**Fixing Mistakes in Financial Reporting: A Step-by-Step Guide** Correcting mistakes in financial reports is really important. It helps keep the financial statements accurate and makes sure that people can make smart decisions. Fixing mistakes isn’t just about correcting numbers; it involves a series of steps that promote honesty and accuracy. Let’s break it down simply! **Step 1: Find the Mistake** The first thing you need to do is identify the error. You have to understand what went wrong and how serious the mistake is. Mistakes can be anything from simple math errors to bigger issues, like putting income in the wrong category. Look over all the related documents, like financial statements and earlier records. Ask questions like, “What happened?” and “How did we miss this before?” Finding out why the mistake happened is key to making sure it doesn’t happen again. **Step 2: Check How Big the Mistake Is** Next, you should evaluate how important the mistake is. This means looking at whether the mistake could affect how people make decisions based on those statements. There’s something called a materiality threshold. If the mistake is seen as not very important, fixing it might not require a big process. For example, if a tiny mistake affects earnings by less than 5%, it might not need a formal correction, depending on what stakeholders expect. **Step 3: Decide How to Fix It** Once you know what the error is and how serious it is, the next step is to figure out how to correct it. Depending on whether the mistake is from a past period or just needs a simple correction, this will change how it shows in the financial reports. If the error was from an earlier time, you will need to update those past statements and explain the changes in the notes. Make sure that this explanation is clear to help users understand what went wrong and what it means today. **Step 4: Share the Error and Correction with Stakeholders** It's important to effectively communicate the mistake and how you fixed it to your stakeholders. Transparency is key! Stakeholders need to know what happened, why it happened, and how it could influence their decisions. Companies usually do this through press releases, updated statements sent to regulators, or direct talks with investors. You should also keep detailed documentation that explains the mistake, the steps you took to fix it, and the results of those actions. **Step 5: Record the Fix in the Accounting System** Next, you’ll need to make adjustments in your accounting system to show the correct numbers. If the mistake is significant, you might have to reverse the original entries and create new ones. It’s important to keep clear records, so that future audits can easily trace these changes back to where they started. **Step 6: Review Internal Controls** At this point, it’s crucial to look over the internal controls that didn’t stop the mistake from happening. Ask questions like, “Was this a simple human error, or is there a bigger problem in our system?” You might need to create stronger procedures or provide extra training for the accounting team. Involving senior management can help ensure that the current policies match the best practices for financial reporting. **Step 7: Monitor Going Forward** Finally, don’t forget to keep an eye on things after the correction is made. Regularly review the updated financial reports to ensure they meet accounting standards and the new internal policies. Conducting ongoing reconciliations helps catch any future mistakes. **In Summary** Fixing mistakes in financial reporting requires a detailed approach. This means identifying the error, checking its impact, deciding how to fix it, sharing the information, recording changes, reviewing controls, and ongoing monitoring. Each step helps to ensure that financial statements are accurate. Mistakes can happen, but how an organization handles them shows its commitment to accountability and transparency.
Dividends are important in how companies handle their profits and report to their shareholders. They are a clear way for companies to share their earnings with the people who own their stock. By learning about dividends, investors can better understand how well a company is doing financially and how much it cares about its shareholders. Let’s explore dividends more closely. ### What Are Dividends? Dividends are payments made by a company to its shareholders. Think of it as a way for the company to share the money it makes. Dividends can come in different forms, like cash payments, stock, or even property. Usually, when people talk about dividends, they mean cash payments. For example, if a company says it will pay a dividend of $1 for each share, and you own 100 shares, you would receive $100. ### How Dividends Affect Stockholders' Equity When we talk about stockholders' equity, dividends impact something called retained earnings. Retained earnings are the profits that a company keeps to invest in itself instead of handing out to shareholders. **Example