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When is one classed as profitable? |
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#26 |
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Join Date: Aug 2006
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Hello...when was the last time you worked?
Time cost employees will always ALWAYS make a profit, net maybe a different question, and where do HMRC enter into this question |
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#27 |
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Join Date: Apr 2005
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On a balance sheet employees come under Liabilities: Wages payable etc
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#28 |
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Employees don't go on a balance sheet. They aren't an asset of the business as the business doesn't own them. The only very rare exception is when sportspeople are "bought" and their contract can go on the balance sheet and is amortised over the contract duration.
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#29 |
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Join Date: Oct 2006
Location: Brighton, UK
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Total of Assets should equal Total of liabilities,
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Where are you putting employees on that side of the equation?
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#30 |
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Nonsense. The difference between those figures constitutes the shareholders' funds which are essentially the retained profits or losses plus the share capital.
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#31 |
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Nonsense. The difference between those figures constitutes the shareholders' funds which are essentially the retained profits or losses plus the share capital.
Employees aren't generally treated as tangible or intangible assets on a balance sheet. I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan
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#32 |
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Join Date: Apr 2005
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why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan
![]() "My heads spinning so will reread your reply a few times until something clicks." |
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#33 |
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Join Date: Apr 2011
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and back to the original post.
I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan ![]() Its like the buildings worth 50 million but Darren the guy who empties the bins isn't worth a mention on the company accounts as he only earns 10k a year and thus gets merged into the "salaries" section. |
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#34 |
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Join Date: Aug 2006
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and back to the original post.
I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan ![]() |
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#35 |
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I tired to explain it before. The company doesn't own its employees so they can't be an asset. You could have a fantastic employee who contributes massively but you can't stop then walking out the door and never returning, therefore they can't be classed as a financial asset of the company. Some sportspeople's contracts can be capitalised as an asset as there is value in the contract that can be sold but this is a very rare exception.
Plumers Inc own a van, a bag of spanners and have one employee. The van is worth £3000, the bag of spanners £500 and the employee nothing. Ergo the value of the entity is £3500. But Plumers Inc is actually turning over £80,000 a year, how can that be? the income is derived from an asset that on your books dosent exist, so what is the value of Plumers Inc? Would you sell me Plumers Inc for £3500? |
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#36 |
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Join Date: Nov 2002
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I do hear and understand what you are saying but....lets take an example
Plumers Inc own a van, a bag of spanners and have one employee. The van is worth £3000, the bag of spanners £500 and the employee nothing. Ergo the value of the entity is £3500. But Plumers Inc is actually turning over £80,000 a year, how can that be? the income is derived from an asset that on your books dosent exist, so what is the value of Plumers Inc? Would you sell me Plumers Inc for £3500? |
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#37 |
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Join Date: Jun 2007
Location: The sane side of the pond
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Do the course asap, in business you need to know the difference between gross and net profit....you also need to appreciate what you your balance sheet is and what your p&l account means.
Historical reference which will prove invaluable......look at the Polly Peck accounts for the 3 years prior to dissolution |
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#38 |
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Join Date: Apr 2005
Location: colchester
Posts: 15,350
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I do hear and understand what you are saying but....lets take an example
Plumers Inc own a van, a bag of spanners and have one employee. The van is worth £3000, the bag of spanners £500 and the employee nothing. Ergo the value of the entity is £3500. But Plumers Inc is actually turning over £80,000 a year, how can that be? the income is derived from an asset that on your books dosent exist, so what is the value of Plumers Inc? Would you sell me Plumers Inc for £3500? |
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#39 |
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Join Date: Nov 2002
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You should start your own thread and not hijack the OPs.
the topic is opening out a bit which is fair enough poor old Eagle seems to be getting a lot of stick lately !...............
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#40 |
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Join Date: May 2012
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oh please please tell any employer that...and then run very quickly
Employees don't have a value for accountancy purposes. End of. |
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#41 |
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Join Date: May 2012
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and back to the original post.
I despair again, having worked in the finance/hr industry for as long as my hemorrhoids can remember...why is it that the most important aspect of any company is ignored on the balance sheet...no wonder UK plc is going down the pan ![]() |
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