Question

Discuss how you might expect the financial statements reported by a high tech company to differ from that reported by a financial firm. You should make sure to carefully consider differences in assets and liabilities.

Answer 1

The report presented by the high tech company differs from that of financial firm as detailed below:

1) The revenues of the tech company is through the sale of tangible goods whereas of financial firm through the loan assistance sanctioned and disbursed.

2) The direct expenses of tech company are the COGS whereas for financial firm it is the interest and financial charges paid towards finances/deposits taken up.

3) The Balance Sheet's current assets like inventories and accounts receivables are the important part of the current assets of the tech company whereas the financial firm do not posses these but have outstanding finances in the accounts of clients.

4) The balance sheet’s current liabilities like accounts payable and creditors are the part of tech company’s report whereas these doesnot exists in financial firm’s balance sheet as they have to give net loans and advances due to the clients.

5) The assets of the tech company are subject to depreciation whereas as assets of financial company are not depreciate.

6) The reports of the tech company is based on companies act rules and regulations whereas financial firm’s report is based on Banking act rules and regulations.