Business Decision Making: Income Statement, Balance Sheet, and Ratio Analysis

BUSSINESS DECISION
MAKING

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................1
MAIN BODY..................................................................................................................................1
TASK 1...........................................................................................................................................1
Profit or Loss account for the year ended 31 March 2020 for Dysn Ltd....................................1
TASK 2...........................................................................................................................................2
Dysn Statement of Financial Position as at 31 March 2020.......................................................2
TASK 3...........................................................................................................................................4
Describing 3 limitations regarding Dysn Ltd Statement of Profit or Loss.................................4
TASK 4...........................................................................................................................................4
Highlighting 3 limitations of Dysn Ltd’s balance sheet.............................................................4
TASK 5...........................................................................................................................................5
CONCLUSION...............................................................................................................................6
REFERENCES................................................................................................................................7
1

INTRODUCTION
Business decision play an important role in deciding the direction of movement towards
success. In the present scenario, it is important to make strategic business decision to get
effectual outcome. The current report will include income statement, balance along with
identification of limitations. It will involve ratio analysis to provide lacking areas in order to
make improvements
MAIN BODY
TASK 1
Profit or Loss account for the year ended 31 March 2020 for Dysn Ltd
Particulars amount Particulars amount
To Salaries and Wages 41,263
By gross
profit 140297
To Advertising 5,478
To Delivery Costs 11037
To Heating and Lighting 12,223
To Rent and Rates 15130
To Insurances 8456
To Depreciation charge
for Fixtures and Fittings 12,584.00
To Depreciation charge
for Motor Vehicles 9,440
To net profit 24,686
140297 140297
Income statement is an important financial statement as it paly crucial role in analysing
earning and expenditure incurred by firm. The above illustrated able shows the net profitability
for the year 2020 which is 24686. There are several expenditures has been incurred by firm to
get good profit margin (Kimmel, Weygandt and Kieso, 2018). It involves advertising, delivery
cost, rent & rates, etc which has contributed Dysn Ltd to attained net profit. Profit and loss
2