Academic Master

English

Reflection And Critical Thinking Analysis

Reflection

I would like to do business and invest in the future; therefore, I have taken a keen interest in business courses. The outline of the financial accounting statement has turned out to be one of the best lessons about the 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 in the Book Business Ethics.

First, I have learned that to introduce a successful company, I have to understand the business. Understanding the business involves analysis of 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 a return on equity. The objective of every business is to generate revenues.

Consequently, I learned that a company’s strategy affects the financial aspect of the organization. Therefore, comprehending a firm’s pricing, control cost, and product differentiation strategies helps to improve my financial skills. Thus, knowing the business policy helps me understand the firm’s operating decision, which in turn assists me in understanding the company’s transactions and financial statements.

As a young aspiring entrepreneur, the outline helped me understand how business analysts use financial statements to understand company objectives. I learned that financial statements are only used by management and external decision-makers. 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 ratio and percentage analysis are the most effective ways to know where a business stands regarding finances in the market. Thus, the outline helped me understand the business strategy that makes a business successful.

Critical Analysis

According to the chapter, to understand business, one must undertake a market analysis. Therefore, you have to understand the market environment of the business. To comprehend this, you have to conduct a SWOT analysis to come up with an investment decision. Hence, if the company is forecasted to generate returns, invest in it. The outline indicates that the firm’s strategy determines the financial aspects of the firm. Pricing, product differentiation, and cost control aspects 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. The financial statement helps the administration understand the firm’s history and current situation and assists in forecasting the future. Also, the financial statement helps the company to compare itself with its competitors. Therefore, any firm financial accounts are used for comparison purposes only. Hence, to understand the organization’s financial information, we conduct ratios analysis.

Financial ratios help determine a company’s financial position. There are different financial ratios. The main purpose of the business is to make a profit. 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 outline, 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 Ethics128(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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