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Financial statement Analysis - Assignment

   

Added on  2021-02-19

10 Pages2314 Words38 Views
Business Finance project 4Understanding FinancialInformation

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1CONCLUSION................................................................................................................................1REFERENCES................................................................................................................................2

INTRODUCTIONFinancial information keeps proper records of the various financial transactions whichhelps management of the organization in giving relevant information for crucial decisionmaking. This report will include key financial ratios by applying it with business performance.This study will also evaluate the management need of financial data. This study also helps inunderstanding the users of financial information. Furthermore, this study highlights the purposeof various financial statements. 2. 1 Legal requirements for different business organization.Sole trader: It is an effective of business structure which is very easy and inexpensive toset up. Sole trader is a business which is completely owned by an individual and does not haveany share in the profit. The management of the company should up to date its profitabilityinformation and also calculate tax for smooth functioning of the business. Partnership: This firm is a business in whicvh group of people or partners come togetherto carry out the business (Qrunig and Qrunig, 2016). Partners of this company share profits andlosses with each partners within specific ratio or share of them in business. There are variouslegal requirement in UK within which it must comply with for smooth functioning of thebusiness. The partners individually assess tax returns in accordance with their share of profits tothe HMRC. It must also pay NIC (National Insurance Contribution). The partnership firm mustalso sign a deed and compalt with various legal requrements such as disclosure of annual returns.Private limited company: This business entity is a private ownership of the business.This company is established for the purpose of making profits which leads to graeter marketshare (Thompson, 2017). The company should comply with various legal requirement of UKsuch as proper records and mainenance of MOA, AOA, copmpany records, corporation tax andproper disclosure of annual reports finacially. Public limited company: This is an organization whose securities are listed on therecognized stock exchange to buy and sell shares. This company is completely regulated byvarious authorities. The company should publish all the financial statemnts aby showing truefinancial position opf the company (Martínez‐Ferrero, Garcia‐Sanchez and Cuadrado‐Ballesteros, 2015). It is there legal requirement to pay tax and disclosr=e true statemnts toshareholders. 1

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