This report covers topics such as cash budgeting, accounting equation, benefits of having a firm registered with the securities, stakeholders in a large listed company, and the difference between profit and cash. The report focuses on Marks and Spencer, a UK-based retailer dealing in home, food, and clothing items.
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Table of Contents INTRODUCTION...........................................................................................................................3 TASK 1............................................................................................................................................3 Develop a three-month cash budget for the fiscal year that ends on 31 March, 2021...........3 TASK 2............................................................................................................................................5 With help of examples, define Accounting equation.............................................................5 What are the benefits of having a firm registered with the securities?..................................5 Who are the stakeholders in a large listed company like Marks and Spencer?......................7 Are profits an appropriate metric for displaying cash balances? Make a distinction between profit and cash........................................................................................................................9 CONCLUSION..............................................................................................................................10 REFERENCES..............................................................................................................................11
INTRODUCTION Accounting addresses the strategy for recording all of the money related trades associated with the business. There are two parts of this cycle. Introductory one is on cash premise in which simply those things are given importance that have happened in real form of money. The other is accrual basis. In this system, the firm records all the methodology of the firm whether they are on cash or credit. It keeps track on all of the advantages, expenses and hardships close by the assets and liabilities (Bello, Halim and Alshuabi, 2018). In this report, the association picked in this report is Marks and Spencer. It is a UK based retailer overseeing in home, food and dress things. The report is into two areas. First part recognizes the things of money spending plan by recording the exchange it. The resulting part gives explanation of bookkeeping condition close by its working. It moreover finds the partners of given association and checks regardless of whether an advantage is a trustworthy indication of cash close by its qualification. TASK 1 Develop a three-month cash budget for the fiscal year that ends on 31 March, 2021. It is a statement prepared by an entity to predict all potential cash inflows and outflows at a certain moment. It only records the portions that might happen in real currency, and always around the time when it will exist in future money(Fu and et.al., 2020). Cash Budget for the year ending on March 31 ParticularsJanuary (£)February(£)March (£) Receipts Capital10000 Cash receipts from sales1260960885 Receipts from credit sales29402240 Total cash receipts (A)11260003900312500 Payments Purchase of computer720
Motor Vehicle3200 Purchases280015001750 Electricity285 Telephone costs120120120 Fuel costs656565 Drawings800 Total cash payments (B)7705168502220 Net Receipts (A-B)35552215905 Balance brought forward35555770 Balance carried forward355557706675 Working Notes: As per the statement, 30% of totalsales are made with cash, while the remainder 70% are made on credit. The accounts receivable will arrive in the following month. January: Sales =£4200 Cash = 4200 * 30% = £ 1260 Credit = 4200 * 70% = £ 2940 (will be received in February) February: Sales = £ 3200 Cash = 3200 * 30% = £ 960 Credit = 3200 * 70% = £ 2240 (will be received in March) March: Sales = £ 2950 Cash = 2950 * 30% = £ 885 Credit = 2950 * 70% = £ 2065
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TASK 2 With help of examples, define Accounting equation. The 2 different techniques are used in accountancy. It signifies that perhaps the financial actions that ought to be performed out require cash which are funded to the company through someone.The resources could also be transferred by those who are not the corporation's proprietor(Josh Bauerle, 2018). Liabilities refer to the money borrowed in the construction of these resources, which must be repaid by the company. As a result, the formula could now be written as: Assets = Liabilities + Owner's Equity It shows that the sum value of assets has always been equivalent towards the entire value of obligations and equity. These variables vary as a function of company financial transactions, and the resources will be equivalent to the obligation and current ownership based on the change. For instance, Gracy, put £ 200000 into his firm. It also purchased a computer for workplace use with the lending for £ 5000. AssetsCapital + Liabilities 1200000200000 250005000 Total205000205000 The equity of £ 200000 is initiated during first payment, bringing the money and investment accounting equations into balance. However, within next operation, Gracy acquired computer on debt for workplace usage, which boosted its asset while also increasing its liabilities relating to credit purchase. What are the benefits of having a firm registered with the securities? The corporation can trade publicly after being listed on the securities markets. By increasing the organization ’s operational and goodwill, it is possible to raise cash (Li, Goodell and Shen, 2021). It also allows investors to keep track of the borrower's performance in a positive way.
