Business Finance in UK Listed - UBER
15 Pages3760 Words125 Views
Added on 2021-01-01
Business Finance in UK Listed - UBER
Added on 2021-01-01
ShareRelated Documents
Business Finance
TABLE OF CONTENTSPART 1.................................................................................................................................................3Executive summary..............................................................................................................................3MAIN BODY.......................................................................................................................................31- Explain:....................................................................................................................................3a. Meaning of profit and Cashflow and difference between the both..........................................3b. Meaning of Working Capital, Receivables, inventory and payables.......................................4c. changes in working capital impacts the cash flow...................................................................52) Working capital management influence the financial results of the firm..............................53) Steps to be taken to improve company’s cash flow through better working capitalmanagement.................................................................................................................................5CONCLUSION....................................................................................................................................6REFERENCES.....................................................................................................................................7PART 2.................................................................................................................................................8EXECUTIVE SUMMARY..................................................................................................................8MAIN BODY.......................................................................................................................................81) Financial ratios.........................................................................................................................8b) Calculation of ratios.................................................................................................................9c) Interpretation-.........................................................................................................................112) Assessment of financial performance-...................................................................................12CONCLUSION..................................................................................................................................13REFERENCES...................................................................................................................................13
PART 1Executive summaryBusiness finance is that business activity which is concerned with the acquisition andconservation of capital funds in meeting financial needs and overall objectives of the businessenterprises. Present study based on Uber tool limited which deals in producing power tooland Madagascar industry limited which is a UK listed company deals in gems and jewellerysegment. Further it explain the working capital management and financial ratios.MAIN BODY1- Explain:a. Meaning of profit and Cashflow and difference between the bothProfit- The surplus that is realized when the revenue exceeds the expenses, taxes and costs ofthe business. It is the difference between total revenue and total costs. Profit is a residualincome, so its size varies (Connolly and Jackman, 2017). Profit may be zero or even negative.It is the financial gain that is used for the purpose of further investment. Higher profits leadsto the growth of the business.Cash-flow- It is defined as the summary of receipts and expenditures of cash for a particularperiod. Cash-flows are the cash inflows and outflows of the Uber Tools Ltd. Increase in cashand cash equivalent reflects the inflows while decrease in cash and cash equivalent reflectsthe outgoing of cash from the business (Roberts, 2015). These statements are prepared as perthe Accounting standards 3. It enables the firm in knowing the cash position of its business.Difference:- ProfitCashflowIt is the money left after the payment of allthe expenses, taxes and costs.It represents money from several sources.Profitability indicates the growth of theUber tools Ltd.Cash-flow states the operating, investingand financing activities of the company.It is not critical to the firm’s survival.It is critical for the firm’s survival.It reflects the financial performance of thebusiness.It demonstrates the cash position of theenterprise.
b. Meaning of Working Capital, Receivables, inventory and payablesWorking Capital- It is that capital which is involved in the current assets of thebusiness. It is the capital which is required to meet the day-to-day expenses of the entity.Working Capital includes those assets and liabilities which can be converted into cash withinone year. Net working capital is the difference between the current assets and currentliabilities (What Is the Meaning of Business Finance,2019). Current assets include the cash,receivables and inventory etc. while current liabilities includes the creditors, payable andoverdraft. It is essential for every organization to manage its working capital effectively andefficiently to reach the sound liquidity position and to achieve higher profits. Receivables- Account receivables are the asset accounts representing amount owed tothe firm as a result of the sale of goods or services in the ordinary course of business(Mathuva, 2015). It represents the claims of the firm against its customers and iscarried to the “asset side” of the balance sheet under the titles such as billsreceivables, customer receivables or book debts. It is the result of extension of creditfacility to the customers for a reasonable period of time in which they can pay for thegoods purchased by them. Accounts receivables are created because of credited sales.Hence, the purpose of receivables is directly connected with the objectives of makingcredited sales.Inventory- It means stock of goods, or a list of goods. It may include raw material,work-in-progress and finished goods. A stock of items held to meet future demand.Inventory is a list for goods and materials that are available as stock by a business.Inventory management is important for the firm to attain and uphold an optimalinventory of goods while also taking note of all orders, shipping, handling and otherassociated costs (Connolly and Jackman, 2017).Payables- Accounts payable is the amount owed for the purchase of goods or servicesat a specific date. It is the money that a company owes to vendors for products andservices purchased on credit extended in the normal course of business. Supplieroffers credit to their customers, which is an arrangement of payment to pay for aproduct or service after it has already been received. Payables are presented as currentliabilities under the liability section of the balance sheet. It represents a negative cashflow for the company. It is considered as the short term credit extended to thebusiness expected to be fulfilled in less than a year.
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
(solved) Business Finance - PDFlg...
|11
|3638
|404
Business Financelg...
|11
|3198
|89
Financial Performance of the Company Assignment - Uber tools Ltdlg...
|11
|3315
|452
Basic Finance Terms and Working Capital Managementlg...
|13
|3181
|30
Meaning of profit and cash flow in business financelg...
|12
|3434
|325
Business Finance Module - Assignmentlg...
|11
|3255
|490