of woven fabrics. These woven fabrics can be natural, such as linen and cotton, or man-made fibers like polyester and olefin. In most cases, fabrics are blends of various fibers like the popular cotton-polyester blend. The most popular types of weaves are as follows:

O Jacquard weaves are fabrics with differently colored yarns or fibers woven into highly decorative designs. These weaves are most often found in traditional furniture styles.

O Pile fabrics have loops or cut fibers standing up densely from the surface to form a three-dimensional texture. Depending on color and design, pile fabrics can be suitable for traditional or contemporary furniture.

O Textured fabrics are woven from yarns that have been processed to give them more bulk, crimp, stretch, or otherwise altered. Chenille is an example of a very popular textured weave. Textured fabrics are often woven to resembble antique, homespun cloth.

O Plain-woven fabrics consist of one color with their character resulting from the type of yarn or fiber used. Depending on the texture, plain weaves can be used on formal or informal furniture and with a variety of styles.

O Printed fabrics are first woven and then printed with a decorative design. Chintz and polished cotton are examples of fabrics that are often used for prints, although textured fabrics with blends of nylon, rayon, cotton, and polyester fibers are also often printed.

Non-Woven Fabric Covers

Non-woven fabrics are produced by the bonding and or interlocking of fibers. These fabrics can be made by mechanical, chemical, thermal, or solvent means, or with an adhesive, or any combination of these. Examples of non-woven fabrics include:

O Vinyl , which may or may not be laminated to a fabric backing. Vinyls are preferred on furniture that is subject to hard usage. Also called Naugahyde®, vinyl is often thought of as a substitute for leather, and can be printed in a variety of patterns.

O Flocked fabrics are made by gluing pieces of cut fibers onto a flat woven cloth base. These fibers form a three-dimensional surface much like pile. Flocked velvet is an example of this kind of fabric.

O Knitted fabrics are made by interlooping one or more sets of yarns. This is a reliably inexpensive way of manufacturing fabric.

O Suede-like fabrics , such as Ultrasuede® are often used in decorative upholstered furniture covers to give the look and feel of genuine suede, without using animal hides and usually at less cost.

Inner Construction

The construction and inner workings of an upholstered piece of furniture can be as mysterious as an episode of Murder, She Wrote (ask your Grandma). But hidden under the decorative fabric or cover lies the secret to the piece's overall function, comfort, and longevity. No need to call Angela Lansbury in order to solve this case, read on as we forget what makes your chair or sofa tick.

The frame is the single most important component in determining whether or not a piece of furniture is going to stand the test of time. You probably figured wood as being the most commonly used frame material, and this, of course, is true. But any old hunk of tree will not due if you plan on passing this wonderful chair, sofa, love seat, or whatever on to your children or grandchildren (they'll probably just put it in storage or sell it at a yard sale anyway ). Hardwoods, such as oak, alder, ash, beech and birch are what you're looking for in a frame. These hardwoods have a tighter grain and allow for screws, pegs, and nails to be set securely. Also, the best-made frames use wood that has been kiln-dried . This process consist of heating the wood in an industrial oven to remove excess sap and moisture. The process also makes the wood resistant to absorbing any outside moisture. If you're wondering what the problem is with moisture, I'll tell you. If you already know the answer to this, then skip to the next paragraph Mr. Egypt Smarty-Pants. Moisture can cause warping and swelling, can lead to loose joints and fastenings, and in severe cases can cause mildew or rotting, other than that, it's great.

The quality of the frame depends not only on the materials used, but how they're joined and held together. To create a strong, rigid frame, a variety of woods and laminates can be used in joints and for blocking and doweling.

O Joints are places where one piece of the frame meets another. These points of intersection need to be secured and reinforced with blocks and dowels to allow the frame to hold up over time.

O Blocking reiter to placing additional 'blocks' of wood behind or diagonal to joints and corners to help relieve the stress these areas encounter. Blocks also provide lateral support and create a larger area for screws and fasteners to set wood elements securely.

O Doweling is the process of drilling into both pieces of the joint and then placing a pin, or dowel into the hole, so further connecting the two pieces and adding extra support.

A quality chair or sofa will employ some type of inner spring system, usually in the back as well as the seat area. These systems add comfort, as you might expect, but they also work to take some of the stress off the joints of the frame. Here are some of the spring systems being used:

O The coil or cone spring system uses eight-way, hand-tied double cone springs to provide extra comfort and support. This technique involves fastening the cone springs tightly to the base and expertly tying their tops together with a strong cord. This is the only system that allows for side-to-side movement in addition to up and down movement. Hand-crafted quality comes at a price, though, and while this is widely considered the best spring system, it is also the most expensive.

O The sinuous wire spring is made in a continuous zigzag or "S" shape. These wires run parallel to each other and are quickly directly to the frame and to each other. Similar to this system is the formed wire spring, where the continuous wire is formed into rectangular bends and angles instead of the zigzag pattern.

O The grid suspension system is composed of a wire grid, sometimes covered with paper or plastic-coated wire, which has one side fastened directly to the frame. The other side is connected to the frame by helical springs.

O Some manufacturers use elastic webbing instead of wire springs. The strips of elastic usually intersect and weave together and are fastened directly to the frame. It is best to avoid furniture that uses this technique.

Arm yourself with this knowledge and make a more informed choice the next time you purchase furniture.

What are the Key Features of a Database Management System?

Every day the demand for a good database management system is increasing. The fact is that information is growing and expanding faster than ever. And this makes sense — all old records still need to be stored and saved, while new records are being added and updated daily. Even companies that five years ago had no use for a database management system are now struggling to even get a handle on the simplest information, as it relates to their customers.

All database management systems have one goal in mind — to take the information you enter into it, and store it effectively. Then, when you need to get that information back, you can access it quickly, without any problem or headaches.

Additionally, you want the feature of being able to access all of your information in one singular central location. What good is all your information going to be if it is scattered about on various disparate systems? If the accounting is on one computer, your inventory on another computer, and your sales information on a third computer, you will not be able to make the necessary snap decisions that are required in the business world.

Another feature many database management systems have is to give you the ability to make complex statistical and data analysis, so you can make the most accurate decision as quickly as possible, since time is money in business.

In addition to those features, another good feature of a database management system is its ability to stay secure. This is especially true, as it relates to hospitals. Most hospitals have very sensitive information about their patients, which could put them in legal problems if that information was accessed.

You want to make sure that you have proper security on your database management system, otherwise your information may be compromised. Nobody wants their competitors to get a get hold of their client list, and hospitals and psychiatrists, among others, have a duty to keep their information about their clients confidential.

Security can be enforced on each individual application that exists within a database management system, or it can be set up on the system itself. This will depend upon how many users are accessing the system, and how many applications are running on that system.

In conclusion, I’ve given you some of the basic features that make up a good database management system.