Financial Analysis Report: Accounting Information System, Revenue Recognition, Liability Analysis

Company’s Business
Financial Analysis
Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Accounting information system ..................................................................................................1
Revenue recognition process and structure of the revenue..........................................................3
Analysis of the liability side of balance sheet and ratio analysis ................................................4
Critically analyse the compensation system and stock compensation plans ..............................7
Leasing environment and types of lease .....................................................................................8
Conclusion ......................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Financial analysis report means the analyses of the financial strength and weakness of the
organizations for communicates the financial health of the company to the shareholders and
investors in order to increase the profit of the company in the future (Akbar and et.al., 2017). It is
also help in expansion of the business in future which help the business to grow. It is helpful for
the investors because through this they decide they take the investment decisions. Through this
individuals make the reports based on the research and investors conduct financial analyst by
gathering the financial information, through calculate ratios and then determine the value. This
report is based on the British Airways which is headquartered in London, United Kingdom.
Company was founded in the year 1974 and its parent company is 'International Airlines Group'.
It is second largest airline on the basis of Fleet size as well as passenger carried. In this report
there is the analysis of the accounting information system and method of the revenue recognition
for the structure of the revenue. Their is the analysis of the ratio also see the result which is best
for the financial analyses.
MAIN BODY
Accounting information system
In the Accounting information system refers to the process or methods that is used to
collect, store, process, manage and evaluation of the financial data which is used by the
managers and business analyst and tax agencies (Białkowski and Perera, 2019). Its is the
documents used by the accountants, consultants, business analyst, managers and auditors for the
analysis of the financial report. In this various software and hardware is used to store and retrieve
the data. In this there are six component is included which is people, procedures, data, software,
instructions and information technology infrastructure. In Context to British Airways they focus
on the one of the accounting information system for the effective working in the economy
(Birch, 2017).
Types of the Accounting Information systems:
 Legacy systems- It can be defined as system which is used by the business by focus on
the information technology in the sophisticated way which is old- fashioned but there are
some advantages is there for the firm which are valuable historical data for the firm and
system which is customized according to the needs of the system. In this there is the
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disadvantage is present which is no documentation (Dichev, Graham, Harvey and
Rajgopal, 2016).
 Manual systems- In this system there is the use of this system by the small businesses
and home based businesses, because it is entire manual in which there is the requirement
of the source document, general ledger, journal and subsidiary journals if there is the
need (Bilgin and et.al., 2018).
 Replacement of the legacy system- In this there is the completely replace of the legacy
systems with the new up -to- date system because it is the quite expensive system which
is used in the procedure called screen scraping, through the new system it helps in
transfer the data and displayed on the computer screen which help in making the different
applications such as inventory, payroll. In the home based variety there is the use of the
accounting information system to keep the competitive in the industry (Drake, Quinn and
Thornock, 2017).
In relevance to British Airways, information technology of legacy system is utilised by an
organization for the purpose of collecting data and for managing the collected information of the
historical data that is essential for the investors for analysing options of investment associated
with entity. Application of this system of accounting information enables firm in customizing the
requirements of business and ensures consideration of operating practices which are unique to
company.
Preparation of financial systems: It is the process of aggregating accounting
information into standard set of financials which is distributed into management, lenders,
creditors and investors for the evaluation of cash flow, profitability and liquidity. In the general
purpose for the preparation of financial statements there is the preparation of the balance sheet,
income statement and cash flow for the purpose of financial accounting. In Context to British
Airways they have to focus on the financial reporting and they prepare their financial statements
at the end of the year in which there is the recording of all transactions such as incoke
statements, statement of retained earning and statement of the cash flow for the making of the
financial statements (Gabor and Brooks, 2017).
Closing and reporting activity there is the recording of the key data which is used for
support the fiscal policy and monitoring the decision making for the preparation of the Generally
accepted Accounting Principle which is produced for the reasonable period. In this there is the
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