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Financial Management Activity- Doc

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Added on  2021-01-01

Financial Management Activity- Doc

   Added on 2021-01-01

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FINANCIALMANAGEMENT
Financial Management Activity- Doc_1
Table of ContentsINTRODUCTION............................................................................................................................3TASK 1............................................................................................................................................3Accounting Equation...................................................................................................................3Comparison of balance sheet figures of 2017 & 2018................................................................3Reasons for changes in capital....................................................................................................4TASK 2............................................................................................................................................4Impact of revenue & capital expenditure on profit.....................................................................4Difference among Net Profit & Gross Profit...............................................................................5Difference of Cost of Sales and Turnover...................................................................................5TASK 3............................................................................................................................................6Purpose of cash flow statement...................................................................................................6TASK 4............................................................................................................................................6Measuring performance with benchmarking...............................................................................6Analysis of Companies Ratio......................................................................................................7CONCLUSION ...............................................................................................................................7REFERENCES.................................................................................................................................8
Financial Management Activity- Doc_2
INTRODUCTIONFinancial Management is a activity organisations uses for planning, controlling,managing & monitoring its all financial resources. This report explain accounting report. Further,this report compares balance sheet & capital of Showerpak. Furthermore, this report elaboratecash flow statement & its purpose. Moreover, this report includes impact of revenue expenditureon profits. Further, this report explains limitations & Benefits of benchmarking. TASK 1Accounting EquationAccounting EquationAccounting equation is a base of double entry book keeping system. This principle isused by companies to equate assets & liabilities side of balance sheet thus, it is also known asbalance sheet equation. Both sides of balance sheet (Assets & Liabilities) is to equated to makesure that each transaction has an effect on both side such as debit & credit. Accounting Equationis used by Showerpak Company to balance its assets & liabilities and it also establishesrelationship among assets, liabilities and owners capital(Renz, 2016).Assets= (Liabilities + Equity)By balancing assets & liabilities financial position of company can be evaluated thus,Accounting Equation is beneficial for organisation in their expansion.Comparison of balance sheet figures of 2017 & 2018By analysing Balance Sheet of Showerpak for Financial Year 2017 and 2018 it is figuredit out that financial position of company is strong. As in 2017 Fixed Assets of company was £ 7615 which is increased and in 2018 it is showing a figure of £ 11417 which shows that firmsproductivity & performance its improved which further helps company in enhancing its marketshare & profitability. Further, Balance sheet of both year of Showerpak shows an improvementin Current Assets of company by 56.31% which shows that company has enough liquidity to payall of its liabilities which also strengthen its financial position. Thus, an increase in total assets ofcompany from last year shows that its business is growing and it has an opportunity to expand itsbusiness.
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