of Declaring a Dividend:** Imagine Company XYZ has retained earnings of $1,000,000. If the company's board decides to pay a cash dividend of $2 for each share and there are 200,000 shares, the total amount paid out would be: $$ Total\ Dividend\ Payout = Shares\ Outstanding \times Dividend\ per\ Share = 200,000 \times 2 = 400,000 $$ After this payment, the retained earnings would go down: $$ New\ Retained\ Earnings = Old\ Retained\ Earnings - Total\ Dividend\ Payout = 1,000,000 - 400,000 = 600,000 $$ This shows that when dividends are paid, retained earnings decrease, which affects stockholders' equity. ### Reporting Dividends When a company declares dividends, it must also include this information in its financial reports, specifically in the statement of stockholders' equity. This statement shows the changes in equity accounts, like issued shares and retained earnings, during a specific time. **Important Dates to Remember:** - **Declaration Date:** This is when the board announces the dividend, creating a promise to pay. - **Record Date:** This is when the company decides which shareholders will get the dividend. - **Payment Date:** This is the day the company actually pays out the dividend to shareholders. ### Why Dividends Matter to Investors For investors, dividends are a key factor in choosing stocks. Many people count on dividends for income, especially when they retire. A steady or increasing dividend can show that a company is stable and making money. **Example of Different Choices:** Think about Company A and Company B. Company A pays a steady dividend of $1 per share, while Company B doesn't pay any dividends but has a rising stock price. An investor who wants regular income might prefer Company A because it pays cash, while someone looking for growth might choose Company B for potential price increases. ### Conclusion In summary, dividends are more than just a reward for shareholders. They play a big role in stockholders' equity accounting and reporting. By affecting retained earnings and appearing in financial statements, dividends provide insights into a company’s health and goals. Understanding dividends can help investors make smarter decisions about where to put their money.
In the world of accounting, knowing how direct and indirect methods affect financial analysis is important, especially when making the statement of cash flows. Both methods aim to show the same money information, but they present it in different ways. This can change how people understand and trust the data. **Direct Method**: This method lists cash money going in and out that is directly related to a business's activities. Here’s how it works: - Cash received from customers - Cash paid to suppliers and employees - Cash paid for other everyday expenses The direct method is clear and gives useful insights. Analysts can easily see which activities bring in cash, making it simpler to look at cash flow patterns. However, preparing this method can be difficult for companies since it needs detailed tracking of all cash transactions. Using the direct method gives a straightforward view of a company’s cash flow. This helps managers and investors see the cash transactions clearly, which is important for their decisions. **Indirect Method**: This method starts with net income and then adjusts it for things that don’t involve cash and changes in working capital. - Start with net income - Adjust for non-cash expenses (like depreciation) - Adjust for changes in working capital (like accounts receivable, inventory, and accounts payable) The indirect method is used more often because it connects net income with cash flow from operating activities. This helps users understand how profit relates to cash coming in. However, it can make things less clear, and the adjustments can be complicated. If users don’t fully understand these adjustments, it might confuse them. **Impact on Analysis**: The method chosen for the statement of cash flows can change financial analysis in big ways: 1. **Clarity vs. Confusion**: The direct method makes things clear, helping analysts focus on activities that generate cash. The indirect method is more common but can add complexity that might confuse people who aren’t familiar with accounting. 2. **Making Choices**: Investors or lenders might like the direct method for its clear input on cash flows, which helps them make better choices. Relying on the indirect method might lead to misunderstandings about how much cash a company actually has. 3. **Comparing Companies**: Different methods can change how financial statements look. Investors need to be careful when comparing companies using different methods since their cash flow numbers might not be exactly alike. Overall, understanding how the direct and indirect methods affect financial analysis in accounting helps everyone read financial health accurately. Both methods have their pros and cons, depending on what the user needs to know in the world of accounting and financial management.
