Touching these times of the year (December), we systematically began to elaborate internally a General Balance of what happened to us month by month passing the calendar, of what we achieved, of personal and organizational victories and defeats, of the goals achieved, of the earrings, etc. etc..
In accounting matters there are several States, the rest is to suppose the exact concomitance between all of them. The Financial Statements provide us with information on the basis of which we will decide in the next “Decision Making”, in the same way they are relevant for providing the Universe of Economic Actors with the reality of the organization.
The spirit of these lines is not to go into the study of the Financial Statements, but to extrapolate points of Business Science towards some stages of our daily and organizational life, this is substantial since we will take in person and organizationally some issues to think and rethink them.
Throughout my working life, I have had to render different management results, generally the presentation of this data is done in a power point or report in a file. I can assure you that in ninety-nine percent (99%) of the cases, my superiors took me directly to the Income Statement. I would say that it is the State of Truth par excellence, at least for the men of Operations, since there the number is what is seen and there is nothing else "to invent".
Referencing some lines
The first line of the Income Statement (relating Accounting and Life) is "How Much We Sold, We Built, We Developed" and "At What Price We Enter It". Let's be cautious with this line, it is a “Gross” sample, then we must see “discounts and transfers made” in order to achieve those initial income.
Costs, Expenses: although conceptually they are not the same, both the Costs and Expenses detract positively from our "State of Life", I affirm with all certainty that Life is an "Industry that requires high levels of Reinvestment", with which I suggest never failing to keep in mind the “Level of Reserves and Liquidity” of each one of us, the “Netting” of what has been achieved vs. what it cost us is transcendental.
EBITDA: this acronym in English is "Earnings Before Interest, Taxes, Depreciation, and Amortization", it is the Earning before interest, taxes, depreciation and amortization, in Creole we can say "It is the Operating Result before the impact of the mentioned, remember for example, amortizations are “Non-financial items”, but they do not fail to reflect the decrease in value of the invested assets.
Bottom Line: it is the last line of the Income Statement, here we have the final value of what was done in the year, the + - real, I think it is the number that we must attend to, since the rest of the lines acted to finally throw as Sum this last line, what will this number say? ….. do we win, close the table or lose? …………
I will mention two (2) variables, related to the Result but not directly to the Accounting:
- The Share of Market is the portion of the Market that the Companies have, this variable is taken by a third party outside the organizations.The Share of Value is the portion of money meaning an absolute value and a percentage over one hundred (100%) that moves that industry.
Let's review in daily life if our "Share of Market" grew or not, that is, if we have met more people, if our relationships improved with others, if we manage to contribute to the growth of our Civil Society, at the same time, we will also consider If our "Share of Value" increased, this gives Value to our actions, it is like preferring Quality over Quantity.
