Business Report for Manager

BUSINESS REPORT FOR
MANAGER

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................1
TASK1.............................................................................................................................................2
a. Stating the meaning of profit and cash-flows with differences................................................2
(b) Defining working capital and its elements.............................................................................2
c. Assessing how working capital changes affect cash-flows .....................................................3
(ii) Assessing the impact of company’s working capital management on financial results........4
(iii) Analysing ways through which cash flow can be improved using WCM practices ............4
EXECUTIVE SUMMARY.............................................................................................................6
TASK 2............................................................................................................................................7
Monthly Cash Budge for four months from 1st January to 30th April 2021. .............................7
Analysing and recommending ways for effective management..................................................8
REFERENCES..............................................................................................................................11

EXECUTIVE SUMMARY
In Task 1, the key terms in respect to the accounting and finance is evaluated for getting a
basic understanding about the topic. It states about the impact of change in working capital of the
company on its cash flow and recommending ways for improving the working capital
management of Trend Ltd.
1

TASK1
a. Stating the meaning of profit and cash-flows with differences
Profit
Profit is financial benefits obtain from business or trade activities after deducting cost
incurred for it. It is the extra amount which is received on investment which classified as gross,
operating, and net profit. In order to find out profit there is a statement called profit and loss
statement. Which helps in the preparation of balance sheet, fund flow and cash flow statement.
Cash-flow
Cash-flow is a statement which shows all in and out flow of cash for associated with
business activities. There are three type of activities included in cash-flow such as operating,
financing and investing activities. For preparation of cash flow there is need of profit and loss
statement and other financial details likes balance sheet, record of purchase and sale of long term
assets etc.
Difference between profit and cash flow
Basis of difference Profit cash-flows
Usability Profit is useful for any company
but in long term purpose term. So
for year to year is more useful for
investors prospective. More profit
attract more investor.
Cash-flows is more useful for top
management for future goal setting
and decision-making.
Accountability For profit, income statement is to
be prepared which in turn
mandatory for all companies
(Soboleva and et.al., 2018).
Cash-flows is find out from cash
flow statement which is not
mandatory for all companies.
Dependability Calculation of profit is depended
on the ledgers trading accounts.
Cash-flows is prepared with the
help of financial statement.
(b) Defining working capital and its elements
Working capital-
It indicates ability to pay short debt or current liabilities, working capital define liquidity
level what are the sources to pay the short term liabilities that incurred in production activities.
Working capital= current assets-current liabilities.
Receivable-
2