Analysis and Interpretation of Financial Statements

Concept

Analysis and interpretation of financial statements are an attempt to determine the significance and meaning of the financial statement data. so that a forecast can be made of the prospects for future earnings ability to pay interest, debt maturities (current and long-term) and probability of a sound dividend policy.. To quote Myers “Financial statement analysis is largely a study of the relationship among the various financial factors in a business as disposed by a single set of statement and study of the trend of these factors as shown in a series of statements. So financial .analysis. main function is .the pinpointing of the strengths and weaknesses of a business concern by regrouping and analysis of figures contained in financial statements by making. comparisons of various components and by examining their content. The financial manager uses this as the basis to plan future financial requirements by means of forecasting and budgeting procedures.

The analysis. and interpretation of financial statements represent the last of the four major steps of accounting viz.

1. Analysis of each transaction to determine the accounts to be debited and credited and the measurement and valuation of each transaction to determine the amounts involved.

2. Recording of the information in the journals. summarisation in ledgers and preparation of a work sheet.

3. Preparation of financial statements.

4. Analysis and interpretation of financial statements results in the. presentation of information that assists business managers, creditors and investors. They require a clear understanding of monetary valuation of the items.
Types of Financial Analysis

1. External Analysis.

2. Internal Analysis.

3. Horizontal Analysis.

4. Vertical Analysis.

1.External Analysis:-This is made by those who do not, have access to the detailed records of the company. This group Includes credit agencies, investors and governmental agencies regulating: a business in a nominal way. They depend almost entirely on published financial statements. Now their position has been improved due to governmental information.regulations requiring business undertakings to make available:. detailed information schedules and explanatory footnotes to the public through audited accounts.

2. Internal Analysis:-This accomplished ,by those who have. access .to the books of accounts. and all-other information related to business. The internal analyst analyses for managerial purposes, It is an internal analysis and it is conducted by executives and employees of the enterprise as well as governmental and court agencies which may have major. regulatory and other jurisdiction over the business.

3. Horizontal Analysis: When Financial Statements for a number of years are reviewed and analysed . The analysis is called “Horizontal analysis” This is also known as ” Dynamic Analysis” as it is based on data from the year to year rather than one data or period of time as a whole.

4. Vertical Analysis :- Itis often used for referring to ratios developed on on date or for the accounting period it as also called ” Static Analysis. This is not very helpful for a proper analysis of the firms financial position and its interpretation as it does not enable to study the data in perspective . But this can be provided by a study conducted over a number of years. so that comparisons can be effected. Hence this is not very useful.

External Analysis and internal analysis are differentiated according to material used and Horizontal analysis and Vertical Analysis are classified according to method of Financial Analysis
Source
Analysis And Interpretation

Analysis and Interpretation are interconnected because interpretation is impossible without analysis and short of interpretation, analysis is useless. Interpretation requires.proper analysis. It difficult to interpret financial statements figures which consist not only of account balances, which is usually are the results of a number of debit and credit entries for a variety of transactions, but also combinations of account balances, because the figures do not represent homogeneous data.So this needs ` an -analysis of the totals in statements into their components so as to restore some sort of homogeneity to the statement data. For example, though current liabilities, in a company’s balance- sheet. are shown separately from other liabilities it would be better from the -point of -view of -the financial manager to have information regarding debts due within a month or six months or-for long periods. This information has to be obtained by aging the accounts as it is not available in statements.Interpretation further requires comparison.The Financial statement has to be -dissected into, its constituents in order to measure the relative: magnitudes of the vicious entities. For example, if current liabilities on a particular date. are stated at a certain figure and’ if it is desired to know whether the business would be in a position to meet these obligations, the value of liabilities will be compared- with that of – assets’ such as cash, readily convertible assets, etc., which are available to pay off liabilities.

Unlike in the earlier days, now accountants play a vital role in the analysis and interpretation of financial and operating data due to the pressing demand for analytical information by business executives. bankers and others. Now-a-days the work of an accountant is incomplete. if he has not analysed and interpreted the data presented in the,statements..

