Financial Ratio Analysis and Understanding of Financial Information & Management of Cash

Business Finance

EXECUTIVE SUMMARY
Finance is the theory and practice of maximizing wealth through money management,
assessment of money resources, assessment and selecting of sources, fundraising events and
usage, and executive compensation. Currency is the cornerstone of many expressions of business
activity, such as financial investments, property investment, manufacturing, building, sustainable
agriculture, and so on. This report based on Browns plc which is a national grocery chain store
that selling out different types items. This report based on different types of financial ratios that
present actual performance of company and helps to make budget in proper manner.

Contents
INTRODUCTION...........................................................................................................................................3
PART 1.........................................................................................................................................................3
Financial Ratio Analysis............................................................................................................................3
Explain why it would not be as relevant to calculate receivables collection period in this example?.....6
PART 2.........................................................................................................................................................7
Understanding of financial information & management of cash.................................................................7
2.1 Meant of profit and cash flow and their differences.........................................................................7
2.2 Meaning of terms..............................................................................................................................8
2.3 Changes in working capital affect cash flow......................................................................................9
2.4 Traditional alternatives of budgetary systems...................................................................................9
CONCLUSION.............................................................................................................................................10
REFERENCES..............................................................................................................................................11

INTRODUCTION
A company might get money from a variety of places. Every resource has its own features
that must be fully comprehended in order to identify the finest possible revenue streams. Across
all organizations, there is no optimal management source of revenue. The term "business
finance" refers to the use of finances and financing in a company. It also aids in the management
of payments in order to increase the profitability of an organisation by assessing financial results.
Business finance is the branch of individual transaction with the development and preservation
of representing an increase in attempt to reach the funding requirements and long-term goals of
businesses (Ragas and Culp, 2021). Browns Plc, a national grocery chain that sells food,
clothing, and household items, is the subject of this research. This study includes financial ratios
for analyzing a business's current financial status. The second section examines words such as
cash flow, profitability, stock, receivable, and payables, among others. In addition, standard
budgetary procedures used by companies to analyze ongoing development will be discussed.
PART 1
Financial Ratio Analysis
Gross profit margin: The gross profit ratio (GP ratio) is a performance statistic that
indicates how total revenue and actual gross market size are related. It is a widely used tool for
assessing a firm’s operational success. The ratio is calculated by multiplying gross profit by total
income. The gross profit margin is a valuable metric for determining how often a firm is doing
commercially since it excludes the expense during day processes - in other terms, what keeps
data operating - leaving with just a good margin (Nguyen, 2020).
Particulars 2019
Gross profit 1540
Net sales 20510
Ratio 7.51%
Interpretation: According to the aforementioned computation, the business's gross profit
and net sales are required to determine this ratio. This computation shows that in the year 2019,