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Financial Decision Making Assignment Sample

   

Added on  2021-02-20

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Financial Decision Making
Financial Decision Making Assignment Sample_1
Executive Summary In the first part various financial statements such as Profits and Loss statement, CashFlow Statement and Balance Sheet Statement will be analyzed. Also, Segmentation analysis willbe done on the basis of the performance of the company. In second part the investment appraisaltechnique will be analyzed in which management forecasting along with various capitalbudgeting techniques have been used. The various techniques are payback method, average rateof return and net present value. The company wants to expand in retail airport so the source offinancing will be suggested. The company will also be suggested about the various non financialfactor that should be consider for the development of business.
Financial Decision Making Assignment Sample_2
Table of ContentsExecutive Summary ........................................................................................................................2Part 1 ...............................................................................................................................................11.1 Profit and Loss Statement......................................................................................................11.2 Financial Position Statement..................................................................................................21.3 Cash Flow Statement.............................................................................................................31.4 Analysis of Market Segments' Financial Performance..........................................................5Part 2................................................................................................................................................62.1. a Management Forecast........................................................................................................62.1 b. Investment Appraisals Techniques....................................................................................82.2 Sources Of Finance................................................................................................................92.3 Non financial factor that has to consider in expansion of retail business in airport............11REFERENCES..............................................................................................................................12
Financial Decision Making Assignment Sample_3
Part 1 1.1 Profit and Loss StatementMeaning of Profit and Loss StatementProfit and Loss (P&L) Statement is also known as Income Statement. It is a kind offinancial statement which is prepared by various companies at the interval basis in order to get toknow about the income, revenue, cost and expenditure structure for the whole accounting year(Williams and Dobelman, 2017). Ratios Related to the Profit & Loss Statement and Critical Evaluation of the financialperformance through the analysis of the P&L Statement of the companyThere are three main rations which are based on the company's profit & loss account. These threeratios are as follows in the context of EasyFlight Company -Gross Profit Ratio – Gross Profit (GP) Ratio refers to the ratio which measure the relationshipbetween gross profit and net sales of the company. Net Profit Ratio – Net Profit (NP) Ratio refers to the ratio which measure the relationshipbetween net profit and net sales of the company.Operating Profit Ratio – Operating Profit (OP) refers to the ratio which measure the relationshipbetween operating profit and net sales of the company (Bragg, 2018). Analysis of financial performance of EasyFlight CompanyProfit and Loss Ratio FormulaYear 2017 Year 2018Gross Profit Ratio Gross ProfitNet Sales 3031* 1001535= 1.973211* 100 1736= 1.84Net Profit Ratio Net ProfitNet Sales 443 * 100 1535= .29 (Rounded Off)541* 100 1736= .31 (Rounded Off)Operating Profit RatioOperating ProfitNet Sales 583 * 100 1535= .38 (Rounded Off)690* 100 1736= .40 (Rounded Off)(Net Sales = Gross Profit – Cost of Good Sold, Year 2017, 3,031– 1,496 = 1,535Year 2018, 3,211 – 1,475 = 1,736)From the above ratios, it can be said that After expansion of the business towards France,Easyflight Company's overall sales decreased and expenditures increased. This lead to increase1
Financial Decision Making Assignment Sample_4

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