Preparation of your financial statements is one of the last steps in the accounting cycle, using information from the previous financial statements and your trial balance to develop IFRS-compliant financial statements.
At Samasi, we understand the importance of accurate and timely financial reporting. Our annual financial statements services are designed to help your business meet regulatory requirements, provide transparency to stakeholders, and make informed business decisions. With our expertise in financial reporting and deep knowledge of accounting standards, we are committed to delivering high-quality financial statements that reflect the true financial position of your organization.
Based on your needs, we can provide a financial statement analysis and file your tax returns.
Financial Statement Preparations include the following:
Prepare Statement of Financial Position (Balance Sheet)
- The balance sheet illustrates the company’s financial position – it’s a snapshot of the last day of the accounting cycle.
Prepare Statement of Changes in Equity
- The statement of retained earnings reflects the distribution of profit between retained earnings and dividends, movement in share capital, and share premium
Prepare a Statement of Comprehensive Income (Income Statement)
- The income statement calculates the net profit or loss, which is determined by sales revenue, expenses, and general ledger records.
Prepare Cash Flow Statement
- From a cash basis, the statement of cash flow is a compilation and comparison of information from the three main financial reports: income, retained earnings, and balance sheet.
Financial Statement Analysis
- Business owners may not need all the details, but they definitely need to understand the BIG PICTURE of their current financial and cash positions. These insights are crucial when making business operation decisions.
- Prepare the future budget (One year, two years, or three years, depending on management needs)
- Review performance
- Budget vs Actual
- Current year vs Prior year
- A five-year review of actual performance
- Margin growth
- Expenses growth vs revenue growth (Is there a positive leverage in the investments being done in operating expenses refer to the few examples below)
- Example 1
- Samasi Audit’s Income grew by 8% from the prior year (2015), ignoring the inflation
- Expenses grew by 12% from the prior year ignoring inflation
- Conclusion Samasi Audit has had a negative de-leverage in the business of 4 points, we spent more and got less out of increased expenditure. The key question to answer now will be WHY – 4 points?
- Example 2
- Samasi Advisory’s Income grew by 14% from the prior year, ignoring the inflation
- Expenses grew by 7% from the prior year ignoring inflation
- Conclusion Samasi Advisory had a positive leverage of 7 points, but is this sustainable?
- Example 3
- Samasi Advisory and Tax combined (assuming we are working from an R 100 base)
- Revenue grew R 14 and R 7 respectively. Total R 21 over sales of R 200. Overall growth is 10.5%
- Expenses grew by R 7 and R 12 respectively. Total expenses for the period under review are R 19. Overall growth in expenses 9.5%
- In total Samasi Advisory and Tax had a positive leverage of 1 point
- Samasi Advisory and Tax combined (assuming we are working from an R 100 base)
The above 3 scenarios give management a good insight into what is happening in the individual two divisions and a consolidated picture.
This is where we come in with suggested solutions.
File Financial Statement Reports
- All companies, foreign and domestic, are required to file financial statements with SARS (South African Revenue Services).
Contact us today to learn more about our annual financial statements services and how we can support your business. Let us be your trusted partner in financial reporting, and compliance, and provide valuable insights into your organization’s financial performance.