Business Finance: Concepts, Analysis, and Recommendations

Business
Finance

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
PART 1............................................................................................................................................1
(1) Different concepts.............................................................................................................1
a..............................................................................................................................................1
b. ............................................................................................................................................2
c. Changes in working capital impact on cash flows..............................................................2
(2) Application of above discussed concepts in context of Mediterranean Delights Ltd:......3
3. Analysis and recommendations..........................................................................................4
PART 2............................................................................................................................................5
EXECUTIVE SUMMARY.............................................................................................................5
(1) Purpose of preparing budget and different methods.........................................................5
(2) Plan of future cost management........................................................................................6
(3) Traditional and alternative budget system........................................................................7
REFERENCES................................................................................................................................8

EXECUTIVE SUMMARY
As per the above report it is summarises that to operate different business activities
require to finance. The concept of business finance based on the different resources, obligations
and investments (Choi, 2016). There are mainly role played by the managers as well business
operator in order to control various business activities. This report based on the Mediterranean
Delights Ltd which is conducting activities into restaurant chains. This report categorised into
two parts. In first part, shareholders identifying issues in business which is related with the profit,
cash flows, working capital, receivables, inventory and payables. Along with identify the
changes in cash flows that impact on the financial position. At the end provide appropriate
recommendations for better working capital.
PART 1
(1) Different concepts
a.
Profit: Profit is known as financial benefit that arises when the amount of revenue gained
from a business activity is more than the expenses, costs and other taxes. It is the amount of
earning that gain by the business when incomes greater than of expenses in particular financial
year. The financial benefit accomplished when revenues obtained from business operations. The
term of profit use by the business to identify financial status. There are two types of profit like
gross profit and net profit. Gross profit is not defined as actual profit of a business which is
calculating by deduction from COGS and get amount of net sales. Net profit is actual profit
which is differences the revenues and expenses. To calculate net profit apply formula of total
expenses – total income.
Cash flow: It is a financial statement that concise the figure of cash and cash equivalents
entering and leaving an organisation. Through this statement analysis about the cash inflow and
cash outflow of a business in set period of time. It helps to measure how well a business manage
cash availability to paid for debt liabilities and fund for operating expenditures (Berger and
Black, 2011).
Difference between cash flows and profit:
Net profit Cash flow
1