Cash in account does not = retained profit figure

[zedAccounts]

Hi there,

I have just asked my accountant for a retained profit figure to date as I need to draw a larger than normal dividend.

However, as the subject field surmises my account balance is a lot lower than the figure supplied to me today.

My 2009-2010 accounts are close to completion, and my accountants have my entire year's bank statements. Indeed they are sent to them monthly. All dividends have been declared and none have gone unnoticed by my accountants.

Can anyone explain this?

The difference will generally come from debtors (e.g. unpaid invoices) and creditors (e.g. unpaid tax); your bank account will exclude the former and include the latter. Retained profit will be the other way round.

ZED.

[JamJarST]

But even without buying a basic bookkeeping book I understand that retained profit is after CT has been applied

Good. Now all you need is a basic understanding of working capital and you will be a financial whizz

[Jonny1974]

Good. Now all you need is a basic understanding of working capital and you will be a financial whizz

Working what now?

[JamJarST]

Working what now?

Lol

Current assets minus current liabilities. Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. also called net current assets or current capital.

[Jonny1974]

Lol

Current assets minus current liabilities. Working capital measures how much in liquid assets a company has available to build its business. The number can be positive or negative, depending on how much debt the company is carrying. In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations. Companies with negative working capital may lack the funds necessary for growth. also called net current assets or current capital.

Thank you for all of your patient replies..I'm still waiting to hear from my accountants. Once I do I'll let you know the outcome.