How Can Auditing Companies Help You In Liquidating A Company?
So, you want to know how can BSA Auditing & Consultancy help you in liquidating a company in UAE? Before we answer that question, let us try to understand why companies are liquidated in the first place. For any business entity, no matter what its size is or how big is its name, there is always the potential that its market share may be lost. This is because of a number of reasons which will be discussed later on in this article.
Age Of The Company
One of these reasons pertains to the age of the company. A company that has been around for a considerable length of time is more likely to be successful compared to newer companies that have just started their operations. It is also true that older companies have larger fixed assets as compared to newer ones. Another reason is the company’s market share. If the market share of the company is more than a particular rival company, then the company is considered to be overvalued hence the process of liquidation.
Evaluate The Number Of Assets
Another factor that should be kept in mind is the size of the assets of a company. The more assets a company has, the more auditing firms can be hired to carry out the audit plan and work on it. The value of the assets should be compared to the total revenues of the company. A smaller firm would be able to perform the auditing faster and easier than a larger one.
Market Capitalization Plays A Vital Role
The market share of a company refers to the percentage of total market share that a particular firm has. It is calculated by adding the market capitalization of the company to the current market cap. Therefore, it is advisable to take note of the market cap and market capitalization before making an investment decision. In the case of the merger or acquisition of a firm, the market cap or worth of the acquired firm is used for calculating the retained earnings of the acquiring firm. Hence, an increase in the market cap can result in a higher retained earnings percentage for the acquiring company.
Liquidity Status Of The Business
An important aspect of the financial statements is the cash flow analysis. Cash flow analysis helps in evaluating the liquidity position of a company. A company’s cash flow is calculated by looking at its operating expenses, its retained earnings and the gross profits. All these factors are then summed to come up with the liquidity index which indicates the liquidity status of the company.
Management Decisions Regarding The Financial Statements
Management analysis is one of the key aspects of financial statements. This is the stage where all the heads of the different departments meet together to find out the performance of the company. Auditing companies are useful for providing management staff members with tips and information regarding the financial statements. This helps in improving the performance of the company which in turn leads to better results for the company as a whole.
The Importance Of Income Statement
The last part of the financial statement is the income statement. This section lists out the income and other receivable and non-receivable assets of the company. All the assets and liabilities are stated in the right format according to the scale specified in the balance sheet. How can auditing companies help you in liquidating a company in a short span of time?
These are the key details included in the financial statements. This will help you analyze and understand the financial situation of the company. Moreover, it will help you decide on what actions you need to take in order to make your company survive in the long run. Liquidation is a difficult process, but you can achieve a quick and effective solution if you have a well-structured plan. This is how BSA Auditing & Consultancy can help you in liquidating a company in a short span of time. We are a prominent and well-known audit firm in UAE. Our experts will help you understand the ins and out of business laws.
