Accounting Fundamentals: Analysis of Financial Performance and Position of Chocco plc

Accounting Fundamentals

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Question 1........................................................................................................................................3
Profit and loss statement for Kedison PLC .................................................................................3
Balance sheet for the year ended.................................................................................................4
Question 2........................................................................................................................................5
Calculation of ratios for Chocco plc............................................................................................5
Commenting on the financial performance and position of Chocco plc...................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Accounting is the process which helps in the recording financial transactions that helps
the business for pertaining of a business. With the help of an accounting process the business can
summarize analyse and report the financial analysis. Accounting fundamentals are the various
different components of accounting such as, recording, summarizing, analysing of assets,
liabilities and owners equity. In this project a profit and loss statement has been prepared for
understanding the financial performance of Kedison Plc has been analysed. This project with the
help of different financial ratios explains the financial performance and position of Chocco plc.
MAIN BODY
Question 1
Profit and loss statement for Kedison PLC
Particulars Amount (in £) Amount (in £)
Sales revenue 826650
Less: Cost of goods sold 578650
Gross Profit 248000
Less: Indirect expenses
Administrative expenditure 30000
Interest paid 4000
Directors remuneration 5000
Distribution costs 28000
Sales commission 3000 68000
EBT 180000
Corporation tax 68000

Net Profit 110000
(-) Preference dividend 30000
Earnings available to equity
shareholders
80000
(-) Ordinary dividend 20000
Retained earnings 60000
Balance sheet for the year ended
Particulars Amount (in £) Amount (in £)
ASSETS
Fixed assets
Plant and equipment 632730
Current assets
Stock 329620
Debtors 171105
Cash and Bank 12900
Total assets 1146355
LIABILITIES
Long term liabilities
4% Debentures 100000 100000
Current liabilities
Creditors 171355
Outstanding commission 3000