Question

what are the key differences in cash flow analyses performed by investor owned and not for profit businesses?

Answer 1

Financial reports are annual documents compiled by the accounting department to share the financial standing and worth of a given company. Both for-profit(investor owned) and nonprofit organizations create these financial reports to share their financial standings. However, these reports differ slightly in content and approach, as for-profits often focus the report on generating more profits while nonprofits focus on the programs, research and services provided by the organization.

Letter vs. Accomplishments

For-profit annual reports often start with a letter from the business owner or CEO. This letter focuses on the company’s previous financial year and addresses any publicly known hardships the company has overcome. Nonprofit annual reports start out by reminding the reader of the organization’s purpose and statistics about how many people have benefited from the research, programs and services.

Budgets and Cash Flow

The main purpose of the annual report is to share the general cash flow of the organization, whether for-profit or nonprofit. For-profit organizations often show how well they manage their money, both incoming and outgoing, to impress potential investors. Nonprofit organizations often focus on how little they require to operate and how much funding they put into their programs and services to help improve the community and provide support for those in need.

Goals and Objectives

Another part of the annual report is sharing the common goals and objectives of the organizations. Nonprofit organizations often have the goals of offering extensive services to people in need, while for-profit organizations have several objectives, provide high-quality products, have a high net worth and attract potential investors.

Financial Predictions

Organizations and companies often end annual reports by reminding the reader of the good things they plan to present to the public or customers in the upcoming fiscal year. For-profit organizations will share information, such as new product launches and services, that all have the goal of generating more profit for the business. Nonprofit organizations will end the report by sharing what services or programs have been the most successful and how they plan on developing these to serve more people on a larger scale.