The advantages of becoming registered on a stock market include: Access to cash for growth: One of the most major impediments to a company's growth is a lack of adequate money. Organizations listed company, on either hand, can surely raise funds by selling more shares to external shareholders. The funds raised will be used to further the company's expansion. Disclosure: Each country's financial market is overseen by a public administration, such as with the London Stock Exchange with in United Kingdom. This market operates according to its regulations, as well as the entities in charge of trading stocks, market transparency, and shareholderauthorisation.Thismeanswheneverafiscalcontributorinvestsinthestock exchange, the governing bodies guarantee both their money and its entitlements (Liang and Renneboog, 2021). This protects them against any wrongful actions taken by the organisation to which they have paid. This increases the security of the initiatives and assured of the confidence and assurance that no calamities would occur. Flexibility: The marketplace is challenging for a novice in the capital market, as well as the chances of risksmust be limited. They must invest in conservative equities in order to achieve this. Here is where the stock markets can assist the investor. It allows them to be more adaptable with their estimations. These small investments should be able to make by investing in low- and medium enterprises. Stock do not require a large original investment. Another advantage of buying stocks immediately is that it can be purchased as per the choice of the investor; not any individual isobligated to give a set amount every month. Liquidity: Stocks are considered unstable assets so they can get converted to cash quickly and also have a substantial percentage of purchasers at any given time. Not all resources are of the same nature; some, such as land and buildings, are difficult to sell. To see such a benefit from the assumption, it could take quite a long time. Shares, on either hand, make it significantly less complicated. If the regular number of trades is significant, it can beassumedthat there are a number of buyers and sellers for such particular investment (Liu, 2019). Because the loop will never cease, the liquidity of a capital market is among the most significant benefit for financial supporters. CollateralValueofSecurities:Banksrecogniserecordedsafeguardsassafetyforcredit operations and accept them as deposit. A publicly traded company is also qualified to obtain financial institutions successfully since capital banks value it highly. Furthermore, such a
government can elect to raise extra funds from the people through the elevated recent problem marketplace. As a result, it is still another benefit of publishing. Increased Exposure: Companies that are listed on the stock exchange have more transparency over others. Financial investorsare also more interested in investing in registered groups. If more individuals donate more money, the organisation grows (Mahapatra, Raveendran and De, 2018). Who are the stakeholders in a large listed company like Marks and Spencer? Stakeholders are any group or individuals who can affect or are influenced by the achievement of the organization's goals. It defines partners as any person, organisation, or government that can make a case for its consideration, assets, or yield, or who are influenced by that output. Workers, customers, market and investment investors, suppliers, communities, and governments are all collaborators for Marks and Spencer. Some of these associates are on the inside, while others are on the outside. They are interested in the firm because they would invest their own money in it, and if the business loses money, they will as well. They will also receive any benefits that the company generates, thus if the company generates greater cash flow, so will the owners (Meiryani and et.al., 2021). There are numerous types of proprietorship, such as sole traders, organisations, group proprietors, or the government, but all of these types of proprietors have the same goal in mind: to succeed as a business. Businessmen are the colleagues who have the most influence on the company because they have a say in everything that has to do with it. 1.Customers: Customers are important partners for Marks & Spencer because they are the ones who buy the company's products. Consumers will require excellent things and offers with a wide range of options and choices at a reasonable price. Marks and Spencer monitors the evolution of their products through deals, and they may predict client wants based on deal data. They can reach out to customers, lead evaluations to uncover client demands and preferences, and provide feedback to customers via their Retail Customer Support. 2.Providers: Suppliersare organisations which provide goods or unprocessed components to a company. Marks and Spencer's suppliers are located all over the world, and they want solid agreements as well as reasonable prices for their goods and services (Novak, 2021). The influence of suppliers is determined by their aggregate size and the number of providers available.
