statement of financial position essay

• Statement of Financial Position

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• What is the Statement of Financial Position?

Assets Section

Liabilities section, equity section, does the balance sheet always balance.

The statement of financial position, often called the  balance sheet , is a financial statement that reports the assets, liabilities, and equity of a company on a given date. In other words, it lists the resources, obligations, and ownership details of a company on a specific day. You can think of this like a snapshot of what the company looked like at a certain time in history.

This definition is true in the sense that this statement is a historical report. It only shows the items that were present on the day of the report. This is in contrast with other financial reports like the income statement that presents company activities over a period of time. The statement of financial position only records the company account information on the last day of an accounting period.

In this sense, investors and creditors can go back in time to see what the financial position of a company was on a given date by looking at the balance sheet.

Let’s take a look at a statement of financial position example.

As you can see from our example template, each balance sheet account is listed in the accounting equation order. This organization gives investors and creditors a clean and easy view of the company’s resources, debts, and economic position that can be used for  financial analysis purposes .

Investors use this information to compare the company’s current performance with past performance to gauge the growth and health of the business. They also compare this information with other companies’ reports to decide where the opportune place is to invest their money.

Creditors, on the other hand, are not typically concerned with comparing companies in the sense of investment decision-making. They are more concerned with the health of a business and the company’s ability to pay its loan payments. Analyzing the leverage ratios, debt levels, and overall risk of the company gives creditors a good understanding of the risk involving in loaning a company money.

Obviously, internal management also uses the financial position statement to track and improve operations over time.

Now that we know what the purpose of this financial statement is, let’s analyze how this report is formatted in a little more detail.

The statement of financial position is formatted like the  accounting equation  (assets = liabilities + owner’s equity). Thus, the assets are always listed first.

Assets are resources that the company can use to create goods or provide services and generate revenues. There are many ways to format the assets section, but the most common size balance sheet divides the assets into two sub-categories: current and non-current. The current assets include cash, accounts receivable, and inventory. These resources are typically consumed in the current period or within the next 12 months.

The non-current assets section includes resources with useful lives of more than 12 months. In other words, these assets last longer than one year and can be used to benefit the company beyond the current period. The most common non-current assets include property, plant, and equipment.

Liabilities are debt obligations that the company owes other companies, individuals, or institutions. These range from commercial loans, personal loans, or mortgages. This section is typically split into two main sub-categories to show the difference between obligations that are due in the next 12 months, current liabilities, and obligations that mature in future years, long-term liabilities.

Current debt usually includes accounts payable and accrued expenses. Both of these types of debts typically become due in less than 12 months. The long-term section includes all other debts that mature more than a year into the future like mortgages and long-term notes.

Equity consists of the ownership of the company. In other words, this measures their stake in the company and how much the shareholders or partners actually own. This section is displayed slightly different depending on the type of entity. For example a corporation would list the common stock, preferred stock, additional paid-in capital, treasury stock, and retained earnings. Meanwhile, a partnership would simply list the members’ capital account balances including the current earnings, contributions, and distributions.

In the world of nonprofit accounting, this section of the statement of financial position is called the net assets section because it shows the assets that the organization actually owns after all the debts have been paid off. It’s easier to understand this concept by going back to an accounting equation example. If we rearrange the accounting equation to state equity = assets – liabilities, we can see that the equity of a non-profit is equal to the assets less any outstanding liabilities.

Notice that the balance sheet is always in balance. Just like the accounting equation, the assets must always equal the sum of the liabilities and owner’s equity. This makes sense when you think about it because the company has only three ways of acquiring new assets.

It can use an asset to purchase and a new one (spend cash for something else). It can also take out a loan for a new purchase (take out a mortgage to purchase a building). Lastly, it can take money from the owners for a purchase (sell stock to raise cash for an expansion). All three of these business events follow the accounting equation and the  double entry accounting system  where both sides of the equation are always in balance.

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• Financial Accounting Basics
• Accounting Principles
• Accounting Cycle
• Financial Statements
• Income Statement
• Multi Step Income Statement
• Other Comprehensive Income
• Extraordinary Items
• Statement of Stockholders Equity
• Balance Sheet
• Classified Balance Sheet
• Cash Flow Statement
• Cash Flows – Direct Method
• Cash Flows – Indirect Method
• Statement of Retained Earnings
• Pro Forma Financial Statements
• Financial Ratios

Understanding the Statement of Financial Position (Balance Sheet) and Its Importance in Financial Reporting

Definition:.

The Balance Sheet, also known as the Statement of Financial Position, is one of the five essential Financial Statements that provide crucial financial information about an entity at the end of the balance sheet date.

The Balance Sheet presents three key pieces of information, including Assets, Liabilities, and Equity. It is typically presented in a comparative format, such as for example, as of 31 December 20X1 and 31 December 20X0.

Assets in the Balance Sheet are divided into two categories based on their nature and accounting classification: Current Assets and Non-Current Assets.

Non-Current Assets typically include the company’s tangible assets, such as buildings, land, and machinery, while current assets encompass the company’s liquid assets, such as cash, accounts receivable, and inventories.

By presenting these important financial details, the Balance Sheet allows stakeholders to gain insight into a company’s financial position and make informed decisions regarding investment, lending, or partnership opportunities. It is an essential tool for financial analysis, risk assessment, and decision-making.

Same as assets, liabilities are also separated into two classifications: Current Liabilities and Non-Current Liabilities . For example, the company will need a long-term loan to pay off in more than twelve months from the reporting date reports under the non-current liabilities.

Current liabilities include short-term loans, accounts payable, and others payable that the company will need to pay within twelve months.

The equity section contains the information that records the resources that owners invested and invested into the entity with the recording of gain or loss accumulation.

The balance of equity is affected by an income statement as well as assets and liabilities.

Noted, IFRS now has changed the words to call Balance Sheet to Statement of Financial Position.

So if your financial statements are prepared based on IFRS, then you should use Statement of Financial Position instead of Balance Sheet.

Accounting Equation for Balance Sheet : Assets = Liabilities + Equity

Three Main Elements

The following are the three main elements of the statement of financial position:

• Liabilities

Here is the detail,

Assets: First Items in the Balance Sheet

Assets are the resources belonging to the entity. Total assets here will report all types of entity’s assets. These include current assets and non-current assets. Current asset rank above non-current assets.

The common examples of assets are land, building, cars, cash in the bank and on hand, inventories, and accounts receivable. Any assets that bong to the owners or shareholders do not include here.

In the Balance Sheet, Assets are reported in the first part before Equity and Liabilities.

Current Assets :

1) cash and cash equivalence:.

Report the balance of cash and cash equivalence that is to the entity at the reporting date. It could be cash on hand, petty cash, cash deposit in the bank, or other financial note that are equivalent to cash. Equivalence to cash means easily converting into cash.

2) Accounts Receivable:

Accounts receivable are the receivable amount by the entity from its customers as the result of credit sales. This amount is expected to be received in a period of fewer than twelve months from the reporting date or Balance Sheet date.

If part of receivables is expected to receive over twelve months, then they have to class into long-term assets.

3) Prepaid Expenses:

Prepaid is the amount that the entity pays to its suppliers in advance to secure, through, services or products.

For example, if the company wants to purchase computers, and because the computers are limited in the stores, or the computer needs to order from an outside country, the supplier requires the company to make a certain deposit.

At the time of deposit, the entity does not receive the computer from its supplier yet. Prepaid expenses are the entity’s assets and have to be recorded in the balance. They are not expenses yet.

4) Inventories:

Inventories here include all kinds of inventories: Raw material, work in process, and finish goods. At the end of the accounting period, the entity usually performs physical counts of all inventories and then qualifies them.

Auditors normally accompany the inventory count. Inventories are the main items in the Balance Sheet of a manufacturing company. Inventories normally record at selling prices less cost to sell.

5) Due to related parties:

This amount is required to be reported as a result of the accounting standard requirement. Amounts due from related parties are required to be present in the balance sheet and need to be disclosed properly in the note to financial statements.

This amount results from selling products or rendering services to its related parties—for example, parent company, associate, and subsidiary.

Non-Current Assets:

Non-current assets here include both tangible and intangible assets of an entity. Here is the detail of all of them.

1) Tangible Non-Current Assets:

• Machinery needs to class and reported as non-current assets as its useful life of it are longer than one year. The machinery is recorded in the Balance Sheet at cost. And then depreciation based on entity depreciation policies. Once the entity disposes of, the cost and accumulated depreciation related to machinery need to be removed from the fixed assets schedule and Balance Sheet as well.
• Equipment: This is the kind of equipment that uses in the entity which has a useful life of more than twelve months period. The same as machinery and other long-term assets, equipment is recorded as costs.
• Leasehold Improvements: this type of asset happens when the entity does not own the building or office that it is using. The office or building is rented from others, and because of business requirements, the entity makes an improvement on it. For example, the entity rents an office building. The owner of the building provides only the building space. All other decorations and rooms for staff are the responsibility of the entity. In this case, to make decoration and room, the entity will incur costs that are not immediately classified as expenses. They treat as assets and depreciate as expenses over the period of time in the income statement.
• Buildings: Buildings here could be the office building for the head office or brand. They are recorded as non-current assets and depreciate based on their useful life.
• Vehicles: they include cars for use in the company or similar types of vehicles are included here. Vehicles’ rental experience should not record as fixed assets. The expenses should be recorded in the income statement.
• Long-term notes receivable: This is the same as the account receivable that we record in the current assets. The reason we record this here is that part of receivables is expected to receive in a period of more than twelve months.

2) Intangible Non-Current Assets:

• Investments:  this is referring to long-term investment that expects to be recovered into cash in the long term or more than twelve months. The kind of investment is like stock or bond something.
• Goodwill: This kind of asset happens when the entity purchases the new subsidiary while the net book value of the assets of that subsidiary is less than what the entity offers.
• Trademarks: the costs of assets that the entity purchases probably from the government or professional body.
• Patent: This is the cost that an entity purchases the right to operate the services or sales of the products in the country. This is usually a year.

Liabilities: Second Item in the Balance Sheet

There are two types of liabilities in the Balance Sheet. They are,

1) Short-term liabilities

Short-term liabilities are the liabilities that are expected to be paid within a period less than twelve months from the Balance Sheet date.

• Accounts Payable is the amount that the entity owes to its suppliers as the result of purchases of goods, materials, or the rendering of services.
• Accrued Expenses: The accrual is almost the same as the account payable. But just because you are not receiving the invoices from your suppliers yet, you can not book what the entity owns as payable.
• Unearned Revenue is a type of liability, and this is a contrast to the deposit. For example, you are offering services to your customers, and they pay you in advance. In this case, you have not provided the services to them yet. In such a case, you have to book as unearned revenue rather than revenue.
• Current Portion of Long-term Debt: this is part of the long-term debt. For example, the entity owns the bank for 10,000, and the loan needs to install on a monthly basis. In this case, you have to figure out how much the amount that the entity has to pay within one year. That amount is the current portion of long-term debt.

2) Long-term Liabilities

Here is a sample of long-term liabilities.

• Mortgage Payable this is the number of mortgage liabilities that are expected to be paid longer than twelve months period, and for that amount that is payable less than twelve months, we need to class them out to current liabilities.
• Notes Payable is quite the same as the account payable. These amounts are what we expected to pay in longer than twelve months periods.
• Long-term Loans: these are the long-term liabilities that are expected to pay in a period of more than twelve months.
• Finance Lease is the kind of financing that a company occurs assets by obtaining finance from another company or the entity that they are purchasing.

Shareholders’ Equity: Third Items in the Balance Sheet

Shareholders’ Equity, Owner’s Equity, or Stockholders’ Equity are called differently in the Balance Sheet because of the nature of the business.

For a private company, we usually called owner equity, and for a corporation, we usually call it shareholders or stockholder equity.

The total amount of shareholders’ equity is the leftover amounts from assets and liabilities as well as from business operations. For example, if the company operating a loss, the equity will be reduced eventually.

There are many sub-components that are recorded under shareholders’ equity. These include Common Stock, Prefer Stock, Retained Earnings , and Accumulated Other Comprehensive Incomes.

All sub-elements that record or class under equity elements are increasing in credit site and decrease in debit side the same as liabilities element.

1) Common Stock:

Common Stock or Ordinary shares are the same, and this class of shares normally has voting right. The ordinary share is recorded at par value in the balance sheet under equity sections.

Detail of it could be found in the statement of change in equity and Noted to Financial Statements.

This types of stock represent the ownership of the corporation. If the corporation goes into liquidation, then the holders of this stock have less priority to get payments than others preferred shareholders or lenders.

2) Retain Earning or Accumulated Losses/ Profit :

Retain earnings or accumulated losses are recording the equity section of the balance sheet. This is the accumulation of profits or losses that a corporation or entity has earned so far.

The balance of return earnings could be reduced once the entity makes dividend payments to its shareholders or reinvestment.

It is depending on the company’s investment and financial strategy. Retain earnings can be calculated by the accumulation of the beginning balance of retained earnings plus net income during the year and minus dividend payments during the year.

3) Reserve:

It is normally the statutory or standard requirement for the company to make a reservation for a special occasion that could happen unexpectedly.

Sometimes it is named Capital Reserve. For example, if the corporation is the bank, then the central banks might require the corporation to have certain amounts of capital reserve for liquidation.

4) Dividend:

The dividend is the amount that reduces the total shareholders’ equity. It is what the company pays its shareholders and is mostly decided by the board at the end of the year.

A dividend might be reported as the contract to retain earnings, or sometimes recorded as the net off retain earnings.

Statement of Financial Position Template and Example:

ABC Limited Liability Company

Statement of Financial Position

As of December 31, 2021 and 2022

In this example, we can see that ABC Limited Liability Company’s total assets increased from $300,000 in 2021 to $370,000 in 2022.

This was primarily driven by an increase in both current and non-current assets. Meanwhile, the company’s total liabilities also increased from $150,000 in 2021 to $190,000 in 2022, primarily due to an increase in both current and non-current liabilities.

Despite the increase in liabilities, the company’s shareholders’ equity also increased from $150,000 in 2021 to $180,000 in 2022. This suggests that the company’s financial position improved over the year, even though it took on additional liabilities.

Overall, this statement provides a clear and standardized view of ABC Limited Liability Company’s financial position, and allows for easy comparison between the two years.

Benefit that Statement of Financial Position Provide to Users

The Statement of Financial Position, also known as the Balance Sheet, provides several benefits to users, including:

• Snapshot of a company’s financial position: The Statement of Financial Position provides a snapshot of a company’s financial position at a specific point in time. This includes a breakdown of the company’s assets, liabilities, and equity, which can help users understand the company’s financial health and stability.
• Comparison of financial position over time: By providing comparative figures for different periods, the Statement of Financial Position allows users to compare a company’s financial position over time. This can help users identify trends and patterns and assess the company’s financial performance and stability.
• The basis for financial analysis: The information provided in the Statement of Financial Position can be used as a basis for financial analysis. By comparing a company’s assets and liabilities, users can assess its liquidity, solvency, and financial leverage. This can help investors and other stakeholders make informed decisions about whether to invest in or support the company.
• Basis for decision-making: The Statement of Financial Position can also be used as a basis for decision-making. For example, lenders may use the information in the statement to assess a company’s creditworthiness and decide whether to provide a loan. Investors may use the information to decide whether to buy or sell shares in the company.
• Transparency and accountability: By providing a clear and standardized view of a company’s financial position, the Statement of Financial Position promotes transparency and accountability. This can help build trust between the company and its stakeholders, and demonstrate the company’s commitment to sound financial management practices.

Limitation of Statement of Financial Position Provide to Users

While the Statement of Financial Position (Balance Sheet) is a useful financial statement for understanding a company’s financial position, there are some limitations to its usefulness for users. These limitations include:

• Limited to a specific point in time: The Statement of Financial Position only provides a snapshot of a company’s financial position at a specific point in time. The statement does not show how the company’s financial position has changed over time, which can limit its usefulness for assessing trends and patterns.
• Historical cost basis: The assets and liabilities in the Statement of Financial Position are recorded at their historical cost, which may not reflect their current market value. This can limit the usefulness of the statement for assessing the current value of a company’s assets and liabilities.
• Limited information on future cash flows: The Statement of Financial Position does not provide information on a company’s future cash flows, which can limit its usefulness for predicting future financial performance.
• Limited information on non-financial factors: The Statement of Financial Position does not provide information on non-financial factors that may impact a company’s financial performance, such as changes in market conditions, technological developments, or changes in customer preferences.
• Differences in accounting policies: Different companies may use different accounting policies to prepare their Statement of Financial Position, which can make it difficult to compare the financial position of different companies.
• Limited information on intangible assets: The Statement of Financial Position may not provide detailed information on a company’s intangible assets, such as intellectual property or brand value, which can be a significant component of a company’s overall value.

Conclusion:

• Balance Sheet is the statement that shows the balance of assets, liabilities, and equity of the entity at the end of accounting periods.
• This statement can be prepared base on a monthly, quarterly, or annual comparative basis.
• It provides useful data about the entity’s financial status or position.
• It provides useful data for Financial ratio analysis.

Written by Sinra

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Chapter 4: Financial Reports – Statement of Financial Position and Statement of Cash Flows

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• Glenn Arnold & Suzanne Kyle
• Athabasca University via Lyryx

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Amazon's Cash Flow Position

In 2014, Amazon reported its quarterly earnings for their year-to-date earnings release. Since the trend has been for their profits to slide downward in the recent past, initial speculation was that this was causing investor discontent resulting in decreasing stock prices. But was it?

Even though profits were on a downward trend, the earnings releases showed that the operating section of the statement of cash flow (SCF) was reporting some healthy net cash balances that were much higher than net income. This is often caused by net income including large amounts of non-cash depreciation expense.

Moreover, when looking at free cash flow, it could be seen that Amazon had been making huge amounts of investment purchases, causing a sharp drop in the free cash flow levels compared to the operating section of the SCF. However, even with these gigantic investment purchases, free cash flow continued to soar well above its net income counterpart by more than $1 billion. What this tells investors is that there are timing differences between what is reported as net income on an accrual basis and reported as cash flows on strictly a cash basis.

The key to such cash flows success lies in the cash conversion cycle (CCC). This is a metric that measures how many days it takes for a company to pay it suppliers for its resale inventory purchases compared to how many days it takes to convert this inventory back into cash when it is sold and the customer pays their account. For example, if it takes 45 days to pay the supplier for resale inventory and only 40 days to sell and receive the cash from the customer, this creates a negative CCC of 5 days of access to additional cash flows. In industry, Costco and Walmart have been doing well at maintaining single-digit CCC's but Amazon tops the chart at an impressive negative 30.6 days in 2013. Apple also managed to achieve a negative CCC in 2013, making these two companies cash-generating giants in an often-risky high-tech world.

Amazon is using this internal access to additional cash to achieve significant levels of growth; from originally an online merchant of books to a wide variety of products and services, and, most recently, to video streaming. Simply put, Amazon can expand without borrowing from the bank, or from issuing more stock. This has landed Amazon's founder and CEO, Jeff Bezoz, an enviable spot in Harvard Business Review's list of best performing CEOs in the world.

So, which part of the CCC metric is Amazon leveraging the most? While it could be good inventory management, it is not. It is the length of time Amazon takes to pay its suppliers. In 2013, the company took a massive 95.8 days to pay its suppliers, a fact that suppliers may not be willing to accept forever.

Though it might have been too early to tell, some of the more recent earnings release figures for Amazon are starting to show the possibility that the CCC metric may be starting to increase. This shift might be a cause for concern for the investors. Moreover, this could be the real reason why Amazon's stock price was faltering in 2014 rather than because of the decreasing profits initially considered by many to be the culprit.

(Source: Fox, 2014)  

Learning Objectives

After completing this chapter, should be able to:

• Describe the statement of financial position/balance sheet (SFP/BS) and the statement of cash flows (SCF), and explain their role in accounting and business.
• Identify the various disclosure requirements for the SFP/BS and prepare a SFP/BS in good form.
• Identify and describe the factors can affect the SFP/BS, such as changes in accounting estimates, changes in accounting policies, errors and omissions, contingencies and guarantees, and subsequent events.
• Explain and describe an acceptable format for the SCF.
• Describe and prepare a SCF in good form with accounts analysis as required, and interpret the results.
• Identify and describe the types of analysis techniques that can be used for the SFP/BS and the SCF.

Introduction

In Chapter 3 we discussed three of the core financial statements. This chapter will now discuss the remaining two, which are the SFP/BS, and the SCF. Both of these statements are critical tools used to assess a company's financial position and its current cash resources, as explained in the opening story about Amazon. Cash is one of the most critical assets to success as will be discussed in a subsequent chapter on cash and receivables. How an investor knows when to invest in a company and how a creditor knows when to extend credit to a company is the topic of this chapter.

NOTE: IFRS refers to the balance sheet as the statement of financial position (SFP) and ASPE continues to use the term balance sheet (BS). To simplify the terminology, this chapter will refer to this statement as the SFP/BS, unless specific reference to either one is necessary.

Chapter Organization 

• 4.1: Financial Reports- Overview
• 4.2.1: Disclosure Requirements
• 4.2.2: Factors Affecting the Statement of Financial Position/Balance Sheet (SFP/BS)
• 4.3.1: Preparing a Statement of Cash Flows
• 4.3.2: Disclosure Requirements
• 4.3.3: Interpreting the Statement of Cash Flows
• 4.4: Analysis
• 4.5: Chapter Summary
• 4.6: References
• 4.7: Exercises

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Statement of financial position – Example and guide

If you run a small business, you’re probably familiar with the term ‘ balance sheet ’. However, like ‘the Artist Formerly Known as Prince’ the balance sheet is now known as the ‘Statement of financial position’.

The Statement is an important financial document that helps you run your business efficiently and profitably. It provides a guide to the financial health of your business, so it’s essential to understand its components and their significance.

In this guide, we show an example of a Statement of financial position and we’ll explain the various elements.

The Statement shows the financial position at a specific point in time, which is normally reported a your years-end or when management accounts are provided to stakeholders. By comparing figures for other years, you can compare performance with previous year and highlight any risks or opportunities.

Statement of financial position example

Here is a statement of financial position example at 31st December 20XX:

Read More: Everything you need to know about Creditors and Debtors

The example of a Statement of financial position includes a number of important terms.

Fixed assets

These are assets that you own and keep for a longer period to run your business, rather than items for sale. Typically, they would include property, vehicles, machinery and equipment. You put a value on these, which would have originally been based on the price you paid for the asset.

Intangible assets

You may also have intangible assets, which might include the value of patents, licenses, trademarks or copyrights that your business owns.

Depreciation

Depreciation lowers the value of those assets over time. HMRC allows you to depreciate different types of asset by a specific percentage each financial year.

Total fixed assets

This is the current value of your fixed assets after you have deducted depreciation.

Current assets

These are assets that you can turn into cash in the short term. They are an indication of your liquidity.

Debtors represent the amount of money owed by your customers at the time you compile your Statement. You could calculate this figure from invoices due for payment by the Statement date.

This is the amount of physical cash you hold. Generally, this would be petty cash you hold for settling expenses.

This figure is taken from the balance of funds in your bank accounts on the date of the Statement.

Adding together the value of your fixed assets, current assets and minus any creditors gives you the value of all your net assets.

Current liabilities

This represents the amount of money you owe on the date of the Statement.

This is the amount of money you owe to suppliers, based on invoices due for settlement by the date of the Statement.

This figure represents any Corporation Tax , VAT or PAYE payments due by the date of the Statement.

This is the outstanding amount of any loans or grants on the date of the Statement, including capital and interest.

Capital and reserves

This figure covers the amount of money shareholders have invested in the business.

Profit/loss

The profit or loss you made in the financial year is brought across from your profit and loss statement .

Capital at end of year

Adding together your profit or loss, capital and reserves and funds not yet paid to settle current liabilities provides you with a figure for capital at the end of the year. This figure should be the same as the value of total assets.

Related: What are statutory accounts? A short guide 

Analysing a statement of financial position

Creating and reviewing your Statement of financial position is not just an accounting exercise , it is an important tool for financial management and it can help you make effective, financially sound decisions about maintaining and growing your business .

In its simplest form the Statement indicates the net worth of your business – the difference between your total assets and your current liabilities.

One important indicator is the difference between current assets and current liabilities. Do you have enough funds in terms of cash, bank deposits and customer payments due to settle your liabilities?

An imbalance here could highlight a potential cash flow issue before it becomes a major problem. You may need to look for additional working capital to deal with the problem.

Analysing current liabilities also indicates the level of debt for the business. If the level of debt is high or if it has increased significantly over the previous year, you could face serious problems in the future if your earnings are not sustainable.

The Statement can provide insight into other important business ratios and trends. For example, the section on debtors can tell you how long it takes to receive payment from customers. You may need to tighten payment terms to improve cash flow.

Analysing the Statement gives you an indication of the health of your own business. You can also use the information to compare your performance and your key ratios with other companies in your market. For example, what is the average ratio of debt in the industry and how do you compare? How much capital do similar-sized businesses employ?

Securing funding

The Statement of financial position can have a dual purpose. It can highlight the need for additional funding and help you to secure it.

Lenders and investors require evidence and reassurance of your company’s financial health and prospects to reduce risk before advancing funds. They want to see a picture of financial health over a period of time, so may wish to see several statements and they want to see that you have a good record of collecting payments and repaying debts on time.

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Statement of Financial Position

Understanding the statement of financial position.

• The Statement of Financial Position , often referred to as the Balance Sheet, is a financial document that depicts the financial health of a company at a specific point in time.
• It lists the assets, liabilities, and owner’s equity . The fundamental equation is: Assets = Liabilities + Equity .
• Thus, it provides an overview of what a company owns (assets), what it owes (liabilities), and the amount of investment by stakeholders (equity).

Components of Statement of Financial Position

• Assets : Assets are what the company owns and can be converted into cash. They are categorised into Current Assets (cash, accounts receivable, inventory etc.) and Non-current Assets (property, plant, equipment etc.)
• Liabilities : These are obligations that a company owes to other parties. Similar to assets, liabilities are categorised into Current Liabilities (accounts payable, salaries payable etc.) and Non-current Liabilities (loans, deferred tax liabilities etc.).
• Equity : The equity section represents the company’s net assets - the value left for the shareholder if all assets were liquidated and all liabilities paid off. It typically includes retained earnings and issued share capital.

Analysing the Statement of Financial Position

• A thorough analysis can reveal crucial information about an entity’s liquidity, solvency, and financial flexibility .
• The liquidity analysis involves examining the company’s ability to meet short-term obligations, typically assessed through ratios such as the current ratio and quick ratio.
• Solvency analysis seeks to understand a company’s ability to meet long-term liabilities, often using ratios such as debt to equity or interest cover ratio.
• Comparing against industry peers can provide important comparative benchmarks.

Limitations of the Statement of Financial Position

• Since it is a snapshot at a specific time, it does not necessarily indicate the company’s consistent financial status.
• It often does not account for intangible assets which can considerably impact a company’s value.
• Many items are evaluated subjectively, making interpretation of the information more challenging.

Practical Applications of Statement of Financial Position

• When scrutinising assets, a broad array of assets is generally indicative of a more secure financial position.
• Regarding liabilities, it is preferable to have a larger proportion of equity to debt, signifying less risk.
• In terms of equity, retained earnings reflect profitability and can, therefore, be an important indicator of financial performance.

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Financial Statement Analysis: How It’s Done, by Statement Type

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.

What Is Financial Statement Analysis?

Financial statement analysis is the process of analyzing a company’s financial statements for decision-making purposes. External stakeholders use it to understand the overall health of an organization and to evaluate financial performance and business value. Internal constituents use it as a monitoring tool for managing the finances.

Key Takeaways

• Financial statement analysis is used by internal and external stakeholders to evaluate business performance and value.
• Financial accounting calls for all companies to create a balance sheet, income statement, and cash flow statement, which form the basis for financial statement analysis.
• Horizontal, vertical, and ratio analysis are three techniques that analysts use when analyzing financial statements.

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How to Analyze Financial Statements

The financial statements of a company record important financial data on every aspect of a business’s activities. As such, they can be evaluated on the basis of past, current, and projected performance.

In general, financial statements are centered around generally accepted accounting principles (GAAP) in the United States. These principles require a company to create and maintain three main financial statements: the balance sheet, the income statement, and the cash flow statement. Public companies have stricter standards for financial statement reporting. Public companies must follow GAAP, which requires accrual accounting. Private companies have greater flexibility in their financial statement preparation and have the option to use either accrual or cash accounting.

Several techniques are commonly used as part of financial statement analysis. Three of the most important techniques are horizontal analysis , vertical analysis , and ratio analysis . Horizontal analysis compares data horizontally, by analyzing values of line items across two or more years. Vertical analysis looks at the vertical effects that line items have on other parts of the business and the business’s proportions. Ratio analysis uses important ratio metrics to calculate statistical relationships.

Companies use the balance sheet, income statement, and cash flow statement to manage the operations of their business and to provide transparency to their stakeholders. All three statements are interconnected and create different views of a company’s activities and performance.

Balance Sheet

The balance sheet is a report of a company’s financial worth in terms of book value. It is broken into three parts to include a company’s assets ,  liabilities , and  shareholder equity . Short-term assets such as cash and accounts receivable can tell a lot about a company’s operational efficiency; liabilities include the company’s expense arrangements and the debt capital it is paying off; and shareholder equity includes details on equity capital investments and retained earnings from periodic net income. The balance sheet must balance assets and liabilities to equal shareholder equity. This figure is considered a company’s book value and serves as an important performance metric that increases or decreases with the financial activities of a company.

Income Statement

The income statement breaks down the revenue that a company earns against the expenses involved in its business to provide a bottom line, meaning the net profit or loss. The income statement is broken into three parts that help to analyze business efficiency at three different points. It begins with revenue and the direct costs associated with revenue to identify gross profit . It then moves to operating profit , which subtracts indirect expenses like marketing costs, general costs, and depreciation. Finally, after deducting interest and taxes, the net income is reached.

Basic analysis of the income statement usually involves the calculation of gross profit margin, operating profit margin, and net profit margin, which each divide profit by revenue. Profit margin helps to show where company costs are low or high at different points of the operations.

Cash Flow Statement

The cash flow statement provides an overview of the company’s cash flows from operating activities, investing activities, and financing activities. Net income is carried over to the cash flow statement, where it is included as the top line item for operating activities. Like its title, investing activities include cash flows involved with firm-wide investments. The financing activities section includes cash flow from both debt and equity financing. The bottom line shows how much cash a company has available.

Free Cash Flow and Other Valuation Statements

Companies and analysts also use free cash flow statements and other valuation statements to analyze the value of a company . Free cash flow statements arrive at a net present value by discounting the free cash flow that a company is estimated to generate over time. Private companies may keep a valuation statement as they progress toward potentially going public.

Financial statements are maintained by companies daily and used internally for business management. In general, both internal and external stakeholders use the same corporate finance methodologies for maintaining business activities and evaluating overall financial performance .

When doing comprehensive financial statement analysis, analysts typically use multiple years of data to facilitate horizontal analysis. Each financial statement is also analyzed with vertical analysis to understand how different categories of the statement are influencing results. Finally, ratio analysis can be used to isolate some performance metrics in each statement and bring together data points across statements collectively.

Below is a breakdown of some of the most common ratio metrics:

• Balance sheet : This includes asset turnover, quick ratio, receivables turnover, days to sales, debt to assets, and debt to equity.
• Income statement : This includes gross profit margin, operating profit margin, net profit margin, tax ratio efficiency, and interest coverage.
• Cash flow : This includes cash and earnings before interest, taxes, depreciation, and amortization (EBITDA) . These metrics may be shown on a per-share basis.
• Comprehensive : This includes return on assets (ROA) and return on equity (ROE) , along with DuPont analysis .

What are the advantages of financial statement analysis?

The main point of financial statement analysis is to evaluate a company’s performance or value through a company’s balance sheet, income statement, or statement of cash flows. By using a number of techniques, such as horizontal, vertical, or ratio analysis, investors may develop a more nuanced picture of a company’s financial profile.

What are the different types of financial statement analysis?

Most often, analysts will use three main techniques for analyzing a company’s financial statements.

First, horizontal analysis involves comparing historical data. Usually, the purpose of horizontal analysis is to detect growth trends across different time periods.

Second, vertical analysis compares items on a financial statement in relation to each other. For instance, an expense item could be expressed as a percentage of company sales.

Finally, ratio analysis, a central part of fundamental equity analysis, compares line-item data. Price-to-earnings (P/E) ratios, earnings per share, or dividend yield are examples of ratio analysis.

What is an example of financial statement analysis?

An analyst may first look at a number of ratios on a company’s income statement to determine how efficiently it generates profits and shareholder value. For instance, gross profit margin will show the difference between revenues and the cost of goods sold. If the company has a higher gross profit margin than its competitors, this may indicate a positive sign for the company. At the same time, the analyst may observe that the gross profit margin has been increasing over nine fiscal periods, applying a horizontal analysis to the company’s operating trends.

Congressional Research Service. “ Cash Versus Accrual Basis of Accounting: An Introduction ,” Page 3 (Page 7 of PDF).

Internal Revenue Service. “ Publication 538 (01/2022), Accounting Periods and Methods: Methods You Can Use. ”

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Statement of Financial Position Coursework

Introduction, background of the company, valuation of shareholder value, the effect of different growth rates on the share price, the weighted average cost of capital, measurement of risk to shareholders, is the share over valued or undervalued.

Financial analysis of a particular company analysis its past and future growth. Financial performance of the company is analyzed for the past five years in order to understand the situation of the company in the market. As per the financial report, the company has been going in loss from the past five years. The net loss as per the financial performance report is increasing every year. Statement of financial position can also be defined as situation of the company’s assets, its liabilities, and owner’s equity. In order to calculate the owners Equity as per the formula, the total number of assets minus total liabilities results in the owner’s equity.

The main aim of the project is to calculate intrinsic value of a share, compare it, and know whether it is overvalue or undervalue.

Mobily is one of the largest communication services company in Saudi Arabia and it is popular for its exceptional telecommunications services. They have a mission of exceeding the customers’ expectation. They offers internet and telephone services both fixed and mobile. Mobily’s wireless service provision is one of the fastest in terms of growth in the Saudi Arabia. Nonetheless, other products and services of the company encompass network business, supply business, vending shops, Internet services, Short Message Service (SMS), multi-media services, cellular and personal computer operations and satellite operations. They have cellular devices approaches more than the number of computer; carriers are increasing assuming the role of major Internet access companies, especially in upcoming markets.

When calculating intrinsic value of a share, the future cash flows are estimated using the seven drivers of shareholders value model. These values have been estimated using historical data as provided below:

Stockholders are mainly concerned about the earnings that will eventually pay them back as dividends from the company or on the other hand retains in the company to expand shareholders interest in the company since the firm retains the earnings. Earnings per share (EPS) are expressed on a per share basis.

Growth rate of any particular company analyzes the assets, earnings and the growing dividends in the particular financial year. Dividend discount model initiates a clear understanding of different growth rates and the relationship between share price, rate of return and dividend is analyzed. Any particular company may have no growth, constant growth or non-constant growth.

Cost of equity: Discount rate is used to calculate present value of future cash flows. In order to calculate the Discount rate one can use the Capital Asset Pricing Model (CAPM) equation. This is because CAPM is a model that is widely accepted and used as a way of assessing the levels of risks associated with a particular asset that is being considered for investment. Although this model is not perfect however its use has allowed investors to somewhat predict the level of the investment risk that is associated. The main message, which CAPM model gives to its users, is that how much return premium they can expect from their investment in any security keeping in view the riskiness relative to the market benchmark. This means that the expected return on investment in an asset depends upon the risk assessment of the stock in relation to the volatilities that can be observed in the comparable set of securities or market. This also implies that it allows investors to determine the expected return on their investments in a stock, which allows them to eliminate the unsystematic risk. Thus, based on this model risk associated with the investment can be ascertained based on the assumptions that this model uses. The equation is

r e = r f + β (r m – r f )

According to gulfbase.com of 3 rd January, 2012; the companies Beta is 0.72. Risk free market is considered 3% and market to be 17%.

• r e = 0.03 + 0.72 (0.17 – 0.03)
• r e = 0.01308
• r e = 13.08%

This figure will not be used as cost of equity in the analysis as we are using book values not market values, Thus ROE is used.

Weighted average cost of capital is the average cost of components of capital. The weighted average cost of capital is computed as

There is a difference between the intrinsic value and the market value. It means the stock is undervalued by the market as compared to intrinsic value. The main reason for the differences between the market value and intrinsic value is due to forces operating in the market. The share of the company is performing better than the market and it has lower element of market risk as compared to the market itself. The amount of systematic risk in the price of the share of the company is lowered by unsystematic risk.

A company’s shareholders risk can be measured by the changes in its assets and equity in comparison to its debts. Beta is the measurement of fluctuation of a stock return for a particular period. Beta measures the risk of portfolio. Due to a lot of fluctuation in the foreign exchange market and the fluctuations in the interest rates investors are exposed to a lot of risk since the fluctuations affect their investment directly.

In order to measure the risk, a financial manager would consider building up a financial representation of the company and the market, which it operates in. This will provide a clear view of the risk assessment to the shareholder. In addition, a shareholder may consider a financial risk management for their investment. Diversifying investment is one of the ways, which are preferable in today’s market scenario. Diversifying investments help the shareholder spread their investment over a number of other investment opportunities.

A stock is undervalued when the intrinsic value is higher than the market value. Similarly, a stock is overvalued when intrinsic value of the share is lower than the market value. The share value increases when it declares a financial year profit, its disclosures about their future prospects and projects, this makes the investors invest in the organization when the organization is ready to buy back its own shares in some cases. An undervalued share is of a high risk since if the book valued price is lower than the market value there is a high risk to the investment made by the shareholders due to the loss already incurred due to the lower book value and even a higher risk is involved if the book value decreases.

The price of the share currently is 52 and intrinsic value $ 94.17.

The share or market price of Mobily is 52.00 and thereby is lower than its intrinsic value and, therefore, the stock is undervalued thus comprising a low risk to the investors and shareholders. The stock price is actually representing the company realistically in terms of its actual worth. The return on investment from the company is steady and growing steadily as well with many strong core competencies but not generating income in an explosive manner like well known technology companies do. The PE multiple is also average as well. In short, the company is a solid business however, does not belong to the impressive category either as a business or as an investment option. Solid and steady depict them perfectly.

Technically, they are the same but in the real world, the buy and sell strategy is inferior simply because there are broker’s fees that deduct amounts from your stock account every time there is a transaction on your behalf. The type of returns you gain in the end will be wiped out if ever there are any. In addition, any loss on your part would be exaggerated because of the added burden of transaction fees. Therefore, in the end, the best choice is still the buy-and-hold strategy because it saves you from transaction fees plus the flexibility of holding out much longer if the price is not favorable to you.

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IvyPanda. (2022, July 23). Statement of Financial Position. https://ivypanda.com/essays/statement-of-financial-position/

"Statement of Financial Position." IvyPanda , 23 July 2022, ivypanda.com/essays/statement-of-financial-position/.

IvyPanda . (2022) 'Statement of Financial Position'. 23 July.

IvyPanda . 2022. "Statement of Financial Position." July 23, 2022. https://ivypanda.com/essays/statement-of-financial-position/.

1. IvyPanda . "Statement of Financial Position." July 23, 2022. https://ivypanda.com/essays/statement-of-financial-position/.

Bibliography

IvyPanda . "Statement of Financial Position." July 23, 2022. https://ivypanda.com/essays/statement-of-financial-position/.

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How to write a financial need statement for your scholarship application (with examples!)

So you’re applying for a scholarship that asks you about your financial need. What do you say? How honest or specific should you be? What is TMI? In this article, we break down how to pen an awesome financial need scholarship essay or statement.

What to include in a financial need scholarship essay

Template to structure your financial need scholarship essay, introduction: your basic profile, body: your financial situation and hardships, conclusion: how you would benefit from this scholarship, was this financial need essay for a college financial aid application , now, reuse that same essay to apply for more scholarships, additional resources to help you write your financial need scholarship essay.

Many scholarships and college financial aid awards are “need-based,” given to students whose financial situation requires additional support. That’s why one of the most common college scholarship essays is a statement of financial need. This might be very explicit (“Explain your financial need”), somewhat explicit (“Describe your financial situation”), or quite open-ended (“Explain why you need this scholarship”).

In all cases, scholarship providers want to get a sense of your family’s financial picture: what your family income is, if you personally contribute to it (do you have a job?), and how much additional money you need to attend your target college (your “financial gap”).

If the essay prompt is a bit more open-ended (“Explain how this scholarship would help you”), your essay should probably be a combination of a financial need statement and a career goals / academic goals essay.  That’s because you want to show how the award will help you financially and in your academic or career goals.

Usually this statement of financial need is a pretty short scholarship essay (150-300 words), so unlike a college essay or personal statement where you have ample word count to tell anecdotes, you’ll likely need to get right to the point. 

Be sure to include: 

• If you are an underrepresented group at college, for instance, part of an ethnic minority or the first in your family to go to college
• Any relevant family circumstances, like if your parents are immigrants or refugees, as well as your parents’ occupation and how many children/family members they support financially
• How you are currently paying for college, including what you personally are doing to contribute financially (like working student jobs)
• What financial challenges/difficulties your family is facing, for instance, if a parent recently lost their job
• How you would benefit from the scholarship–including your academic and career goals (if word count allows)

Also remember to write in an optimistic tone. Writing about your financial situation or hardships might not be the most positive thing to share. But you can turn it around with an optimistic tone by writing about how these challenges have taught you resiliency and grit.

Give a short introduction to who you are, highlighting any family characteristics that might make you part of an underrepresented group at college. 

“I am a first-generation American and the first in my family to go to college. My family moved from El Salvador to New York when I was seven years old, to escape the violence there.”

Example 2: 

“I am from a working-class family in Minnesota. My family never had a lot, but we pooled our efforts together to make ends meet. My parents both worked full-time (my father as a mechanic, my mother as a receptionist at the local gym), while my siblings and I all worked weekend jobs to contribute to the family income.”

Dive into the details. How are you currently planning to pay for college? The idea here is to show that you and your family have made a good-faith effort to earn enough money to pay your tuition, but that it has simply not been enough. 

Make sure you describe your parents’ occupation, any savings (like a 529 College Savings Account), and any student jobs. You might also discuss any sudden changes in fortune (e.g. parent fell ill or lost their job) that have ruined your original financial plans. 

Example 

As immigrants with limited English, my parents have had to accept low-paying jobs. My father is an Uber driver, and my mother is a housekeeper. They earn just enough to pay our rent and put food on the table, so I’ve always known they could not help me pay for college.  So I’ve been proactive about earning and saving my own money. Since age 11, I’ve worked odd jobs (like mowing my neighbors’ lawns). At age 16, I started working at the mall after school and on weekends. Through all these jobs, I’ve saved about $3000. But even with my financial aid grants, I need to pay $8000 more per year to go to college. 

Bring it home by wrapping up your story.  Explain how you plan to use the financial aid if you’re awarded this scholarship. How will you benefit from this award? What will you put the money toward, and how will it help you achieve your academic and/or career goals?

Scholarship review boards want to know that their money will be put to good use, supporting a student who has clear plans for the future, and the motivation and determination to make those plans a reality. This is like a shortened, one-paragraph version of the “Why do you deserve this scholarship?” essay . 

Winning $5000 would help me close the financial gap and take less in student loans. This is particularly important for me because I plan to study social work and eventually work in a role to support my community. However, since these jobs are not well paid, repaying significant student loans would be difficult. Your scholarship would allow me to continue down this path, to eventually support my community, without incurring debt I can’t afford.

My plan is to study human biology at UC San Diego, where I have been admitted, and eventually pursue a career as a Nurse-Practitioner. I know that being pre-med will be a real academic challenge, and this scholarship would help me focus on those tough classes, rather than worrying about how to pay for them. The $2000 award would be equivalent to about 150 hours of working at a student job. That’s 150 hours I can instead focus on studying, graduating, and achieving my goals. 

Sometimes this financial need statement isn’t for an external scholarship. Instead, it’s for your college financial aid office.

In that case, you’re usually writing this statement for one of two reasons:

• You’re writing an appeal letter , to request additional financial aid, after your original financial aid offer wasn’t enough. In this case, you’ll want to make sure you’re being extra specific about your finances.
• You’re applying for a specific endowed scholarship that considers financial need. In this case, your financial need essay can be quite similar to what we’ve outlined above.

Now that you’ve written a killer financial need scholarship essay, you have one of the most common scholarship essays ready on hand, to submit to other scholarships too.

You can sign up for a free Going Merry account today to get a personalized list of hundreds of scholarships matched to your profile. You can even save essays (like this one!) to reuse in more than one application.  

You might also be interested in these other blog posts related to essay writing:

• What’s the right scholarship essay format and structure?
• How to write a winning scholarship essay about your academic goals
• How to write an awesome essay about your career goals
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Financial Need Scholarship Essay Examples (2023)

Jennifer Finetti Oct 2, 2022

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Many scholarships are awarded based on financial need. In order to win these scholarships, you must explain the nature of your financial need. In the guide below, we’ll explain how to write these types of essays to increase your chances of winning. Check out these scholarship essay examples for financial need scholarships.

How to write financial need scholarship essays

Here are some tips for writing financial need scholarship essays:

• Maintain a positive tone throughout the essay . You do not want to come across as self-pitying. Focus on ways you learned and grew from past experiences – how they made you stronger.
• Do not diminish other people’s suffering. This is a competition, but that doesn’t mean you should belittle your competitors. In fact, it would be better to say “I know there are many worthy candidates for this scholarship, but…” than to say “I have suffered far more than…” Show respect in everything you write.
• Frame your essay around a specific event. You may add other details if you have space to, but use one experience as the thesis for your essay.
• Avoid controversial statements and opinions. When discussing events from your past, do not belittle someone else or talk negatively about a group of people. You never know who will be reading your essay.
• Tell your story with honesty. Do not fabricate any details to make yourself sound needy. Your past and present circumstances will speak for themselves.
• Don’t try to sound philosophical. Some students will do this because they think it makes them seem smarter, but it rarely has that effect. Focus on proofreading and writing solid content. That is enough intelligence on its own.
• Discuss your career goals, if possible. You may not have room for this if the essay is short. If you do have room though, discussing your career goals will indicate a plan for the future. Review boards reward determination.

You know why you need financial aid. Tap into the key elements of your circumstances and use them to craft the perfect essay.

Many scholarships are awarded based on financial need. In order to win these scholarships, you must explain the nature of your financial need. In the guide below, we’ve provided examples of scholarship essays for financial need scholarships, along with some tips to help you write your own essay.

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Example 1: “Provide a statement of financial need”

Some scholarships will simply ask for a statement of financial need. There are no parameters to follow. You’re left to write whatever you want. Typically, a statement of financial need is two or three small paragraphs. This will come out to roughly 150-200 words, but it could be slightly longer. Think of this as a cover letter for your scholarship application, highlighting the key elements of your financial need. Don’t build up to the thesis. Get directly to the point.

I am the first person in my family to graduate high school, and thus the first to attend college. Both of my parents dropped out of school when they were teenagers. Because of their limited education, they have always worked in entry-level positions, earning barely enough to put food on the table. My first job I got was at the age of 12 delivering papers, and I have worked hard ever since to relieve pressure from my family. I enrolled in Mississippi’s HELP program during my senior year, which covers tuition and fees at select colleges in the state. I also have a Federal Pell Grant to cover my housing. However, I still need funding for books, supplies, and transportation to campus as needed. I am an engineering student, and our classes come with high fees. My parents cannot contribute to my college expenses, and I cannot work much while I’m in school. This scholarship would help me avoid costly student loans that could take years to repay.  

Example 2: “Describe your financial need in 100 words”

This essay is even shorter than the financial need statement. It may be one of several short answer questions you need to fill out. Working with 100 words is tricky. That only leaves room for about 7-10 sentences, depending on length. Make compelling statements using the fewest words possible.

Also note that grammar errors and misspellings will be much more noticeable in this short essay. Carefully proofread your writing before submitting the scholarship application.

I got pregnant and dropped out of high school when I was 15. By the age of 20, I had two more children, and we all shared a one-bedroom apartment. I worked three jobs to pay the bills, but I never earned much. When my oldest started high school, I did the same. I got my GED at 29 and enrolled in nursing school. My financial status has improved now with a GED, but I’m still a single mom with three kids. I want to become a registered nurse to give my children a stable future. I appreciate your consideration.

Word Count: 100

Example 3: “Explain your financial need in 500 or more words”

This scholarship essay prompt is the opposite of the one above. You have much more room to discuss your circumstances. Talk about your family life, your income, and other restraints that contribute to your financial aid . Try not to throw too much in the essay though. You want the information to flow together seamlessly. Edit carefully, and give the readers a full view of your situation.

My name is Brandon Noviello. I am a sophomore on track to earn my Bachelor of Arts in Sociology. I need financial aid because I do not have a family to contribute to my education. I was in foster care for two years before I aged out of the system, and now I am pursuing a degree completely on my own. I was raised by a wonderful woman who didn’t always have a wonderful life. My mother got pregnant after a sexual assault, but she was determined to raise a smart, successful man. She went through an accelerated program to graduate high school before I was born. She devoted the rest of her life to supporting me, both financially and emotionally. My mother’s family cut ties with her the moment she became pregnant. Life wasn’t easy for us, but I never wanted for anything. She always found a way to keep me fed, dressed, and in school. Unfortunately, she lost a long-term battle with depression when I was 16, and I was put into the foster system until I reached adulthood. I did not have a positive experience with foster care, but I admit, I had no desire to. My mother’s passing weighed heavily on my mind, and I felt an overwhelming sense of anger, regret, and frustration. There was one gleam of hope in my experience though. I had a great social worker. I fought her decisions every step of the way, and she still managed to find a family to get me through high school. My social worker was the only person I invited to my graduation ceremony.  She helped me realize how much one person’s efforts can make a difference in the lives of others. I was only one of countless children she had helped over the years. I researched how to become a social worker so I could help other children like me. My plan is to work with the Department of Human Services in the foster care and adoption division after I graduate. In order to make my dreams a reality, I need financial aid. I am working as a server to pay for food, utilities, and basic necessities, but I do not earn enough to pay for college as well. I go to school during the day and work at night. Furthermore, I have a maximum Pell Grant to cover most of my tuition, but I still need help with other expenses. I did not do well in high school as a result of my mom’s passing, but I have done well in college. I have a 3.25 cumulative GPA, and I have never made less than an A in a degree-related course. As such, I am committed to being successful despite my circumstances, and I want to help young people find that motivation within themselves. I look forward to working with children and teens in the foster system, so I can be the hope that someone else was for me.

Word Count: 498

YOU SHOULD ALSO READ

How to Write a Great 250-Word Essay

How to Write a Great 500 Word Essay

How to Write a Scholarship Essay Introduction (With Example)

How to End a Scholarship Essay

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• Scholarship Essay

Jennifer Finetti

As a parent who recently helped her own kids embark on their college journeys, Jennifer approaches the transition from high school to college from a unique perspective. She truly enjoys engaging with students – helping them to build the confidence, knowledge, and insight needed to pursue their educational and career goals, while also empowering them with the strategies and skills needed to access scholarships and financial aid that can help limit college costs. She understands the importance of ensuring access to the edtech tools and resources that can make this process easier and more equitable - this drive to support underserved populations is what drew her to ScholarshipOwl. Jennifer has coached students from around the world, as well as in-person with local students in her own community. Her areas of focus include career exploration, major selection, college search and selection, college application assistance, financial aid and scholarship consultation, essay review and feedback, and more. She works with students who are at the top of their class, as well as those who are struggling. She firmly believes that all students, regardless of their circumstances, can succeed if they stay focused and work hard in school. Jennifer earned her MA in Counseling Psychology from National University, and her BA in Psychology from University of California, Santa Cruz.

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Portfolio Budget Statements 2024–25

Portfolio Budget Statements 2024–25 3.67 MB

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The purpose of the 2024–25 Portfolio Budget Statements (PBS) is to inform senators and members of parliament of the proposed allocation of resources to government outcomes by entities within the portfolio.

Entities receive resources from the annual appropriations Acts, special appropriations (including standing appropriations and special accounts), and revenue from other sources.

A key role of the PBS is to facilitate the understanding of proposed annual appropriations in Appropriation Bills (No. 1 and No. 2) 2024–25 (or Appropriation (Parliamentary Departments) Bill (No. 1) 2024–25 for the parliamentary departments).

In this sense, the PBS are Budget‑related papers and are declared by the Appropriation Acts to be ‘relevant documents’ to the interpretation of the Acts according to section 15AB of the Acts Interpretation Act 1901 .

The PBS provide information, explanation and justification to enable parliament to understand the purpose of each outcome proposed in the bills.

As required under section 12 of the Charter of Budget Honesty Act 1998 , only entities within the general government sector are included as part of the Commonwealth general government sector fiscal estimates and produce PBS where they receive funding (either directly or via portfolio departments) through the annual appropriation Acts.

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Business process delegation updates for finance and human resources.

Beginning on Friday, May 24 , delegation will be enabled on several Workday business processes. Prior to this change, delegation was only enabled on time tracking and financial business processes.  These changes will make the functionality available to human resources business processes. 

  If you have a step in the process, you will be able to use the "Request Delegation" task to temporarily delegate your work to an appropriate individual because you will be out of the office or otherwise unavailable to complete or approve transactions in Workday. Delegation will be available for the business processes listed below.

• Add Additional Job  
• Assign Costing Allocation (Cost Center Manager was added with the position control project)   
• Change Job  
• Change Organization Assignments for Worker  
• Create Payroll Accounting Adjustments  
• Edit Position 
• Edit Position Restrictions  
• Job Requisition  
• Period Activity Pay  
• Request Compensation Change   
• Request One-Time Payment 

This expanded functionality offers the benefits of (1) a formalized process for assigning work to appropriate and responsible parties when planning time away and (2) assurance that your time-sensitive tasks have been appropriately delegated and can be managed in your absence, thereby providing peace of mind while away.

  Delegation requests should be for 30 days or less unless there are extenuating circumstances (e.g., employee on a leave of absence) that may require up to 180 days of delegation. Refer to the  delegation job aid  in the Administrative Resource Center for more information. Additionally, an enhancement was made to include the worker job profile on the "Delegations History - OSU" (Tableau Report). Please make sure to monitor the report monthly to ensure delegations are appropriate.  

What are paper bank statement fees?

• Cost of paper statements

Avoiding paper statement fees

Benefits of electronic statements, paper bank statement fees: what you need to know.

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• Many banks charge you a few dollars per month for mailing paper bank statements to your home.
• You can avoid paper statement fees by opting for paperless statements online.
• If you don't like banking online, paper statements could be worth the cost.

A bank statement is a document that shows your account activity. One statement shows the activity over a "statement period," which is typically one month.

Banks are required to provide bank statements to customers for checking and savings accounts for any period in which an electronic funds transfer was made. So if you swiped your debit card, made an ATM withdrawal, or paid a bill from your account, you should receive a statement.

For many years, banks would print and mail monthly bank statements to every customer.

In an effort to reduce costs and paper waste, many financial institutions have stopped sending paper statements in favor of electronic statements — or else charging customers a small fee if they still want to receive a physical copy each month.

How much are paper statement fees?

Paper statement fees range from $0 to $5 at most financial institutions, though some will waive the fee if a customer meets certain qualifications.

Here are the paper statement fees at banks with the most branches around the U.S., as well as online banks:

*At these banks, the paper statement fee may vary depending on which checking account you open.

Depending on the bank, you may automatically be enrolled in e-statements but not paper statements or vice-versa.

Speak with a customer service representative or check your online account settings to make sure you aren't paying for paper statements if you don't want to receive them.

With e-statements, otherwise known as paperless statements, you see your transaction history on the bank's website or mobile app. There should be a menu option specifically for statements where you can sort by month.

Most banks charge a few dollars per month for paper statements, so opting for paperless statements eliminates this fee.

It's also better for the environment to receive your monthly statement electronically because the bank won't have to print and mail the paper to your home.

Some banks may also offer benefits when you opt for paperless statements. For example, a bank may waive your monthly maintenance fee or offer a cash sign-up bonus.

Paper statement fee FAQs

It depends on the bank. Some will waive the fee for customers who meet certain qualifications, such as age or minimum balance requirements, but it's not common.

E-statements are better for the environment, more cost-effective for financial institutions, and can offer better protection against identity theft .

Use unique passwords for all of your accounts, enable two-factor authentication where available, and avoid downloading your e-statements on a public computer.

If you'd rather receive paper statements, ask your bank if there's a way to reduce your banking fee for paper statements. Alternatively, consider printing your e-statements and keeping a file of them at home.

Banks may charge anywhere from $0 to $5 for paper bank statements.

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Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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