Financial Analysis of Stratford Yachts Ltd.: A Comparative Study of Profitability and Liquidity

Unit BA4F04 Managing Financial
Resources
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Executive Summary:
The project offers insights into the difference between management and financial
accounting where one is made for internal decision and other for external decision
making, and then it explains the different financial statements which are used in profit and
non-profit organizations. It further explains different stakeholders and the information
required by them form the Stratford Yachts Ltd. Further, there are calculations of
important ratios which show that the company is performing well in most areas. Finally, it
has been recommended that the company should reduce its costs to increase its
profitability and improve its collection period.
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Introduction
The project starts with the difference between management and financial accounts and
then it explains various financial statements of the profit and non-profit organizations. It
further adds the information required by various stakeholders in the Stratford Yachts Ltd.
In the next task calculation of various ratios has been done and a detailed report about
the profitability of the firm has been made. The project ends with a recommendation
which is made to the company.
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Task 1
a. Explain the difference between financial accounts and management accounts.
Basis Management Accounts Financial Accounts
Meaning Management accounts as
the name suggests are
made for the management
of the company. These
accounts assist the
management of the
company in the managerial
decision-making process
(Needles, Powers, and
Crosson, 2013).
Financial accounts, on the
other hand, are prepared
for the purposes of financial
reporting. These accounts
are compulsory to be
prepared by the company.
These are used by the
external stakeholder for the
purpose of the decision-
making process (Needles,
Powers, and Crosson,
2013).
Time period These accounts do not
have any specific tie
period. They are prepared
by the management for
different periods, as the
need be.
These accounts have to be
prepared annually. As
these are used to know the
tax liability of the firm.
These are also used by the
external stakeholders. So
according to the
government guidelines they
must be prepared for
regularly, for the period
specified.
Standards Management accounts are
usually prepared by the
standards specified by the
management of the
Financial accounts, on the
other hand, must be
prepared by the accounting
standards specified by the
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