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Business's Accounting and Finance

   

Added on  2021-02-20

13 Pages2137 Words53 Views
Business Finance project 3Practical Business Accounting
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1LO 1.................................................................................................................................................11. Producing income and the balance sheet statement................................................................1LO 2 ................................................................................................................................................42.1 Sources of finance for a range of various organisations.......................................................4LO 3.................................................................................................................................................43.1 Measuring the performance of Morrison Ltd using ratio analysis........................................4LO 4.................................................................................................................................................84.1 Analysing the significance of the finance in respect of operating the business organization......................................................................................................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
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INTRODUCTIONBusiness Finance means knowing the requirement of finance in Morrison Ltd. Thecompany needs various such as Profit and Loss account and Balance sheet statement reports inorder to know the requirement of finance for earning higher profits for the company. It coversthe various strategies in order to mange the money either by borrowing loans from outside thecompany or by retaining back all the profits and investing them in company itself. This reportscover various analysis of financial statements in order to know the liquidity and profitabilityposition of the company. The company has also analysed financial statements using ratioanalysis to measure the business performance.LO 11. Producing income and the balance sheet statement.Profit and loss statement- This statement shows the operational profitability of thecompany and states the information relating to sales, operational expenses and the income earnedby the organization. This statement shows the financial status of the company which help theexternal and the internal users in evaluating the performance of an entity. The statement isprepared in compliance with the accounting standards as provided by the IFRS and GAAP inconsideration with all the accounting principles and conventions. 1
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Interpretation- From the above table it has been interpreted that the gross profit ofMorrisons company is increasing over the year that is from 15713 to 16629 which means that thesales has been increased. However, the operating profit reduces because of the increase in theadministrative expenses resulted as 468 in the year 2017 and 458 during the year 2018. Theoverall financial performance of the enterprise is good as the net profits are showing anincreasing trend which clearly states that after paying off all the cost and the tax liability thecompany is earning higher profit margins. Balance sheet- It is the financial statement that provides the details regarding the assets,liabilities and the shareholders' equity of the company. It reflects the financial position of anentity which helps the users in determining the capability of the company in meeting itsobligations. It is also prepared with compliance of all the accounting standards as provisionedwhich clearly depicts the accuracy in the financial information. 2
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