Financial Accounting – Role of Accounting, Objectives of Accounting – Limitations of Accounting

Role of Accounting

Accounting is not an end in itself; it is a means to an end. It assists by providing quantitative financial information that can be helpful for the users in making better decisions regarding their business. Accounting also describes and analyses the mass of data of an organisation through measurement, classification, and as well summation, and simplifies that data into reports and statements, which show the financial situation and results of operations of that organisation. Accounting as an information system gathers processes and carries information about an organisation to a wide variety of interested investors or other parties.
Differences between Accounting and Book-Keeping

Book keeping generally involves only the collection of business transactions (transactions) and is therefore, just one part of the process of accounting. About the accounting, this involves the complete accounting process, i.e. identification, measurement, collection, and communication. These days, much of the book keeping function is processed by the computer and other technology.
Objectives of Accounting

The basic aim of accounting is to give information to the interested parties to enable them all to make important business decisions. The required information, particularly in the case of external parties, is given in the basic financial statements: Profit and loss statement and the Balance sheet.

Besides the said sources of information, the internal parties, officers and other staff of the company, can get additional information from the records of organisation. Thus the primary objectives of accounting can be stated as :

Maintenance of Records of Business transactions
Calculation of Profit or Loss
Processing of Financial Position
Provide Information to the Parties

Maintenance of Records of Business

First record, then pay; if there is an error, trace it from the records and correct the same. Human memory is limited and that is true. Even the most intelligent personnel cannot accurately recollect what he might have come across in the daily operations. He need not bother of stress his memory for no reason, if proper and quite records of all business transactions are kept completely. Also, records can be used by different personnel for different decision-making purposes.
Calculation of Profit or Loss

Making profit is the sole purpose of any business. The information related to the profits are available from the profit and loss statement. Profit is calculated by taking out expenses from the associated revenues. Profit is a measure of the performance of the organisation.
Depiction of Financial Position

A balance sheet reflects the financial position of an organisation. It is a statement of assets and liabilities. It shows the assets owned by an organisation and depicts the liabilities against the assets. The balance of assets minus the external liabilities shows the capital.
Provide Information to the Parties

Generation of information is not an end in itself. It is a means to facilitate the dissemination of information among different user groups. Therefore, communication of information is the essential function of accounting. Accounting information is communicated in the form of reports, statements, graphs and charts to the internal and external users who need it in different decision situations.

Internal users: The officers and staff of an enterprise need useful and timely information for making different types of business decisions. A major objective of accounting is to provide management with relevant and reliable information. For example, some of the questions a manager might ask are:

How much profit did the company make during the last accounting period?
Is the return to share holders adequate?
How can it be improved?
Does the company have enough cash on hands to pay debts when they fall due?
What are the projected cash needs in the next quarter?
Which are the most profitable products?
What is the cost of manufacturing each product?
Which costs exceed the budget?
How much money should be borrowed to expand the business?

External users: The outside users have limited authority, ability or resources to obtain information. Unlike internal users, they have to rely on financial statements (Balance sheet, Profit and Loss statement) as their principal source of information about an enterprise’s economic activity. Primarily the external users are interested in the following:

The amount and the time when they are likely to receive cash in the future from dividend, interest etc.
Reliable information about economic resources (assets) and obligations (liabilities) of a business enterprise in order to evaluate its strengths and weaknesses, and its financial position in general.
Information about the performance and the earning power of the business enterprise.
Any other information relevant to the users needs.
Limitations of Accounting

Accounting records relate to the transactions that are completed, which provide fairly good account of the transaction of the business organisation. However, for decision-making we need the information, which relates not only to past but also about present and future. Financial accounting makes provision for financial information but it does not provide non-financial information such as behavioral and socio-economic. If the objective of accounting reports is to influence the behavior through decision-making then it must provide the data concerning the behavior and outcome of human activity to facilitate performance evaluation. Therefore, the accounting information does not fully meet different types of information-requirements of varied decision making situations. Accounting provides stewardship information and not decisional information.
See also:

What is the use of Accounting
Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part, at least, of a financial character, and interpreting the results thereof.
Basic Terms used in Accounting | Basic Accounting Terms
Basic Terms used in Accounting, basic accounting terms, Profit and Loss Statement, Balance Sheet. Accounting Equation, Assets, Liabilities, Capital, Sales. Expenses and Revenues. Expenditure. Loss, Income and Profit, etc.

Pros and Cons of Financial Statement Analysis

Financial statements analysis is an essential tool to the company since it ensures that it adheres to accounting standards by providing accounting regulatory agencies with an understanding regarding whether the company follows accounting standards or not. Further, it plays an important role in taxation by assisting government agencies in performing taxation analysis due to the company. In addition to that, the company can easily analyze its own performance over a specified time period and plan in advance measures to be taken to ensure the company rips many benefits in future.

