Business Resources and Financial Statement Analysis

The provided research report discusses the importance of business resources in developing a systematic approach to business development. These resources include human capital, physical assets, technology, and more. The report then delves into the financial statement analysis of a selected company, presenting profit and loss accounts and balance sheets. It aims to take effective decisions and define financial capabilities based on these statements.

BUSINESS RESOURCES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1- Describe the recruitment documentation used in a selected organisation............................1
P2- Describe the main employability, personal and communication skills required when
applying for a specific job role....................................................................................................2
TASK2.............................................................................................................................................3
P3- Describe the main physical and technological resources required in the operation of a
selected organisation...................................................................................................................3
TASK 3............................................................................................................................................4
P4- Describe sources of internal and external finance for a selected business...........................4
Internal Sources:..........................................................................................................................4
External Sources:........................................................................................................................4
P5- Interpret the contents of a trading and profit and loss account and balance sheet for a
selected company........................................................................................................................4
P6- Illustrate the use of budgets as a means of exercising financial control of a selected
company......................................................................................................................................5
P7- Illustrate the financial state of a given business...................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business resources play a vital role to develop business in an effective manner. In which
including human resources, financial resources, physical, technological and so more. All these
help to complete all works and activities relating to the business. Its help to achieve goals and
objectives of the company (Chaffey and White, 2010). The aim of the company is improve all
these resources with proper management systems because these impacting on company's
working performance and systems. HENDY'S Ltd is the car house company in UK. This
company provide better quality of products and services to all customers with proper satisfaction.
For appoint new employees in the company should use effective recruitment documentation that
help to clearly identify skills and knowledge of candidate. Its help to achieve decided targets of
the company.
TASK 1
P1- Describe the recruitment documentation used in a selected organisation
Recruitment is the process in which identify the skills, capabilities and knowledge of
particular persons in which including various methods and techniques those help to take effective
decisions (Montgomery, 2011). There are some recruitment documentation those are used in
HENDY'S Ltd. company those are under the below:
Job Advertisement – It is a notice that jobs put out for the public to see to inform them of a job
vacancy they have open. It includes the job title, requirements, what makes a suitable candidate
and responsibilities. The purpose of this is to promote the job vacancy they have open and to
inform people of what they need to have to be a suitable candidate and make sure people who
apply do actually fill the needs for the jobs.
Job Description – A job description explains what skills employees need to have to get a certain
job. It explains limitations and skills which are needed for the job and the duties and
responsibilities that the employee will have if they get the job. The purpose of this is to inform
the candidate of what they will be doing if they get the job and what they need to do the job.
Person specification-This is an expansion of the job description. This is outlines the training
requirements, grades and personal qualification of the individual to actually be considered for the
job. This is all about skill and the purpose of this is to outline clearly to candidates what they
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must to get the job. This makes it clearer for candidates to see what they need and want in a
person to do particular job (Zikmund and et.al, 2013).
P2- Describe the main employability, personal and communication skills required when applying
for a specific job role
For a particular job require employability, personal and communication skills that help to
achieve organisation's goals and objectives. All these are help to develop business in the
effective manner. In which consider business analysis role for specific job.
Employability: It means the ability of someone to gain a job, retain it and the move on to a
higher stage in their working life. Employability is improved by strong personal and
communications skills which will impress a potential employer. There are many skills and
qualifications needed when applying for a job. Employers will tend to look for how presentable
the employee (well dressed) if they can communicate clearly and if they are able to get on well
with existing employees. They will also need to have skills and qualifications which are relevant
to the job you're applying for. The employer will want to see that the skills of the potential
recruit meet the demands of the job and will benefit the business (Osterwalder and Pigneur,
2010).
Communication skills: In every job you will need good communication skills. You must be able
to communicate well with staff to work effectively, this also includes communicating with other
businesses and organisations, or perhaps with the members of the public, in various formats. This
will include face to face encounters, over the phone, e-mails and letters among other formats.
Good communication skills will enable you to understand, and be clearly understood by, other
people without offending the people you are talking to or confusing them. (Zhong and Yu,2010).
Personal skills: These are also a very important factor in determining whether or not the
business recruits you. For example, you need to be responsible, have a good attitude towards
work and be able to remain calm in a crisis. You should be able to show, perhaps in the form of a
reference from a previous employer, that you are a good health record and that you are reliable,
with all lady and gentlemanly like conduct such as being honest, polite and enthusiastic.
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TASK2
P3- Describe the main physical and technological resources required in the operation of a
selected organisation
In the company having many operations those are help to produce goods and products for
customers. Physical and technological resource are play an important role in the company that
help to fulfil requirements of customers. Every business needs resources, whether it's people,
money, suppliers, or time. The physical resources include tangible items that are necessary and
available for a business to function (Baxter, 2012).