**How Technology is Changing Error Correction in Accounting** Technology is really changing how accountants fix mistakes. It helps them find, report, and correct errors faster and more accurately than ever before. One big change is the use of advanced accounting software. This software helps with entering data and analyzing it, which reduces the chances of making human mistakes. Unlike when accountants worked by hand, this new software uses rules and checks to catch mistakes early. For example, if someone types in a wrong number, like a negative revenue amount, the system will send an alert to check the entry before it goes through. This means mistakes can be fixed right away, which is important for keeping financial reports reliable. Technology also allows for real-time data analysis and cloud systems. This helps accountants keep an eye on financial activities all the time, making it easier to spot unusual or incorrect movements in data. They can use dashboards that show important information instantly, which helps them find and fix errors quickly. Plus, they can check financial data without doing a lot of extra manual work, giving them clearer insights into the accuracy of their records. Digital records have also changed how companies keep track of errors. Instead of using paper, everything is stored electronically. This makes it easier to follow the history of corrections. A strong electronic record system ensures that every change can be traced back, making the correction process more trustworthy. With features that show different versions of data, others can see why changes were made and what led to corrections. Artificial Intelligence (AI) and Machine Learning (ML) in accounting software are also game-changers. These technologies look at past data and learn to spot patterns that signify mistakes. For example, if there’s a typical error, the AI can suggest fixes based on what worked before, saving time for accountants. Let’s look at a real example. Imagine a company finds a mistake in how it reported its revenue from last year. In the past, they would have to manually go through spreadsheets to find the errors. But with today’s technology, they can run an automatic script that quickly finds mistakes across different data points. This not only saves a lot of time but also improves accuracy, so they can make the needed changes to follow the rules of Generally Accepted Accounting Principles (GAAP). In summary, technology has made it much easier to correct mistakes in accounting. It reduces human errors, provides clear views of transactions, and makes reporting smoother. These advancements help accountants meet higher standards for accuracy and compliance. The ability to quickly identify and fix errors shows how accounting is evolving—it focuses more on being clear and responsible, which leads to better financial reporting and management for businesses. Today’s accounting is a great example of how technology can help solve complex problems and keep businesses in line with important accounting rules.
Lease accounting standards have changed a lot in recent years. This change is mainly due to the need for companies to be more open and similar in how they report their finances. New rules, like ASC 842 in the U.S. and IFRS 16 in other countries, have changed how businesses show lease deals in their records. These changes not only affect how companies handle their accounting but also how they make big decisions for their future. The main idea behind these new lease accounting rules is that companies must now show their leased assets and the debts that come with them on their balance sheets. Before, companies could keep operating leases off their official records. This made their financial situation look better than it really was. Now that companies have to show these debts and assets upfront, they face more questions about their financial health, which can influence how they make decisions. One major effect of these rules is on **capital structure decisions**. Companies have to think more carefully about how they finance themselves because lease debts can affect their borrowing ratios. This might change how they use debt versus equity for funding. If companies have more liabilities listed, it may become harder for them to get more money or could lead to higher borrowing costs. This shift can push them to find new ways to finance or change their lease agreements. This is especially important for businesses that need a lot of capital, as this can impact how they are viewed by the market and credit rating agencies. These standards also change how companies manage their resources. They might need to rethink how they handle renting buildings or equipment. For instance, businesses used to prefer operating leases because they kept debts off their books. Now, they might consider buying instead of leasing. This new way of thinking prompts companies to look at the overall costs of owning versus leasing assets, factoring in cash flow, taxes, and the flexibility of owning something outright. Instead of just focusing on short-term cash savings, firms are now also looking at long-term benefits and overall financial health. Moreover, businesses may review their current leases to decide which ones to change or end. Since lease debts affect their important financial measures, companies might choose to consolidate or sublease assets they aren't fully using. This change helps them improve their financial statements and overall financial ratios, making them more flexible and lowering risks during tough economic times. As companies get used to these new standards, they also need to step up their **financial forecasting and planning**. They should use better planning methods that consider the long-term effects of their lease responsibilities on cash flows, taxes, and budgets. Chief Financial Officers (CFOs) and finance teams now have to include lease information in their broader financial plans. They need to think about how the value of lease assets depreciates over time and how this will affect future performance. This deeper analysis helps align the company’s goals with its financial reality, which can help avoid problems in budgeting and planning. At the same time, these lease accounting rules impact **organizational behavior** and how companies are governed. With a push for more transparency and accountability, companies need to strengthen their internal controls related to lease management. This often means investing in technology to track leases appropriately, ensuring they follow the reporting rules and reducing mistakes in financial statements. A culture of responsibility develops as businesses work to prevent errors and keep investors trusting their reports. The effects on investor relations are also significant. Companies now have to deal with more observant investors who understand the impacts of the new lease accounting rules. Investors may focus more on balance sheet ratios and how a company is governed when evaluating performance. Clear communication becomes crucial as companies explain their lease situations and how they affect overall