Financial Accounting Assessment 2

Financial Accounting
Assessment 2

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Overview.....................................................................................................................................3
Balance sheet analysis.................................................................................................................4
Part B...............................................................................................................................................6
Financial statement analysis........................................................................................................6
Overall recommendation.............................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Financial accounting is defined as the overall study of financial transactions related to a
business. It is the process of preparing financial statement like balance sheet, cash flow statement
and income data to analysis performance of the company. This present study is based on Zip Co
Ltd and presentation on strength of financial position of the company. This report will provide
purpose and outline the information required by the users. Further, it will analyse balance sheet
and financial statement with calculations. At last, this report will provide justification and
interpretation on ability of firm to achieve targets.
PART A
Overview
The financial accounting is prepared to evaluate the financial performance of the
company. It is maintained to prepare financial reports that gives overall information about
business stability to parties like creditors, investors, managers, tax authorities. It is helpful to
keep track on financial transactions with the company (Easton and et.al., 2018). It is prepared to
provide information to the users for rational decision-making.
 Management team- It is designed to help managers for decision-making process within
the firm.
 Employees-This is useful for employees to control budgets in the firm (Albanese and
et.al., 2021). It provides accurate data about company's assets and liabilities, profit and
loss.
 Government authorities- This report will be used by tax authorities to determine how
much the company is liable to pay for taxes.
 Creditors- Creditors will require the details whether to extend credit to the business or
not.
 Investors- This report will assist Investors to determine about their investment decision,
whether the investment is profitable or not.
 General public- This report is also maintained by public who have a specific interest in
the business activities.

 Analysts- Investment analysts require detailed financial information to analyse the
competitive performance of business in every sector.
 Debtors- this report is important for debtors to collect information about the ability of the
company to survive and prosper.
Balance sheet analysis
Assets 2020 2019 Changes in percentages
Cash and cash equivalents 32712 12611 159.39
Other receivables 6876 10920 -37.03
Term deposit 1507 1179 27.82
Customer receivables 1116618 647544 72.44
Investment 82930
Investment in associate 1184
Property, plant and equipment 3512 2547 37.89
Right- of- use assets 8160
Intangible assets 25093 5813 331.67
Goodwill 53441 4548 1075.04
Total Assets 1332033 685162 94.41
Liabilities
Trade and other payables 19533 19657 -0.63
Employee provisions 2753 1368 101.24
Deferred R&D tax incentives 392
Deferred contingent consideration 13979
Lease liability 8414
Borrowings 1081954 587445 84.18
Total Liabilities 1126633 608862 85.04
Net Assets 205400 76300 169.20