logo

Financial Decision Making - Doc

   

Added on  2020-10-05

15 Pages4392 Words449 Views
FINANCIALDECISION MAKING

EXECUTIVE SUMMARYFinancial decision making helps in determining the opportunities which consist ofassessing risks and forecasting same along with legal review. This report is totally based on twotasks in which first is for analysing its financial performance and in other part, it has elaboratedinvestment appraisal techniques with funding resources. The present report is giving briefdiscussion about its financial performance in context of various financial statements. Byanalysing its financial position, its liquidity is not performed well and it has raised expenses ofoperations in the year 2017. It is describing proper analysis in context of various segments inwhich it is gaining more revenue in US. On its contrary, it was not capable to generate revenue inAustralia and UK with increment in its cost of sales.

TABLE OF CONTENTSPART 1 : BUSINESS PERFORMANCE ANALYSIS...................................................................1Statement of Profit and loss........................................................................................................1Statement of Financial position...................................................................................................2Statement of Cash flows.............................................................................................................3Segmental Analysis.....................................................................................................................5PART 2 : INVESTMENT APPRAISAL.........................................................................................6Management Forecast.................................................................................................................6Investment Appraisal Techniques...............................................................................................7Payback period...................................................................................................................7Accounting Rate of return.................................................................................................7Net Present value...............................................................................................................8Sources Of Finance.....................................................................................................................9Non Financial Factors...............................................................................................................10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12

PART 1: BUSINESS PERFORMANCE ANALYSISStatement of Profit and lossProfitability Ratio20182017Gross profit31453005Net sales35983437gross margin ratio87.41%87.43%Net profit820887Net sales35983437Net margin ratio22.79%25.81%Operating Income869927Net sales35983437Operating margin ratio24.15%26.97%The above ratios have been used for analysing statement of profit and loss statement ofABC Consulting LLP which is considered as one of the initial reports in every business entity incontext of accounting. It has major contribution for analysing financial performance bycomputing various ratios (Yang and et. al., 2018). It comprises of information in a summarizedformat in relation to expenses and revenue of specific duration. Generally, profit and lossstatements consist of information of yearly and quarterly as well. The main objective of thisstatement is to track earnings of ABC consulting of current year as it excluded all expenses ofbusiness entity from its earnings or revenues. This report starts with entry of total revenue of3598 in 2018 which had been raised from 161 from year 2017. So, by excluding expenses anddisbursements, it is giving gross profit of 3145 and 3005 in 2018 and 2017 respectively. Further, it has considered various operating expenses related to administrative and sellingor it could be justified as expenses which are raised while generating sales and directly linked toadministration of operations is also known as Earnings before Interest and tax. It has generatedearnings from operations as 869 which has been decreased from the previous year. Otherincomes and expenses which were not adjusted in previous year are included in this part such astaxes, interest, dividends, etc. as it would be giving profit after tax which is also known as Netincome. Generally, ABC consulting has not included Earning per share as it could be computedby dividing net profit from total shares which are outstanding (Chen and et. al., 2018).1

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Financial Decision Making - PDF
|20
|4779
|73

Financial Decision Making: Assignment
|16
|4244
|59

Business Finance
|10
|3350
|78

Financial Performance Analysis of BSkyB Plc
|8
|1331
|93

Business Finance: Analysis of Business Performance, Financial Information & Cash Management
|16
|3619
|51

Financial Performance Analysis of Stitches
|4
|507
|334