What is indirect method, Financial Management

Assignment Help:

What is Indirect method

Indirect method is what you would probably be familiar with. It requires a lot less information to produce it and hence can be argued to be easier method.

With indirect method, profit before taxation (or profit before interest and tax) is taken from income statement and adjusted for non-cash items (that is depreciation, provisions). It's also adjusted for loss or profit on disposal of assets. Other items which will be classified under financing or investing are also adjusted for. Lastly adjustments are made for changes during the period in inventories, trade and other receivables and payables. This requires looking at current and prior year's statement of financial position.

2069_financial management.png


Related Discussions:- What is indirect method

Secondary market organise exchanges-over the counter markets, How can secon...

How can secondary market organised the exchanges and over the counter markets? Exchanges and over-the-counter (OTC) markets: Secondary markets can be organised by exchanges

Explain about the liquidity premium theory of interest rates, Explain about...

Explain about the liquidity premium theory of the term structure of interest rates. Liquidity premium theory: Liquidity premium theory asserts which, into a world of unce

Financial management, DEFINITION OF FINANCIAL MANAGEMENT The term finan...

DEFINITION OF FINANCIAL MANAGEMENT The term financial management has been described by management experts in several ways reflecting the duties and responsibilities of a financ

What are the characteristics of an efficient market?, What are the characte...

What are the characteristics of an efficient market? The term market efficiency denotes to the ease, speed, and cost of trading securities. In an efficient market the securitie

Mortgages, A mortgage may be defined as a pledge of property ...

A mortgage may be defined as a pledge of property to secure a debt payment; in this context, we will use the term property to mean real estate. If the

Definition of financial management, DEFINITION OF FINANCIAL MANAGEMENT ...

DEFINITION OF FINANCIAL MANAGEMENT Financial Management is a stream concerned with the generation and allotment of scarce resources (generally funds) to the most proficient use

Evaluae new options within current organization, Q. Evaluae new options wit...

Q. Evaluae new options within current organization? Evaluating having completed self marketing successfully to prospective employers it is time to analyze new options within cu

Currency, You have the following limited information upon which to base you...

You have the following limited information upon which to base your decision as to which is the better of two alternative funding arrangements: ? Alternative 1 is to arrange funding

Discuss about the materiality, Discuss about the Materiality An item ca...

Discuss about the Materiality An item can be considered material if its omission would reasonably influence the decisions of an addressee of report, a misstatement is material

Advantages and disadvantages of investing in gilts, Advantages and Disadvan...

Advantages and Disadvantages of Investing in Gilts Advantages As the security is issued by the GOI, it has a minimal default risk. Investors have the opportunity to inves

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd