Die belangrikheid en betekenis van die analise en interpretasie van finansiele jaarstate en inligting vir kleinsakeondernemers

Abstract

During the past fifteen years the important role that the small business can play in a free South African economy has been increasingly recognized by both the government and the private sector. It is realised that small business play an irrefutable economic and social role in the economy of a country. Small businesses in general suffer from a lack of the necessary management expertise and this realisation has led to the establishment of various institutions whose aim is to provide assistance to the small business sector. One of the problem areas identified by the author as a resul~ of his experience as a small business consultant, is that annual financial statements are not correctly applied and utilised as a source of management information. This motivated the study aimed at increasing the use of and improving the quality of information obtained from this . valuable source. After a brief overview of the problems experienced by a small business, the information function of financial statements, especially for the small business manager, is considered in the opening chapter. This is followed by an investigation into the use of a balance sheet, income statement and funds statement in chapters two to four. Specific attention is given to available information as well as additional information required for meaningful evaluation. Ratios that can be used by small business management are highlighted. Special attention is also given to the cash flow statement as alternative source of management information. Chapter five entails a case study in which the financial statements of a small business are analysed and a ratio analysis conducted. Derivations concerning the specific business are made in respect of the balance sheet, income statement and cash flow statement. A summary, including a number of conclusions and suggestions, is presented in chapter six.