financial stability. How companies tell their story about leases can shape how the market views them, which can impact stock prices and investor trust. Additionally, businesses that manage their lease responsibilities well may attract more investors. Stakeholders tend to favor companies that show good financial habits and risk management skills, especially now that these skills are increasingly evaluated based on how a company handles its leases. Companies planning for **mergers and acquisitions (M&A)** should also think about how lease accounting standards affect their strategies. Recognizing lease liabilities can change how companies are valued in potential deals. Buyers might want to know more about a company’s lease commitments when checking its financial health or deciding how to merge rental assets after a purchase. Likewise, when companies sell non-essential assets, they must carefully analyze lease consequences to ensure everything is correctly reported in their financial documents. In the tech industry, where flexibility is key, companies might focus on leasing options that allow for more adaptability, like short-term leases or partnerships with service providers. This strategic planning helps businesses be more responsive to market changes and take advantage of new technologies without locking themselves into long-term deals that could be heavy on their financial records. Finally, these lease accounting changes have opened discussions around **sustainability** and being responsible corporate citizens. Companies are now more likely to consider the environmental impact of their leased assets, especially as eco-friendliness becomes a key part of business strategy. Firms may look to include sustainable office spaces or facilities that align with changing consumer interests and legal regulations. This approach connects financial choices with ethical responsibilities, strengthening the overall company values. In summary, lease accounting standards mark a big shift in financial reporting, impacting corporate decisions and strategies. From managing capital to improving technology use and investor relations, businesses must adapt to these new rules thoughtfully. As they do, effective lease management and strong financial health will be more important than ever. The effects of navigating these new lease accounting standards extend beyond just accounting. They are now a vital part of making smart business decisions in today’s market. With the right strategies, companies can turn the challenges of these new requirements into opportunities for better efficiency and competitive advantages, setting the stage for sustainable success.
When looking at the differences between current and long-term liabilities in accounting, it’s important to understand what they mean, how long they last, where they show up on a balance sheet, and how they affect a company's financial health. ### What Are Current Liabilities? Current liabilities are debts that a company expects to pay off within one year or within its operating cycle, which is the time it takes to turn its goods into cash. These debts come from the company's daily operations. Here are some common examples: - **Accounts Payable**: Money owed to suppliers. - **Short-term Loans**: Loans that need to be repaid soon. - **Accrued Expenses**: Bills that are due but not yet paid. - **Current Portions of Long-term Debt**: Parts of long-term loans that are due soon. - **Unearned Revenue**: Money received for services that haven't been performed yet. Since current liabilities need quick payment, companies must manage their cash flow properly. A key factor here is liquidity, which means how easily a company can pay its short-term debts. The **current ratio** (current assets divided by current liabilities) helps show this. If the current ratio is less than 1, it might point to possible cash problems. ### What Are Long-term Liabilities? Long-term liabilities, on the other hand, are debts that are not due within the next year. These usually involve financing that lasts for several years and can affect a company’s financial plans and investments. Some common long-term liabilities include: - **Long-term Debt**: Such as bonds or loans that are paid back over a long time. - **Lease Obligations**: Contracts for renting properties or equipment. - **Deferred Tax Liabilities**: Taxes that are owed but delayed for future payment. - **Pension Liabilities**: Future payments promised to employees after they retire. These long-term debts can impact how a company spends its money on things like growth, new ideas, and increasing production. They also come with interest payments that need careful planning to avoid cash flow issues. ### Key Differences and Characteristics Let’s break down how current and long-term liabilities differ: 1. **Reporting Period**: - Current liabilities relate to immediate payments, while long-term liabilities cover a longer timeframe. 2. **Daily Operations**: - Current liabilities are about everyday expenses, while long-term liabilities come from bigger financial decisions, like buying equipment or property. 3. **Expense Recognition**: - Current liabilities show up easily in income statements, while long-term liabilities might involve complex calculations and follow specific accounting rules. 4. **Balance Sheet Placement**: - Current liabilities are listed under their own section by when payments are due. Long-term liabilities are in a different area, showing they will take longer to pay off. This helps people quickly see the company’s obligations. Balancing current and long-term liabilities is important for a healthy financial state. ### Important Financial Ratios Both types of liabilities affect different financial ratios: - **Debt-to-Equity Ratio**: This shows how much debt a company has compared to what shareholders have invested. A higher ratio can suggest more financial risk. - **Current Ratio**: As mentioned, this ratio indicates a company’s ability to pay short-term debts. - **Long-term Debt to Equity Ratio**: This gives a sense of how much of the company’s money comes from long-term debt versus owner's money. ### Why It Matters Understanding current and long-term liabilities is not just theory; it helps in making smart business decisions. Management and investors look at these liabilities to predict how much cash a company will have in the future and its financial health. ### Example: Current vs. Long-Term Liability Imagine a factory that borrows $500,000 to buy new machines. If this loan is to be paid back over ten years, it will be classified as a long-term liability. But if $50,000 is due to be paid back in the next year, that part will be labeled a current liability. ### Conclusion In summary, both current and long-term liabilities are necessary parts of a company’s finances, but they serve different purposes and timeframes. Current liabilities need fast attention to keep things running smoothly. In contrast, long-term liabilities show the company’s bigger financial plans and commitments. Managing both types well helps ensure that the company can grow and keeps operating effectively.