Physical resources: These are necessary for all types of business. Product-based businesses use
physical resources for providing the goods for sale and for the operation of the business. Service-
based businesses use physical resources to facilitate the delivery of the service, such as having a
space to work, tools that are needed for the service, and resources used to support the service. In
which inducing various resources those are under the below:
Material: Materials that are resources are raw goods that will be used in the production of other
products. The cutlery is then a product that is sold in retail stores. The materials are not used for
the operation of the business, but are a good that will be transformed and sold as a new product.
Buildings and Facilities: The physical building you work in is a part of the physical resources of
a company. Whether the space is owned or rented, it is used for the purpose of operating your
business. By having this space available, you are able to complete your work. There are some
occasions when the building and facilities are the revenue generators of the business.
Technological resources: The most important resource of technology is people. Without them,
no product would be formed, and no service would be delivered. People develop tools and
machines, which are used in production such as software and hardware. Their innovative tools
increase the end user’s convenience and drive development, construction, delivery and purpose.
Energy is another one of the most important technological resources. Most forms of technology
rely on energy for power. Machines driven by energy are an invaluable resource in industries that
rely on continuous and mass production.
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TASK 3
P4- Describe sources of internal and external finance for a selected business
For business success require internal and external financial resources. In which these are
help to complete all operations relating to the company.
Internal Sources:
Personal savings: This is most often an option for small businesses where the owner has some
savings available to use as they wish.
Retained profit: This is profit already made that has been set aside to reinvest in the business. It
could be used for new machinery, marketing and advertising, vehicles or a new IT system.
Working capital: This is short-term money that is reserved for day-to-day expenses such as
stationery, salaries, rent, bills and invoice payments (Zott and Amit, 2010).
External Sources:
Shares: Limited companies could look to sell additional shares, to new or existing shareholders,
in exchange for a return on their investment.
Loans: There are debenture loans, with fixed or variable interest, which are usually secured
against the asset being invested in, so the loan company will have a legal shared interest in the
investment. This means that the company would not be able to sell the asset without the lender’s
prior agreement.
Overdraft: A bank overdraft may be a good source of short-term finance to help a business
flatten seasonal dips in cash-flow, which would not justify or need a long-term solution. The
advantage here is that interest is calculated daily and an overdraft is therefore cheaper than a
loan.
P5- Interpret the contents of a trading and profit and loss account and balance sheet for a selected
company
PROFIT AND LOSS STATEMENT
particular 2014 2015 2016
Revenue 41055 45327 51243
Cost of Revenue 33310 36113 40256
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Gross Operating
Profit 7745 9214 10987
Operating expenses
Research and
development 1721 2075 2370
Sales, general and
administrative 4415 4819 5335
Staff cost - - -
Depreciation and
amortization - - -
Other Operating
Expenses 504 199 -1
Total Operating
Expenses 6640 7093 7704
Operating income
before interest and
taxes 1105 2121 3283
Non-operating
income 1029 1150 1315
Income before
income taxes 2134 3271 4598
Provision for
income taxes 136 311 1055
Net income from
continuing
operations 1998 2960 3543
Net Income 1890 2823 3419
Net income
available for
common
1890 2823 3419
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shareholders
Earnings per share
Basic 6.92 10.35 12.57
Diluted 6.89 10.29 12.46
Interpretation of P&L Account
As per the result of profit and loss account of HENDY'S Ltd. There were shows last three
years statements in tabular format, which is categorised into two major parts one is operating
expenses and another one is earning per share of cited company. Last three Revenue of the
enterprise is regularly increase such as 2014- 41055, 2015- 45327 and 2016- 51243. Along with
this gross profit is also increased in last three years 2014- 7745, 2015- 9214 and 2016- 10987.
P&L accounts helps to shows actual and reliable financial position of company as per that will
easy to analyse. Operating expenses refers to, funds are invested in various kind of operations
related to the firm. This company of total operating expenses is 2014-6640, 2015- 7093 and
2016- 7704. Actual income of the organisation is 1890, 2823 and in 2016 is 3419. Earnings per
share is 6.92, 10.35 and 12.57 respectively.
BALNACE SHEET
2014 2015 2016
Assets
Current Assets
Cash, cash equivalents, and short-term investments
Total cash,
cash 14027 15893 15761
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equivalents,
and short-
term
investments
Accounts
receivable - - -
Inventory 3391 4128 5821
Other
Current
Assets 29620 32997 39928
Total
current
assets 47038 53018 61510
Non-Current Assets
Total non-
current
assets 34513 37587 40593
Total Assets 81551 90605 102103
Liabilities and stockholders' equity
Liabilities
Current Liabilities
Accounts
Payable 7094 8295 9533
Taxes
Payable 162 219 321
Current
Debt 28501 34412 39796
Other
current
9091 9363 12103
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liabilities
Total
current
liabilities 44848 52289 61753
Non-current liabilities
Deferred
taxes
liabilities 141 122 124
Long Term
Debt 7255 5645 3105
Other long-
term
liabilities 4831 4557 6378
Total non-
current
liabilities 12227 10324 9607
Total
Liabilities 57075 62613 71360
Stockholders' equity
Common
stock - - -
Additional
paid-in
capital 3785 3785 3785
Other
reserves 20381 21653 23643
Retained 1890 2823 3419
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earnings
Minority
Interests 422 482 152
Total
stockholder
s' equity 24476 27992 30743
Total
liabilities
and
stockholder
s' equity 81551 90605 102103
Interpretation of Balance sheet
Balance sheet of HEDNY'S Ltd., is assist to show actual current assets and liability. As
per that easy to determine how much company liable to pay as well as how much having their
own equity fund. Balance sheet mainly divided into two parts such as current assets and current
liability. Last three years of current assets is 2014- 47038, 2015- 53018 and 2016 – 61510. Along
with this current liability is 2014- 44848, 2015- 52289 and 2016- 61753 as compared with
current assets of this company's result firm is more liable to pay.
