Financial Accounting: Ratios Analysis, Income Statement, Balance Sheet, Cash Flow Statement, and Accounting Concepts

Financial accounting

Contents
Section I...........................................................................................................................................1
INTRODUCTION.......................................................................................................................1
Interpretation of ratios..................................................................................................................1
CONCLUSION............................................................................................................................3
Section II .........................................................................................................................................4
Question 1....................................................................................................................................4
Preparation of Income Statement.................................................................................................4
Preparation of Balance Sheet.......................................................................................................5
Identify Five Accounting concepts and explain their meaning...................................................6
Question 2....................................................................................................................................6
Preparation of statement of cash flow..........................................................................................6
Short Memo to Mrs. Harma.........................................................................................................7
REFERENCES................................................................................................................................9

Section I
INTRODUCTION
The fiscal ratios review of ASOS plc is described in the subsequent sections. The
comprehensive balancing statements and revenue account of ASOS PLC were used to calculate
finance indicators such as return on assets, net working capital, and working capital proportions
(Commerford, Hatfield and Houston, 2018). In addition, the study includes a detailed ratios
assessment of ASOS PLC's. The study's main goal is to describe and assess ASOS PLC's fiscal
situation. Asos plc is a global apparel retailer with locations all over the world. Its distinctive
selling point is its user-friendly open-source web application. Asos offers its consumers a highly
comprehensive consumer environment with a choice of well-curated 200 thousand items
acquired from the finest merchants all around the world. ASOS Designer, ASOS Limited, ASOS
4505, and Connivance are among some of the company's in-house clothing companies. Asos is a
customer-centric company which provides industry-leading services, as evidenced by its state-of-
the-art distribution centre in the United Kingdom, France, and the United States, as well as
relatively simple payments and distribution of goods methods. Asos plc owns 896 facilities in
160 nations that allows it to monitor ASOS clothing and cut completion and manufacturing
period. ASOS Designs, ASOS 4505, AsYou, and ASOS Luxury are among its well-known
products and brands. Factory workers trim, stitch, and polish ASOS branded items in the major
manufacturing locations that are subsequently transported to ASOS stores.
Interpretation of ratios
Profitability ratios
 Return on Shareholders’ Funds- It can be said that the ratio is not at a satisfactory
position though it was in the year 2018 but it dropped drastically from 23.25 to 7.3 in the
year 2019, and was recouped back at around 17 percent in the year 2020 and 2021.
 Return on Capital Employed- This ratio of the company is also not in a very good
position as it is declining since 2018 from 22.72 as it was 6.99 in 2019 and 12.52 and
9.39 in the year 2020 and 2021 which is not a good sign for the firm at all.