Despite the benefits associated with financial statement analysis they are also comprised of deficiencies. Financial statements neglect employees since they do not cover their skills and performance within the company which are normally important in the measurement of the company’s performance. Financial statements comprise of balance sheets which are not effective in provision of relevant information in time as they entail use of historical data hence not adequate for evaluating the current company’s position. Moreover, there are several accounting measurement techniques which company use in analyzing financial statements which makes it difficult for companies to compare their performance with those of others.

To managers, financial statement analysis provide assistance in decision making as it enables them measure the companies’ performance at specified time period which in turn provides them with an understanding regarding the profit incurred. In a company, there are strategies formulated and implemented whose objective is to ensure improvement in the performance of the organization. Through financial statement analysis managers can easily compare the company’s performance in time periods thereby giving them an understanding of whether the strategies adopted are beneficial to the company thereby helping them in deciding the fate of the strategies.

However, comparing the company’s performance with those of rivals using the financial statements can be misleading to the managers in that different companies may utilize different accounting which provide a variation in terms of the results obtained. This can mainly be attributed to lack of universal guidelines for analyzing financial statements. At present time, creation and adoption of universal guidelines for financial statements analysis is not possible, especially with the different accounting methods and variation in management strategies among companies.

Mack Truck Clearance Sale With Special Financing

Mack trucks are obtainable through special clearance sales and special financing due to this economic down turn.
Due to a contracting market, numerous financial institutions have unnecessary Mack trucks on their books that they need to retail or lease.

These in-house inventories are non income producing, therefore putting pressure on the lender to make a deal with the consumer. These deals can be found in the cost, the lending or a pattern of both.

An off lease commercial vehicle has been brought back to the financial institution as the lease has expired. The lessee has made a determination to return the item in lieu of exercising the buyout opportunity. A repo has arisen due to a non-payment terms or a violation of the conditions of the lease. Either way, the lender has taken these trucks back and must recondition these Peterbilts and either sale them or lease them.

The financial institution will either advertise their record through their internal sales force or outside professionals such as brokers to move their inventories as swift as possible. At times as these inventories aren’t moving, the lender could place these Mack trucks up for auction

The form of Mack we are ready to identify as prospective deals for the buyer are the following

Mack tractor trailers, Mack tractor sleepers and tractor trailers, Mack garbage trucks, Mack tow trucks, Mack vacuum trucks, Mack big rigs, Mack concrete and cement trucks, Mack tanker trucks

Some of the ways the start up and/or seasoned business can uncover these deals are through trade publications, surfing internet search engines, contacting lease brokers for information and speaking to lenders directly.

In addition to the Mack truck clearance public sale offering discounted prices, the lenders are working with the dealers to move these trucks with minimum credit requirments for their potential consumers. As a substitute of thorough paperwork and rigid financing qualifications., these financial institutions are working with the start up and weathered clients closely to make a arrangement happen. Some banks are offering credit programs with 3-5% down with negligible credit starting as low as 525. No earlier year income tax returns and financial statements are obligatory..

At the present-day time, there are selected semi truck Mack truck programs that don’t need a credit check. This is a remarkable opportunity for the owner operator or company driver to acquire a truck without worrying about their credit being an problem. In this economy with massive layoffs and many companies looking to scale furnish their operations and expenses, this is a scary moment for the company driver. For additional trucking companies seeking owner operators only, these no credit check leasing gives the company driver and the unemployed semi truck driver a unique opportunity to obtain a truck.

In closing, this is a buyers market for Mack trucks. Check out all the opportunities in the market and make sure that you have a stable income base to assume whatever debt that you may perhaps occur.

Happy hunting for your Mack Truck and its related lending.

Rebuild Credit Profile, Maintain Good Credit, And Get Credit After Bankruptcy With Rcacredit And Its

When you loose the ability to pay your credits, you have the tendency to file for bankruptcy. Bankruptcy has become an escape goat for many who want to be free from financial obligation with creditors. With bankruptcy, the court will either extend your payment terms that would be favorable to your or you will have to pay the creditor in other ways like exchange it with property and equipments or from the purchase of the same. It would seem favorable on the debtor’s side especially on the part of immediate relief of obligation. The relief comes by extension of payment until the debtor is able to pay, or by using of assets for payment. In both ways, the debtor can escape from the pressure of the credit’s due and amounts to be paid.

