The Importance of Accounting in Modern Enterprise Management

1. Introduction

The global economy is increasingly becoming complex. Along with the continuous development of business, the application of accounting principles is also more and more diversified. In recent years, due to the fierce competition in the global market, many companies have encountered financial difficulties, and even some companies have had to face bankruptcy. In such a situation, the role of accounting becomes more prominent. Good accounting can help enterprises grasp the actual operation status of enterprises in time, make correct judgments and decisions, and avoid or reduce economic losses. Poor accounting often leads to enterprise mistakes, bad decisions, and even bankruptcy
Therefore, it can be seen that accounting plays a very important role in modern enterprise management.

2. Company focus – Cyclacel Pharmaceuticals

In this paper, we take Cyclacel Pharmaceuticals as an example to illustrate the issue of corporate finance-the correction of a previously issued report due to an error in the accounting process. Cyclacel Pharmaceuticals is a biopharmaceutical company dedicated to the development and commercialization of oral therapies for the treatment of cancer and other serious diseases. The company’s products include seliciclib, CYC065, sapacitabine and CYC140. Seliciclib is an investigational new drug targeting CDK (cyclin-dependent kinase) that has completed Phase II clinical trials for the treatment of leukemia and solid tumors; CYC065 is an ACLK (alternative cleavage site location of kinesin spindle protein) inhibitor that has completed a Phase I clinical trial for treatment Cutaneous T-cell lymphoma; Sapacitabine is an investigational new drug targeting DNMT (DNA methyltransferase) that has completed a Phase III clinical trial for treatment of hematologic malignancies; CYC140 is an inhibitor of Aurora A / B kinase that has entered Phase I clinical trials for treatment Neuroblastoma

3. Accounting principles

Generally speaking, there are two types of accounting principles, one is accrual basis accounting and the other is cash basis accounting. Accrual basis accounting means that when an enterprise recognizes income and expenses, it should not only refer to whether cash inflows and outflows have occurred, but also whether economic activities have occurred. That is to say, when economic activities that can generate revenues or incur expenses occur, they should be recognized regardless of whether cash inflows or outflows have occurred. Only when cash inflows or outflows occur can related revenues or expenses be settled

4. The correction of a previously issued report

Cyclacel Pharmaceuticals announced on February 14, 2011 that it would restate its unaudited condensed consolidated financial statements for fiscal years 2009 and 2010 and its audited consolidated financial statements for fiscal year 2009 to correct errors in its use of the permanent equity method to account for its investment in Cyprotex plc. Under US GAAP (US generally accepted accounting principles), companies use the equity method to account for investments in common stock when they have significant influence over but do not control investees

5. Dividends

Dividends are payments made by a corporation to its shareholders out of its profits (or reserves). A corporation may declare dividends at any time after it earns profits or other financial gains; however, most corporations pay dividends quarterly (every three months). Publicly traded corporations usually pay higher dividends than privately held corporations.
Dividends can be paid in cash, stock, or other assets. When dividends are paid in cash, they are usually paid out of the corporation’s current earnings or its accumulated profits from previous years. If a corporation does not have enough cash to pay its dividends, it may borrow the money or sell some of its assets. When dividends are paid in stock, they are called scrip dividends.

6. Stockholders

A stockholder or shareholder is an individual or institution (including a corporation) that legally owns one or more shares of stock in a joint stock company. A stockholder is someone who owns shares of a particular stock. A shareholder is someone who owns any securities that represent ownership in an entity.
The terms “stockholder” and “shareholder” are often used interchangeably; however, there is a subtle difference between the two terms. A stockholder has ownership in a particular stock, while a shareholder has ownership in any securities that represent ownership in an entity.

7. Price per share

The price per share is the price of a single share of a company’s stock. The price per share is determined by the market price of the company’s stock; that is, the price that buyers are willing to pay for the stock and that sellers are willing to accept.

8. Investment

An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in value at some point in the future. An investment always involves risk, which means there is no guarantee that the investment will make money or appreciate in value.There are many different types of investments, including stocks, bonds, mutual funds, real estate, and commodities. Many people invest in a mix of different types of investments in order to diversify their risk and improve their chances of making money.

FAQ

Cyclacel Pharmaceuticals is a company that specializes in the development of cancer treatments.

The financial statement of Cyclacel Pharmaceuticals shows that the company had a revenue of $56.4 million in 2017 and a net income of $3.5 million.

Investors use the financial statement of Cyclacel Pharmaceuticals to assess the company's financial health and performance.