When we look at the Statement of Cash Flows, it’s important to know the difference between the direct and indirect methods. Let’s make it simple! The **direct method** shows cash flows from business activities by directly listing all the cash coming in and going out during a certain time. This means you can see clear amounts like cash collected from customers and cash paid to suppliers. With the direct method, you get a clear view of where cash comes from and where it goes. It’s detailed and can help people understand how cash is made and used. Now, let’s talk about the **indirect method**. This method starts with the net income, which is like the profit of the company. Then, it makes adjustments for things that don’t involve actual cash, changes in debts, and other factors to find out the cash flows from business activities. In simpler terms, the indirect method connects net income to cash from business activities by adding back non-cash costs (like depreciation) and considering changes in money owed and inventory. Here are some key differences: 1. **Presentation**: - **Direct Method**: Lists cash transactions directly. - **Indirect Method**: Adjusts net income for non-cash items and changes in debt accounts. 2. **Complexity**: - **Direct Method**: Is simpler to understand but usually needs more detailed records of cash transactions. - **Indirect Method**: Might be easier to create using current financial statements, but doesn't offer as much detail on cash sources and uses. 3. **Usage**: - **Direct Method**: Not used as often because it can take more work. - **Indirect Method**: Many companies, especially larger ones, like this method because it’s easier and quicker. In summary, choosing between the two methods often depends on the company’s rules and how much detail the stakeholders want. Both methods give important insights into cash flow.
Intermediate Accounting can seem really tough for college students. This is especially true when it comes to understanding changes in accounting rules and fixing mistakes. There are some important changes that students need to know for their classes, as these ideas come up often in both schoolwork and real-life situations. One key part to focus on is the new accounting standards created by the Financial Accounting Standards Board (FASB). A big change is the Accounting Standards Codification (ASC), which keeps getting updated to help everyone follow the Generally Accepted Accounting Principles (GAAP). For example, ASC 606 talks about when and how to recognize revenue. Students need to understand how revenue is measured and recorded, as this affects financial statements. Another important area is how leases are treated under ASC 842. This rule says that almost all leases must be shown on the balance sheet, changing how we report assets and liabilities. Students should learn to tell the difference between operating leases and finance leases. They need to apply the new rules for recognizing and measuring leases because it plays a big role in important financial ratios and overall reports. Students should also get to know the idea of correcting errors in financial statements. Sometimes, mistakes happen, whether they are adjustments to past periods or changes in accounting principles. Understanding how to analyze and fix these mistakes is essential. Errors can affect not just the accuracy of financial reports but can also have a bigger impact on financial analysis. Additionally, students must understand the importance of full disclosure. When accounting rules change or when there are errors, it is crucial to clearly explain these changes in financial statements. Students need to know how to write clear notes or disclosures to help users of the financial statements understand what's happening. This skill is necessary for following the rules and for keeping everyone informed. In the end, keeping up with these changes and knowing what they mean will help students even after they finish school. Employers want to hire people who not only know the technical side of accounting but can also handle the changing world of accounting standards confidently. In short, mastering these accounting changes will give college students the ability to use their knowledge in real-life situations effectively.