P6- Illustrate the use of budgets as a means of exercising financial control of a selected company
HENDY'S Ltd. Company of budget is a financial plan for the future concerning the
revenues and costs. However, a budget is about much more than just financial numbers.
Budgetary control is the process by which financial control is exercised within an organisation.
Budgets for income/revenue and expenditure are prepared in advance and then compared with
actual performance to establish any variances. Managers are responsible for controllable costs
within their budgets and are required to take remedial action if the adverse variances arise and
they are considered excessive (Grönroos, 2010). There are many management uses for budgets.
For example, budgets are used to:
 Control income and expenditure
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 Establish priorities and set targets in numerical terms.
 Provide direction and co-ordination, so that business objectives can be turned into
practical reality.
 Assign responsibilities to budget holders (managers) and allocate resources.
 Communicate targets from management to employees.
 Motivate staff
 Improving performance
 Monitor performance
Break-even point of HENDY'S Ltd is given below:
Contribution= Selling price- Variable cost
Contribution = £20-£9 =£11
BEP (Break Even point) = fixed cost/ contribution
BEP = £5600/£11= £509.09
(A) HENDY'S Ltd company of variable cost is regularly increased but in the profit and loss
account of the company in which increase of loss in starting 5 to 6 years may have some reason
of this situation. After that continuously increase just because changes working system and
investment strategies in the market.
(B) For this company should focus on customer requirements and demand according to them
should provide services and products. Before investing the money in the market company should
properly analyse effectively and future trends also which would help to take better decision
regarding any thing (Hart and Dowell, 2011).
P7- Illustrate the financial state of a given business
Financial statement of HENDY'S Ltd
Margins % of sales 2015 2016 2017
Revenue 100 100 100
Gross margin 33.59 34.78 33.84
Operating margin 20.3 20.76 20.2
EBT margin 19.87 20.02 19.29
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Profitability 2015 2016 2017
Net margin% 15.87 15.96 15.51
Assets turnover 1.8 1.81 1.73
Return on assets% 28.68 28.91 26.83
Return on Equity% 208.75 210.41 154.52
Return on invested
capital%
58.47 56.89 48.78
Interest Coverage 26.97 27.21 21.9
Interpretation
HENDY'S Ltd of total revenue is 2017 is £100, in which gross margin of the company is 33.84
of 2017 and EBT margin is 19.29. On the other hand, net margin is 15.51 of 2017 in percentage,
return on assets is 26.83 and return of equity is 154.52 in percentage. This financial statement
help to define margin of sales in % and profitability of the company in the financial term.
CONCLUSION
As per the above research report, business resources play a vital role to develop business in a
systematic manner. These include human resources, physical assets, technology and so more. All
these help in production process of new products. It represents the financial statement of the
company that help to take effective decision and define financial capabilities of the company. In
this report profit and loss account and balance of selected company is explained.
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REFERENCES
Books and journals
Baxter, R., 2012. How can business buyers attract sellers' resources?: Empirical evidence for
preferred customer treatment from suppliers. Industrial Marketing Management, 41(8),
pp.1249-1258.
Chaffey, D. and White, G., 2010. Business information management: improving performance
using information systems. Pearson Education.
Grönroos, C., 2011. A service perspective on business relationships: The value creation,
interaction and marketing interface. Industrial marketing management, 40(2), pp.240-
247.
Hart, S.L. and Dowell, G., 2011. Invited editorial: A natural-resource-based view of the firm
fifteen years after. Journal of management, 37(5), pp.1464-1479.
Korunka, C., and et.al 2010. Personal characteristics, resources, and environment as predictors of
business survival. Journal of Occupational and Organizational Psychology, 83(4),
pp.1025-1051.
Montgomery, C.A. ed., 2011. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Zhong, M.A. and Yu, L.I.U., 2010. The Effects of Government Intervention and Corporate
Resources on Corporate Diversification. China Soft Science 1, p.014.
Zikmund, W.G.,and et.al 2013. Business research methods. Cengage Learning.
Zott, C. and Amit, R., 2010. Business model design: an activity system perspective. Long range
planning, 43(2), pp.216-226.
Online:
Relevant Resources.2001-2017.[Online]. Available through.<http://www.nfib.com/business-
resources/>. {Accessed on 5th June 2017}
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