Financial Performance

Financial Performance

INTRODUCTION
Topic 1
Question 1
Considerations when buying an apartment include factors such as location, type (studio, one
bedroom, two or three bedrooms), size (bigger rooms, additional bathroom, balcony), age of the
apartment, and available funds. Information to assist the purchase decision includes whether the
apartment is for residential or investment purpose, personal taste (e.g. interior design, view),
distance to workplace or train stations, funds to meet ongoing costs like repairs and maintenance
required after purchase, body corporate fees, council rates, and insurance. Initial purchase
considerations include whether the apartment is to be purchased outright or through a home loan
taken with a financial institution, stamp duty to be paid, and the eligibility of obtaining first-
home buyer grant from the federal/state government. Purchase considerations and ongoing costs
represent accounting information relevant to the decision-making process.
Question 2
Accounting and management systems have different purposes, different user centers, and
vary in the level of control that can be reported by outside business entities. Management Funds
for construction to produce external user reports, e.g. commercial lenders. These reports are
standard financial reports for reporting entities, and should therefore comply with accounting
standards. all levels of management. Reports are specific objective reports, designed to meet the
specific needs of users of those reports, and the format as well.
The content of the reports depends on who the report is for, and the purpose for which the
report is prepared. While financial accounting, reports can be annual and semi-annual,
management accounting reports are usually requested daily, weekly, monthly, or on demand.
Department The question of whether two separate systems are required depends largely on the
cost of both the financial and financial management systems are based on the accounting
framework, most of its common features. Therefore, a single account system can be used to meet
the requirements of both accounting methods.
Explain the fundamental differences between a single trader (or a single patent), a
partnership with a company. What factors need to be considered in choosing the right design for
Darren's lawn mower business? The three basic elements of a business are:  Craftsmen where
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people run their own business. They would be donating their cash or equity to the business and
they would be lending money in the name of the business in their own name. They will be able to
pay off the outstanding balance of the business and, if they are unable to pay, the bank will be
able to access their assets to pay off the outstanding debt. This business building is suitable for
small jobs with small staff and income. The The sole Trader is solely responsible for the overall
operation of the business and operations. The building works for small businesses that require a
small investment to be set up and have relatively low running costs. Management Partnerships
are two or more people in a business together, operating under a partnership agreement that is
likely to be a formal written agreement. they are more profitable than individual traders because
they have a larger base of marital divorce contributions and are able to share the risks and
obligations associated with starting a business. The partnership is treated as a separate
accounting entity but not a separate legal entity. This means that the underlying assets and
liabilities of the partnership belong to the individual partners in the agreed portion as part of the
partnership agreement. Therefore, if the business is unsuccessful, lenders are entitled to receive
individual assets from their partners in the event that the entity is unable to repay any outstanding
debt. For this reason, a partnership structure is often used where there is a low level of risk to the
business or where the law stipulates that the business should be managed by service providers.
For example, professional work includes accountants and lawyers. A company is a separate law
firm that owns a company called to shares. The owners of the company are known as
shareholders. The beauty of a business structure is that, as a separate legal entity, assets and
liabilities belong to a company. In the event that a business fails to repay its debt, lenders may
only have access to the company's assets to repay the debt. Investments in a company by its
shareholders are limited to shareholder contributions, which means that the shareholder pays the
shares. This business structure is more specific to businesses that need large sums of money has
a large number of executives and employees and has a high business risk. Disadvantages include
high set-up and ongoing costs and a decrease in uncontrolled control over the operation of the
business where shareholders are not directly involved in the activities of the business which
helps for better performance which helps for higher profitability for the businesses.
Question 3
Financial statements are written records that transfer business functions and financial
performance of a company. Financial statements are often audited by government agencies,
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accountants, firms, etc. to ensure accuracy and tax revenue, financing, or for investment
purposes. The financial statements include:
Balance Sheet: It includes the liabilities, assets for the company for knowing its funds which
helps company for better performance which helps for higher profitability for the businesses.
Income statement: It views the expenses, income for the company’s for knowing the profits
which helps company for better performance which helps for higher profitability for the
businesses.
Cash flow statement
1 Income statement
Usually, the first place an investor or analyst will look at is the income statement. The income
statement shows the performance of the business in each period, indicating a very high sales
revenue. The statement then deducts the cost of the goods sold (COGS) for the full benefit. From
there, total profit is affected by other operating costs and revenue, depending on the type of
business, access to lower income - the “basic” business.
Key features:
It shows the income and expenses of the business
Indicated at a specific time (e.g., 1 year, 1 quarter, year and day, etc.)
Uses accounting principles such as matching and accumulating representations (not provided in
cash)
Used for profit testing
# 2 Balance Sheet
The balance reflects the company's assets, liabilities, and equity of shareholders over a period of
time. As is well known, assets should be equal to debt and equity. The asset class starts with cash
and equity, which should be equal to the balance found at the end of the cash flow statement. The
balance then reflects the changes in each major account from time to time. Revenue from income
statement into balance as a change in earnings (for dividends)
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