Writing a research paper on a financial statement would be basing it on the perspective of the trader who needs his bills to be paid according to terms of payment, and who needs to establish credit terms with customers.
When writing a research paper on a financial statement, write about the conditions or analysis to make a financially sound decision on the amount of credit requested and the terms on which credit would be given. If the customer’s financial position is dubious, the analysis would have to be very detailed. After all findings on the customer’s financial position are completed, a decision could be reached on what terms to give credit, if any.
Include in your research paper on a financial statement the sources of information essential in making a credit decision:
Previous statements show a picture of the type of business, the customer requesting the credit is operating. For accurate information about the financial standing of the company, companies usually contact credit reporting agencies, trade groups and details in the credit application.
Essential details in your research paper on a financial statement should include:
- The business name and permanent address of the company
- Whether the business is a Partnership, Proprietorship, Corporation or any other type of business.
- When was the business established, i.e. the length of time of the establishment of the business
- Method (s) of operation and business activities.
Information for your paper on a financial statement provided by credit agencies and trade groups would be:
- Complete history of the business
- If the company usually meets its financial obligations
- Is the company involved in any litigation?
- The character of the directors and top management
Next in your paper on a financial statement, include verifiable information from the Bankers of the company making the credit request, which should include the following:
- Length of time that he has had an account with that bank
- Daily/weekly/monthly/yearly transactions i.e. Deposit balances, Current account, Savings accounts etc.
Information about lines of credit must be:
Amount of credit accorded to the client, loan restrictions, any current loans, current credit availability, any violations committed by the client and the expiry date of any loans previously obtained from the bank. This information will clarify the customer’s ability to pay, and other financial information relevant to the credit line.
The most important part of your college research paper on a financial statement would be the audit statement, provided by a Certified Public Accountant. The auditor’s opinion is provided in the cover letter of the financial statements. Although a financial statement is the responsibility of the management of the company, still the auditor is legally liable for what is written in the opinion.
Looking at the company’s profitability is the best indicator of how the company operated in the past, and the future of the company.