Business
Companies are organizations or institutions dedicated to offering a product or service to satisfy the demand and wishes of customers. It requires a reason for being, a mission, a strategy, goals, objectives, tactics, and action policies or procedures.
In order for a person or a group of people to want to create a company to satisfy a certain demand, it is necessary to have a prior vision of a strategic formulation and development of the company, in addition to identifying the activity that the company wishes to carry out or dedicate (business line), for which you must start by carrying out a good mission and vision.
Types of companies
Companies can be classified depending on the line of business or activity they carry out, which are divided:
- IndustrialCommercialService
In this opportunity we will dedicate ourselves to analyze in more detail the service companies and the marketing companies.
Industrial companies are those that have an essential activity that is the production of goods or products, through the extraction and transformation of raw materials to have the desired product.
As for commercial companies, they are those that carry out their own act of trade, that is, they acquire goods or merchandise (finished products) for their subsequent sale, in which two intermediaries who are the producer and the consumer interfere, some marketing companies Mentioned below.
- Sale of footwear companies Companies that sell land, navigable and air transport Sales of cosmetics (perfumes, deodorants, paints, among others) The sale of household appliances, such as refrigerators, blenders, washing machines, modulators, among others. They sell telecommunication products. (televisions, cell phones, computers, etc.) Among other commercial companies.
The commercial companies are classified in turn into wholesalers, retailers and commission agents.
The wholesalers, this type of companies acquire goods, merchandise or products in large quantities to distribute them among the retail companies, also to other wholesalers but on a large scale.
Retail companies are those that sell their products on a smaller scale than wholesalers, usually to the end consumer of the product.
Finally the commission agents who are in charge of selling the products that are not yours in exchange for a commission.
Those of services as its name says are characterized by the sale of services, either professional or of any other type. Some service companies may be:
- Financial services companies such as banks, finance companies, pawn shops or exchange among others. Companies that are dedicated to the sale of life, vehicle and damage insurance to third parties. Medical service companies that are dedicated to the rental of apartments, hotels, past. Rent of land, navigable and air transport. Services to the community such as water, electricity and gas. Communications companies, such as the internet, cable television and telephone network.
Services have three characteristics
1. They are intangible: they cannot be touched
2. They are heterogeneous: because they are different depending on people's demand
3. They expire: they have a permanence in time and must be used when they are in use.
financial statements
Accounting is a discipline with norms, principles and standardized procedures, subject to laws that guide us how to order, analyze and record the operations or transactions carried out by the company, facilitating the power to prepare the financial statements.
The financial statements are the documents that the company must prepare at the end of the accounting year, in order to know the financial situation and the economic results obtained in the activities of a company over a period, it will also show us in a scientific way, how business is going, in addition to providing us with information to project ourselves into the future.
The financial statements are:
- The balance sheet The income statement The statement of changes in equity The statement of changes in financial position It is a statement of cash flows.
The two most important of the aforementioned statements will be analyzed are the balance sheet or statement of financial position and the statement of income or statement of profit and loss.
Statement of income
The income statement is a supplementary document that provides detailed and orderly information on how the profit or loss for the accounting year was obtained.
The main objectives of the income statement is to evaluate the profitability of companies, that is, their ability to generate profits, since you must optimize their resources so that at the end of a period they get more than they invested.
Income statement in a commercial company
The income statement in a commercial company can be analyzed as follows. The cost is the value of purchases of merchandise that will be sold at any given time. The Expenses will correspond to the necessary expenses for the normal operation of the business.
It will be possible to observe the income derived from the sales achieved by the company and the costs and expenses that were required to generate the income. The difference between these items (Sales revenue less costs and expenses) will determine the profit or loss for the year.
Now, depending on the type of administration that is made of the inventory, the elaboration of the Income Statement will change a little.
Below you can see a general structure of what an income statement of a commercial company would look like:
commercial enterprise
Name of the company
Statement of income
Period comprising
Net sales
Initial inventory
+ shopping
= available merchandise
- Sales cost
= Gross profit
- Operating costs
= Operating profit
+ - Comprehensive financing cost
+ - Other income and other expenses
= Income before taxes
- ISR and PTU
= Net income
Income statement in a service company
In service companies, the income statements are less laborious than a commercial or industrial company because no goods or merchandise are delivered, you will receive money for the activity carried out (such as insurance sales, vehicle rental, among others.) The cost will be represented by the expenditures that were necessary for the provision of the service. From the above, some companies consider any investment that is used for the proper functioning of the company as expenses.
Below you can see a general structure of what an income statement of a service company would look like.
Service company
Name of the company
Statement of income
Period comprising
Service revenues
- Operating costs
= Gross profit
- Operating costs
= Operating profit
+ - Comprehensive financing cost
+ - Other income and other expenses
= Income before taxes
- ISR and PTU
= Net income
As can be seen in the income statement, purchasing costs are not used because it is a service offered and neither is inventory management.
Differences in the income statements between service and commercial companies.
As can be seen in the structures of the aforementioned statements of income of commercial companies with respect to assets and current liabilities, they use merchandise purchases and inventory management. Below is a table where you can see the differences between commercial and service companies in the income statements.
| Service companies | Trading companies |
| Ø Income from services | Ø Sales |
| Ø Has no inventories | Ø Inventory management = merchandise that the company has. |
| Ø No purchase costs | Ø Cost = investment of merchandise purchases. |
| Ø Operating expense = investment necessary for the proper functioning of the company. | Ø Operating expense = investment necessary for the proper functioning of the company. |
Therefore commercial companies need more work and control as well as more investment compared to service companies.
Balance sheet
The balance sheet is an accounting document that shows the financial situation of a business at a certain date that also reflects all the resources that the company owns or controls, the debts it maintains and the owners' interest in it.
The differences that exist in the balance sheets of the service companies and the marketing companies is that one does not manage warehouses and suppliers, as can be seen below.
Balance sheet
conclusion
Financial statements are very necessary for decision-making by organizations outside the company and for management itself, since without them the position or financial situation of the company would not be known.
After investigating the difference that exists between service and commercial companies, I could mention that in a service company there is no investment on purchases because this is only used by commercial companies, and there is also a higher percentage of profits.
Of the previous thing it does not mean that it would have a greater wealth with companies of service in comparison with those of commerce, this depends on the demand.
