Manufacturing Heart

                                                               Manufacturing Heart

                          Finance plays a key role in the manufacturing industry throughout the process like research and development, purchasing machinery or assets, and maintenance. Finance is the management of cash flow, while accounting is the maintaining, recording, and reporting financial reports. The accounting team is responsible for ensuring that the account balance shown in the balance sheet is accurate and providing financial reports.

                 The company has to understand the process of the manufacturing product, profit margin, cost of goods manufactured and profit earned in the past year, also understand the market size and product uniqueness compared to competitors, get the knowledge of debt-equity ratio and analyze compliance report of the company.

                Manufacturing industry to produce the product, the company has to invest the high cost of goods sold and overhead costs like labor, material, assets, and shipping because this industry has to focus on two metrics are gross margin and operating margin.

              Gross margin is a percentage calculated by dividing gross profit by sales. By this company will know how efficient company business is converting products into revenue. Operating margin is the percentage of sales a company retains after subtracting all its operating costs. It's based on operating profit, which is your gross profit minus your selling, general and administrative expenses.

      The financial statements are accounting reports which provide all the financial information like Income statements, Balance sheets, Cash flow statements, Notes to financial statements, and statements of change in equity.

Income Statement: - An income statement is the financial statement of the company that provides the financial information of the company for a specified period. The information in the income statement includes the revenues, expenses, and the profit or loss of the company. The income statement helps the financial statement users measure the company's financial performance for a specified period.

Balance Sheet: - The balance sheet is the statement of the company's financial position, information under the balance sheet includes assets, liabilities, and equity of the company at the end of one financial year. This financial statement of the company shows the net worth and it can be calculated by subtracting liabilities from total assets.

Statement of Changes in Equity: - Statement of changes in equity that shows the contribution made by the shareholders and the change in equity. The statement of change includes classification of share capital, Total share capital, retained earnings, and Dividends paid.

Cash Flow Statement: - The cash flow statement is the movement of cash inflows and outflows of the company during the period. The cash flow statement is the cash flow from operating operations, cash flow from investment activities, and cash flow from funding activities.

Notes to Financial Statements: - The notes financial statement is disclosing all information related to financial statements.

Example : X company financial statement below

Income Statement
For the Year Ended December 31, 2020
Revenue		$40,000
Operating expenses		($18,000)
Net income		$22,000
Balance Sheet
As of December 31, 2020
Assets
Cash	$18,000
Accounts Receivable	$17,000
Total Assets	$35,000
Liabilities
Accounts Payable		$3,000
Stockholder's Equity
Common Stock	$10,000
Retained Earnings	$22,000
Total Stockholder's Equity		$32,000
Total Liabilities and Stockholder's Equity		$35,000
Statement of Cash Flows
For the Year Ended December 31, 2020
Cash Flows from Operating Activities :
Cash received from customers	$23,000
Cash paid for expenses	($15,000)
Net cash flows from operating activities		$8,000
Cash flows from Investing activities		$0
Cash flows from financing activities:
Issuance of common stock	$10,000
Net Increase (decrease) in cash		$18,000
Plus : beginning cash balance, January 1, 2012		$0
Cash balance, December 31, 2012		$18,000