Question

Executive Summary of Impacts of Engineering Decisions on Financial Statements

Answer 1

Engineering decisions on the financial statement are very important in today's workplace. Every action or decision of the engineering department is based on the organization's financial statements. A good engineer can always handle tactfully both the financial position and technological opportunities of the organization. Usually, there are three types of financial statements are available, the balance sheet, the cash- flow statement, and the income statement.

1. The balance sheet

The information in the balance sheet gives the actual financial position of the companies. It contains assets, liabilities

and net worth of the company. Based on this balance sheet companies can make it engineering decisions like which project will be financially viable and which project has to give more priorities based on quick financial return.

2. Cash - flow statement

The cash - flow statement of the companies tells the real financial position of the companies and it's capacities to pay bills and abilities to maintain operations. If a particular company has no healthy cash - flow it will negatively affect its engineering operations.

3. Income statements

The income statement gives an idea about the future growth and profitabilities of the company. Based on this income statement companies can plan its operations.