Financial accounting theory and analysis

Finance
management

FINANCE 1
Contents
Introduction.................................................................................................................... 2
Purpose of Income statement and financial position..................................................................2
Financial Ratios............................................................................................................... 4
Cash Flow Statement of the company.................................................................................... 7
Marketing Strategies......................................................................................................... 8
Conclusion..................................................................................................................... 9
References................................................................................................................... 10

FINANCE 2
Introduction
The main aim of this report is to demonstrate the ability to apply Financial Management
knowledge. Financial statements have been prepared by the companies to evaluate the financial
position. In this paper, the purpose of financial statements will be discussed. The financial ratio
of the company will also evaluated in order to estimate the financial position of the bank. HSBC
Holding Plc has been taken into consideration to examine the financial statements.
Purpose of Income statement and financial position
The purpose of income statement is to represent the net profit or loss of the organization during
the fiscal year. This statement also helps to examine the expenses and revenue of the
organization. The investors can analyses the financial position by evaluating the profit and loss
of the organization in the financial year (Schroeder, Clark, and Cathey, 2019). This statement
also helps the bank to evaluate the financial situation by comparing the expenses and revenue
from current to previous years. Increasing or decreasing situation of net profit helps to improve
the performance by implementing strategies. According to the income statement of HSBC
Holding Plc, the net profit of the bank is 9725 in the year 2019 (HSBC Holding Plc, 2019a).

FINANCE 3
(Source: HSBC Holding Plc, 2019b)
The purpose of financial position is to estimate the financial status of the organization by
evaluating the amount of assets and liabilities. This statement also states the amount of entity
which is owns by the bank (assets) and how much it owes (liability) and the amount of invested
in the business (entity). The evaluation of assets and liabilities helps the bank to determine the
ability of the organization to pay the short term or long term obligations by using the assets.
Recording assets and liabilities in all years helps the bank to determine the financial status by
comparing the financial situation from the previous years (Accounting Tools, 2019). As per the