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Financial Decision Making - Assignment

   

Added on  2021-02-20

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FINANCIAL DECISIONMAKING
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EXECUTIVE SUMMARYFinancial decision making is responsible for decision regarding liabilities, equity and allthe decisions regarding business. It helps company in establishing financial goals andovercoming risk by forecasting the financial statements. It is a crucial part for every company toallocate the funds to different business activities. From the overall report it be said thatEasyflight company has increases its profits by £98 million in 2018. company has good amountof retained earnings though its cash flow showed some ups and down because of company hadpurchased property of £1462 million in 2018. Further manager of company has forecasted thatinvestment of the company in expansion of France. Company has also used some investmentappraisal techniques such as payback period, accounting rate of return and net present valuemethod which has helped company in identifying the duration of project and return oninvestment. For investing in airport retail business company has taken bank loan and used itsretain earnings as a part of investment. Keeping in mind financial factors, company alsoconsidered non-financial factors such as meeting the requirement of current and future trends,developing capability of the business and increase the morale of staff by providing training,reward and involve them in decision making process.
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Table of ContentsEXECUTIVE SUMMARY.............................................................................................................2PART 1 BUSINESS PERFORMANCE ANALYSIS.....................................................................11.1 statement of profit and loss...............................................................................................11.2 statement of the financial position ...................................................................................31.3 statement of cash flows....................................................................................................41.4 market segment analysis:-................................................................................................5PART 2 : INVESTMENT APPRAISAL ........................................................................................62.1 (A)Management forecast..................................................................................................62.1 (B) Investment appraisal techniques................................................................................72.2 Sources of finance.........................................................................................................102.3 Non-financial factors......................................................................................................11REFERENCES..............................................................................................................................131
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PART 1 BUSINESS PERFORMANCE ANALYSIS1.1 statement of profit and lossProfit and loss statement is a report which show the details of profits, loss and direct expenses. Itis one of a primary report in the system of accounting of a enterprise which plays an importantrole in the analysis of financial statement of the company (Carvalho, Meier and Wang, 2016). Inthe Easyflight Plc P&L report show the details of its profit and activities expenses of the firm.on the basis of the given statement it can be analyse:-Revenue:- on the basis of the sales of the both the years 2017 & 2018 sale is increase where thesales of 2017 was 4462 million pounds and sale of 2018 4616 million ponds there is a differenceof 154 million where it is a indication of the companies growth with sales. Also this value showthat the service and goods provided to customers is increase also the revenue generated from nonsales is also increased.Cost of good sold:- cost of good sold means that expanses incurred on manufacturing of goodand services sold it includes material cost, labour. It include direct cost and overhead cost of thecompany. Direct cost contains material cost, purchase for resale and shipping cost. Overheadincludes labour cost, rent, equipment cost. Statement of Easyflight Plc cost of sales decline in theyear of 2018 in respect of 2017 from 1496 to 1475 but the sales is increase which shows that the
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