**Understanding Ratio Analysis: A Simple Guide** Ratio analysis is a helpful way to understand financial statements better. In Accounting classes, especially in University Accounting II, learning how to analyze these statements is very important. This analysis helps us get meaningful insights from a company's financial reports. **What is Ratio Analysis?** At its core, ratio analysis looks at the relationships between different financial numbers. This helps people see how well a company is doing and how healthy its finances are. By looking at liquidity and profitability, we can find important details that might be hard to see just by looking at the financial statements alone. **Understanding Liquidity** One of the key parts of ratio analysis is liquidity. This tells us how easily a company can pay its short-term debts. Liquidity ratios, like the current ratio and quick ratio, give us these insights. - **Current Ratio**: This is found by dividing current assets by current liabilities. It shows us how well a company can pay its debts due within one year. If the current ratio is greater than one, it usually means the company is in a good position to pay its current debts. - **Quick Ratio**: This ratio takes a closer look by leaving out inventory from current assets. If a company has a current ratio of 1.5 but a quick ratio of less than 1, that can be a warning sign. It means the company might depend too much on selling inventory, which may not always be easy to do during tough financial times. **Looking at Profitability** Profitability ratios are next. They help us see how well a company is making money. - **Return on Equity (ROE)**: This ratio shows how effectively a company uses the money from its shareholders to make profit. A high ROE is a good sign that the company is managing its money well. If ROE is going down, it might mean there are problems to look into. - **Return on Assets (ROA)**: This helps us see how effective a company is at using its assets to earn money. A rising ROA means better efficiency, while a falling ROA could be a sign of trouble, especially in companies that own a lot of assets. **Understanding Solvency** Beyond liquidity and profitability, ratio analysis helps us look at solvency. This is about whether a company can meet its long-term debts. - **Debt-to-Equity Ratio**: This ratio shows how much of a company’s funding comes from debt compared to its owners’ investments. A high debt-to-equity ratio can mean a company might be taking on too much risk. On the other hand, a lower ratio suggests a safer approach with less financial risk. **Operational Efficiency** When we think about how well a company works, we can also look at specific ratios, like inventory turnover and accounts receivable turnover. - **Inventory Turnover**: This measures how well a company manages its inventory. A high turnover means strong sales and effective management, while a low turnover can suggest issues like having too much stock. - **Accounts Receivable Turnover**: This shows us how well a company collects money it is owed. A rising ratio means better collection, which helps cash flow. **The Importance of Benchmarking** Comparing a company’s financial ratios to industry averages or competitors is important. This helps identify trends and spot strengths and weaknesses. **Limitations of Ratio Analysis** However, we should keep in mind that ratio analysis has some limits. These ratios depend on the underlying financial statements, which might not always be accurate. Changes in how things are accounted for can affect how ratios compare over time or between companies. **Using Various Ratios** There are many types of ratios we can use to understand a company's financial health. For example: - **Price-to-Earnings (P/E) Ratio**: This shows how much people are willing to pay for a company’s stock based on its earnings. It gives insights into how investors view the company. - **Interest Coverage Ratio**: This measures a company’s ability to pay interest on its debts. A higher coverage ratio means a company can easily handle its interest payments, making it more attractive to cautious investors. **The Future of Ratio Analysis** In today’s fast-changing business world, combining ratio analysis with technology is key. Accountants and analysts can use historical data to predict future performance. Tools like machine learning and data analytics help make these predictions more accurate. **In Summary** Ratio analysis is a powerful tool that helps us understand financial statements. It looks at liquidity, profitability, solvency, and operational efficiency. These ratios give important insights beyond just the numbers. By using ratio analysis along with other evaluations, we can make better financial decisions and understand the company's finances more clearly.
Earnings Per Share (EPS) is really important for figuring out how well a company is doing financially. It helps us compare a company's success to other numbers in finance. 1. **How EPS is Related to Net Income**: EPS is found by taking the company's net income and dividing it by the number of shares that are available for people to buy. $$ \text{EPS} = \frac{\text{Net Income}}{\text{Outstanding Shares}} $$ This shows how good a company is at making profit for each share. 2. **EPS and the P/E Ratio**: EPS is part of something called the Price-to-Earnings (P/E) ratio. We calculate it like this: $$ \text{P/E} = \frac{\text{Market Price per Share}}{\text{EPS}} $$ When EPS is high, the P/E ratio often gets lower. This can mean that the stock is undervalued, or not priced high enough. 3. **EPS vs. Dividends**: EPS tells us how profitable a company is, but Dividend per Share (DPS) shows how much of that profit is shared with the people who own stock. A company that has high EPS but low DPS might be using its profits to grow instead of paying them out as dividends. By looking at EPS along with these other numbers, we can get a better idea of how healthy a company's finances really are.