But filing for bankruptcy does not necessarily give you more benefits. Although it can be an option for inability to pay, it has grave financial consequences. With bankruptcy, your credit record is stained. This means that other possible creditor may not rely on your ability to pay anymore no matter how well you recovered from financial loss. Bankruptcy records are open to the public. Creditors would absolutely dig into your records to evaluate your application for credit. Remember creditors are into business. If they find out that they have low chances of earning from you because of your tendency to drop your financial obligation, then they would not definitely consider you as an advantage. The only way that creditor approve of your application is when you have good credit records and is able to maintain good credit standing.

You may wonder, is credit still possible after bankruptcy? Generally, the answer is no because of the consequence of bad credit record. However, you can regain good credit with the help of financial services that specialize in rebuilding credit profiles. These companies can help you get credit after bankruptcy by developing programs that would provide you with in-depth understanding on how credits work. One of the companies that offer such is RCA Credit Services. This company is under service based industry that tackles on credit enhancement and boosting of credit scores. When you enroll on RCA Credit Services, you will be able to re-establish your credit standing and maintain good credit that would benefit you in the long run.

RCA Credit Services can educate you on various aspect of the credit industry. You will learn how to repair your credit records and obtain financial freedom. Moreover, they involve financial institutions that can be part of the program to handle your loan needs that would both be satisfactory for them and at the same time expose you to maintain good credit with them. They can provide you with answers to all credit aspects that will rebuild your credibility in terms of credits. Finally, with RCA Credit programs, you get to increase your credit score that would make you an advantage to creditors.

All in all, RCACredit can provide you with the ability to get credit after bankruptcy. All you need to do is to contact them and cooperate in their programs that put you on positive credit ground.

Accounting Policy- Assistive Tips About Accounting

It’s difficult to provide accurate accounting policy information, but we have gone through the rigor of putting together as much accounting policy related information as possible. Even if you are searching for another information somehow related to a self directed retirement, GAO website, non financial accounting or software small business this article should help a great deal.

The general ledger is the core of your company’s financial records. These constitute the central “books” of your system, and every transaction flows through the general ledger. These records remain as a permanent track of the history of all financial transactions since day one of the lives of your company.

Having the same person draft the checks and reconcile the checking account is a good example of how not to assign accounting duties. We’ll talk extensively about internal control later. However, for now, small businesses often can’t afford the number of people needed for an adequate separation of duties. The internal control structure that we’ll install in your new accounting system helps mitigate that risk through mechanics and procedures rather than expensive people.

Balance sheet accounts are the assets and liabilities. When we set up your chart of accounts, there will be separate sections and numbering schemes for the assets and liabilities that make up the balance sheet. A quick reminder: Increase assets with a debit and decrease them with a credit. Increase liabilities with a credit and decrease them with a debit.

Many people forget that they can get more information about any subject matter, be it accounting policy information or any other on any of the major search engines like Google Dot Com. If you need more information about accounting policy, head on to Google Dot Com and be more informed.

Balance sheets can identify and analyze trends, particularly in the area of receivables and payables. Is the receivables cycle lengthening? Can receivables be collected more aggressively? Is some debt uncollectible? Has the business been slowing down payables to forestall an inevitable cash shortage? Balance sheets, along with income statements, are the most basic elements in providing financial reporting to potential lenders such as banks, investors, and vendors who are considering how much credit to grant the firm.

First in, first out means exactly what it says. The first widgets you bring into inventory will be the first ones sold as a product. First in, first out, or FIFO as it is commonly referred to, is based on the principle that most businesses tend to sell the first goods that come into inventory.

Accountants also act as personal advisors. They not only provide clients with accounting and tax help, but also help them develop personal budgets, manage assets and investments, plan for retirement, and recognize and reduce their exposure to risks. This role is in response to clients’ demands for a single trustworthy individual or firm to meet all of their financial needs. However, accountants are restricted from providing these services to clients whose financial statements they also prepare. (See financial analysts and personal financial advisors elsewhere in the Handbook.)

We discovered that many people who were also searching for information related to accounting on policy also searched online for related information such as cash flow statement, welder jobs, and even financial statement accounting.

Avoid Tragic Losses With Personal Financial Records Software

Some families suffer tragic losses because they lose track of assets. Your hard earned wealth can languish in limbo if no one knows where it is, or that it even exists. It’s not enough for you to know. Your family, your caregivers, your advisors and your estate also need to know.

You would be amazed at the amount of money sitting in state treasuries and trusts because families don’t know it exists. One quarter of all life insurance benefits go unclaimed. According to the SEC, as many as 3 million stockholders are entitled to unclaimed stock worth $10 billion. Government agencies are holding $60 billion in unclaimed property and missing money. $500 million in Social Security benefit checks go unclaimed every year and less than 1% of U.S. Savings Bond holders are successfully notified when the bonds reach maturity.