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3.Shareholders: These are groups or individuals that have invested in the company by purchasing shares or injecting cash into the company during a difficult period. They are committed to the company's growth and to ensuring that the company generates profits. If things aren't going well, investors will put pressure on the board of directors to adjust their strategies in order to stay relevant (Rotaru, 2019). As a way of keeping stakeholders informed, Marks and Spencer holds yearly normal gathering, events and parties with institution financial investors, and SRI information and data requests. 4.Local communities: Itprovides a client base for sales. They have the power to decide whether a store should be located nearby or otherwise, but when they're not properly trained, they can tarnish the company's brand. Marks and Spencer maintains a strong relationship with the community through tours and conferences, cooperative projects, and associate gatherings, among many other things. 5.Government: It establishes laws and guidelines that govern trading as well as how Marks and Spencer must operate and manage its employees. They ensure that the organisation complies with all applicable laws, including the firm's acts, well-being and safety programmes, and various customs. The government also assures that the company can create additional work opportunities for residents and owes taxation (Scott, 2019). Marks and Spencer organises talks with government officials, speaks with trade bodies, hosts partner talks, and responds to media. 6.Employees: Representatives have an effect on business operations at Marks and Spencer since they attend workplace gatherings where they can express their opinions. If any reasonable idea is expressed, the management and development groups may put it into action. In this way, the agent has some influence in the company. These collaborate with worker's organisations to fulfil various representative requests; both desire a higher income and suitable conditions of employment.
Are profits an appropriate metric for displaying cash balances? Make a distinction between profit and cash. No, profits are not a good predictor of the cash position. The term "cash" refers to the amount of money held in physical form by an organisation and kept in a bank. It comes to the firm in the form of finances, transactions, and revenues, and it goes away in the form of costs, purchases, and payments. When a significant number of things happen or are acknowledged in cash, they are related with money. Profits, on the other hand, are not based on money. The benefit of the accumulation framework is independent of whether or not the events took place in actual money. It simply indicates how an exchange should be associated with a specific time period and should be recorded in records (Webb, 2018). The sections that are associated with cash but are not accounted for in cash are also accounted for in it. Gains are equal to paying short costs, as represented by numerical articulation. In any event, it is impossible to say whether or not these expenses and salaries have happened in the true financial sector. As a result, business profits are unquestionably not a reliable indicator of cash holdings. This means that while a company may appear to have a high level of profits, it may not have a large amount of cash assets. This is only due to the concept of benefits, which includes non-cash exchanges. Distinction among profit and cash 1. Profit includes both money and non-monetary items, whereas cash only includes portions that have transpired in cash. 2. The money balance refers to the amount of money retained by a company after it has paid and received money through various transactions such as contributing, working, and financing. Benefits, on the other hand, are limited to work-related activities. 3. Earnings do not reflect a company's true liquidity; nevertheless, cash reflects and presents a company's cash property and aids in determining its true situation. Overall, it can be concluded that a business cannot rely solely on its net profit; instead, it must give equal weight to its revenue. Ignoring this viewpoint might cause a lot of problems in the workplace.
CONCLUSION According to the preceding study, the double pass architecture has properly dealt with the record of a relatively large number of monetary items. It aids organisations in separating the two-way aspects of their entries. The cash budget created using this methodology aids in determining which transactions can be included and which cannot. The table of offers assists a company in arranging its resources from the general public and stakeholders, as well as analysing the company's financial status. This is because the listed firms must file their financial reports with stock exchange and reveal all relevant data. It is also clear that money and advantages are not synonymous. Both of these concepts have important differences, one of which is the reporting of non-cash transactions in the income statement.
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