Reflection
Creating the right culture and having honest employees can lead to a successful business. Honesty and the right culture in an organization create a good working environment for both management and employees; therefore, these lead to organizational success. To measure organization success, we use financial statements. Hence, the outline of the financial accounting statement has turned out to be one of the best lessons about business I have learned. Outlines have helped me understand the basics of a successful business. Thus, this reflection indicates the lessons that I have learned from the financial accounting overview notes.
First, I have learned that to introduce a successful company, I must create the right culture for the organization. Understanding the business involves analyzing the industry factors, individual company factors, and wide economic factors. Therefore, by understanding these concepts, I will be able to evaluate whether the business will be able to generate revenue. The objective of every business is to generate revenues and to measures whether business I doing ok the analysis of financial records is conducted. Therefore, having the right culture in an organization helps in creating a conducive working environment.
Consequently, I learned that a company’s strategies play an important role in organizational success. Therefore, it’s important to comprehend the firm’s pricing, control cost, and product differentiation strategies. Thus, knowing the business policies and strategies helps in understanding the firm’s operating decisions; this essentially assists in understanding the company’s transactions and financial statements.
The outline helped me understand how business analysts use financial statements to understand company objectives and performance. I learned that financial statements are only used by the management and external decision-makers to assess the company’s performance. Therefore, the financial statements help in understanding the company’s past, present, and future performance. Also, to conduct successful financial analyses, I have to compare the company’s trend with the market trend. Another important aspect of the financial statement I learned is that financial ratios and percentage analysis are very crucial in measuring business success. Thus, the outline helped me understand the business strategy that makes a business successful.
Critical Analysis
Organizational culture and employees’ honesty are important aspects of the organization. However, to create a successful business, one must conduct a market analysis to understand organizational opportunities, threats, weaknesses, and strengths. Therefore, you have to understand the market environment of the business to ensure that investment generates returns. Hence, if the company is forecasted to generate returns, then consider investing in it. Another important aspect of the study is measuring organization success. The study indicates that a firm’s strategy determines the financial aspects of the firm. Pricing, product differentiation, and cost control strategies make the financial evaluation more meaningful. Thus, financial statements are analyzed in an organization and used by the firm management to formulate the entity’s decision. Also, financial statements help the administration understand the firm’s history and current situation and assist in forecasting the future. Also, the financial statement helps the company compare its performance with that of its competitors. Therefore, any firm financial accounts are used for comparison purposes only. Hence, to measure the organization’s performance, we conduct a financial ratio analysis.
Financial ratios help determine the company’s financial position and measure the company’s performance. To understand the company’s return position, we conducted a return on equity ratio (TEoRo, 2013). This ratio measures the percentage of business profit compared to the investments. Thus, there are different types of financial ratios that help determine a business’s position in the market.
From the study, it is clear that financial ratios are used by the firm’s management and investors. The management uses financial ratios to understand the business performance and understand where the business the business can improve to meet its objectives (TEoRo, 213). For instance, if the firm has low profits, the management can figure out new ways to improve the profits. Consequently, the investors use the financial ratios to determine whether the business is a viable and good investment. Thus, by comparing financial ratios between different firms, the investor can understand a good opportunity to invest.
References
Howard, L. W., Tang, T. L. P., & Austin, M. J. (2015). Teaching critical thinking skills: Ability, motivation, intervention, and the Pygmalion effect. Journal of Business Ethics, 128(1), 133-147.
Sabourin, C. (2015). Review and reflection: Essay on the Kantian discourse.
TEoRo, E. A. (2013). Business and the Beatific Vision. Theology in the Present Age: Essays in Honor of John D. Castelein, 260.
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