Somebody is entitled to that money.

Ensure your estate knows what you have and where it is. Create a personal financial record of all your assets and property. List them to establish proof of ownership. Identify the location of their physical whereabouts. Create authority for at least one other person to gain access if you can’t.

The most useful tool for that purpose is personal record keeping software. Paper records are easily lost, damaged or destroyed. Digital records are secure from prying eyes. You can back up digital records and keep protection copies in safe locations. Record keeping software runs on your own computer, at home, without connection to the internet. Several layers of encryption guard against intrusion. Your records are password protected so only you can access them. But, you can create access for other authorized parties through passwords that you control.

Record keeping software has other advantages. Namely, it provides an organizing framework to help you know what information to keep track of. All you have to do is fill in the blanks. Software makes easy work of what can otherwise be an agonizing, stressful task. Other benefits include additional categories beside Financial Records where you can enter, store, organize and maintain other information important to your family’s well-being. Medical and health records, for example or insurance and retirement records, or emergency contact numbers and living and last wishes.

A complete PFR will ensure nothing gets lost or forgotten and that transitions are smooth and hassle-free. You don’t want to leave your estate in such a condition as to delay or obfuscate transfer of assets. Personal record keeping software is a program that helps you get organized and gather the details of your financial records all in one place.

Article Source: http://EzineArticles.com/7125464

Financial Records Management: Are Your Bank’s Records Safe?

Banks face an unprecedented challenge when it comes to avoiding data breaches and identity theft. Thanks to poor economic conditions over the past decade, the past few years have seen an astoundingly high increase in fraud and identity theft attempts. To counteract this threat, banks need to create a more effective financial records management program to protect themselves from potential data breaches, financial losses, and public relations nightmares.

The Downsize Dilemma
The state of the economy has forced numerous banks to cut down on their staff. During these downsizes, many banks have reduced operational spending by cutting costs on the management of financial records and compliance team members. By doing so, tellers and other entry-level personnel members have easier access to client files, critical information, and records that contain financial data, thus making banks more vulnerable to identity theft and fraudulent activity from within their own company.

Financial Records Management – Not a Good Area to Cut Corners
An effective program is critical for all banks, regardless of their size or annual transaction volume. Banks have numerous fraud-related risks that include financial and account statements, debit and credit card numbers, electronic data that contains account numbers, names, Social Security numbers, and other personal information.

Poor control of these records leaves them highly vulnerable to both physical and electronic theft. Once in the hands of thieves, this private financial data can be used to empty bank accounts, destroy credit, and make enormous purchases-just to name a few of the many disastrous effects of not having a secure management plan in place.

The Solution
Banks cannot escape the fact that they need to cut back on monthly expenditures, but there are options for storing records without increasing vulnerability. Banks can store information in a cost-effective way by enlisting the help of specialized financial records management to prevent unauthorized personnel from accessing confidential financial records. This is especially helpful in preventing disgruntled employees from stealing credit card information or even lifting money right out of customer accounts.

Careful planning provided by trained experts is imperative to protect a bank’s clients. They can create a customized system and store physical records in a safe but accessible way.

Outsourcing Benefits
In-house records management and security is often not a financially viable option for many banks. Dealing with the threat of fraud and identity theft is easier and more affordable when they outsource this area to an expert that can handle all areas of financial records management, including organizing, storing, moving, and shredding sensitive data.

One of the biggest advantages to outsourcing is that banks no longer have to waste valuable capital on creating a secure, in-house storage system. This eases the financial burden on the bank, which gives it the additional resources to invest in financial records management and protect itself from additional liability costs down the road.

Additional benefits of outsourcing include:
• Being able to trust a professional that can offer expert consultation and advice for safe and effective records management
• Reducing storage and regulation burdens
• Decreasing the amount of time it takes to recover records
• Reducing the amount of downtime in a natural disaster when in-house records are lost
• Decreasing legal repercussions associated with identity theft and fraud
• Secure shredding services to eliminate old or unnecessary records
• Hiring a company with a strong records moving background as well to relocate financial records with a secure chain-of-custody procedure

Article Source: http://EzineArticles.com/7515033

UJ obtains court order to prevent violence, anarchy

The High Court has granted the University of Johannesburg (UJ) a court order, binding until 31 May 2016, when respondents will have an opportunity to show cause why the interim relief should not be made final.
UJ obtains court order to prevent violence, anarchy
© Evgenyi Lastochkin – 123RF.com
The university obtained the order to ensure the safety and security of all its stakeholders and property, in the wake of recent acts of arson and wanton behaviour on its campuses.

The interdict applies to everyone, including students and staff, participating in, inciting, encouraging or facilitating protest action or demonstrations on its campuses – with the property covered by the order encompassing all UJ premises, residences, libraries, lecture venues, laboratories and any other buildings operated, owned or managed by the university, including off-campus accommodation.

Tumi Mketi, senior executive director in the office of the vice-chancellor, said, “Recent events at UJ, including Monday morning’s callous arson attack on the Sanlam Auditorium at the Auckland Campus – which caused damage estimated at R100 million – has necessitated the move.

“Irrespective of anyone’s ideological or political orientation, students’ rights to initiate, organise and participate in lawful activities of any academic, political, religious and social student organisations are promoted and shall be protected at the university, and the court order recognises this.

“Indeed, it remains possible for students to participate in public protests, demonstrations and meetings as long as they do so in terms of the university’s student regulations.

“However, protests or demonstrations, which are not conducted in terms of the University’s student’s regulations, may not be held on the university’s campuses or within 100 metres of the entrance to, or boundary of the university’s property, and neither may meetings for the purpose of inciting, encouraging or instigating any protest action or demonstration at or on university premises.”

Prohibited conduct

The following conduct is expressly prohibited by the court order:

Obstructing or preventing students, staff and visitors from entering and exiting the university;
Interfering with access control to any of the entrances to the university, or its security systems and installations;
Disrupting or interfering in any way with the normal activities of the university at any of its campuses – including examinations and tests being written, lectures and tutorials, and the work of the libraries and laboratories;
Carrying out acts or threats of violence against, or causing damage to UJ property, as well as intimidating, threatening, harassing or harming university employees, students and service providers;
Interfering in any way with other people’s freedom of movement while on the university campuses;
Carrying firearms, dangerous weapons, petrol bombs or other incendiary devices or materials; or sjamboks, knobkerries, golf clubs, hammers, assegais, knives or other sharp objects, sticks of any kind at, or within 100 metres of the university property;
Vandalising, damaging property or illegally occupying any buildings or vehicles at the university; and
Interfering with the disciplinary hearings of the twelve (12) students currently on suspension.

Environment behind nearly quarter of global deaths: WHO

ENEVA: One in four deaths worldwide is due to environmental factors like air, water and soil pollution, as well as unsafe roads and workplace stress, the World Health Organization (WHO) said on Tuesday, 15 March.
Environment behind nearly quarter of global deaths: WHO
© Michael Borgers – 123RF.com
An estimated 12.6-million people died in 2012 as a result of living and working in unhealthy environments, 23% of all deaths reported globally, according to the new study.

“If countries do not take actions to make environments where people live and work healthy, millions will continue to become ill and die too young,” warned WHO chief Margaret Chan in a statement.

The report defines environmental causes broadly, drawing links between a long line of environmental risk factors like pollution, chemical exposure, climate change and ultraviolet radiation, as well as access to firearms and more than 100 diseases and injuries.

As many as 8.2-million of the deaths could be blamed on air pollution, including exposure to second-hand smoke, which is responsible for heart disease, cancers and chronic respiratory disease, the report said.

Among the deaths attributed to environmental factors were 1.7-million caused by “unintentional injuries”, including road accidents.

The report also counted 846,000 diarrhoeal disease deaths among environmental mortalities, adding that many were linked to pollution and unsafe drinking water.

The WHO reported 246,000 deaths due to intentional injuries, including suicides, which it linked to the unsafe storage and access to firearms, as well as to pesticides – used in a full third of the world’s suicides – among other factors.

The report found that most environmentally-linked deaths happened in Southeast Asia, which accounted for 3.8-million such deaths in 2012, followed by the Western Pacific region with 3.5-million.

The least affected region was the Americas, with 847,000 deaths blamed on environmental conditions.

Europe had 1.4-million environmentally-linked deaths while Africa reported 2.2-million.

The WHO said that better environmental management could prevent the deaths of 1.7-million children under five, who are especially prone to serious illnesses arising from respiratory infections and diarrhoea.

“There’s an urgent need for investment in strategies to reduce environmental risks in our cities, homes and workplaces,” said Maria Neira, WHO’s public health chief.

“Such investments can significantly reduce the rising worldwide burden of cardiovascular and respiratory diseases, injuries and cancers, and lead to immediate savings in healthcare costs,” she said.