Financial Report: Analysis of Financial Statements and Ratios

Financial Report

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
TASK 1............................................................................................................................................1
A) Two branches of accounting and explain the difference between the financial and
management ................................................................................................................................1
Journal entry and prepare of trial balance ...................................................................................3
Task 2...............................................................................................................................................8
A. Statement of Profit and Loss and Statement of Financial Position.........................................8
Ratio analysis and interpretation ...............................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12
Books and Journals ...................................................................................................................12

INTRODUCTION
Financial report means report made for the preparation of the financial statements which
is very important for the analysing of the organization performance, through this they determine
the position in the market place through the use of the decision which is make by the manager
after analysing all the balance sheet and income statements. It is the formal records of the
financial activities and position of the business, person and entities. It is made in the structured
way which ids very easy to understand for the investors and analyst. This report is based on the
making of the income statement, making journals and balance sheet (Burkhanov, 2020). There is
the analysis of the ratio for determine the comparison of the two company regarding their
position and performance to convey the financial activities for giving the financial affairs. In this
there is the requirement of the financial statement analysis of the company to determine the
analysis of the company.
MAIN BODY
TASK 1
A) Two branches of accounting and explain the difference between the financial and
management
In the accounting, there is the internal auditor and chief financial officer for evaluate the
positions of the company in the working business. It is used for all branch public sector, non
profit sector and technological developments. There are different types of branch is there-
 Financial accounting- it is the systematic method used for recording the business
transactions for the recording of the accounting principles for calculation of the profit and
loss and accurate picture of the balance sheet during the period which is benefit for the
calculation of the trail balance, balance sheet which is based on the financial accounting
principles. It is useful for the creditors, banks and financial status. It involves recording f
the transactions in a day which is remain in the historical for generating the past, it
involves in generating financial statements which is prepared according to the generally
accepted accounting principles (GAAP) for the calculation of the various tax which is
based on the various bank balances and tax based records. This the external regulations
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for the internal employees to make analyse and make financial decisions for used in the
purpose.
 Cost accounting- Cost accounting refers to the branch of Accounting in which the
estimation of overall level of costs can be done highly effectively and efficiently. Thus in
this way the use of different types of methods can be made so that the costs are reduced
which will help in achieving financial goals and objectives (Farre-Mensa and Ljungqvist,
2016).
Difference between Financial accounting and Management accounting
 Basis  Financial accounting  Management
accounting
 Usage  Financial accounting
puts its focus on
making the use of
financial facts, data and
information so that the
financial goals and
objectives can be
attained.
 Management
accounting ensures that
the use of techniques
and methods can be
made so that the
problems can be
solved.
 Time Period  Financial accounting is
used to examine the
result of the
transactions which
have been done so that
a proper analysis and
interpretation can be
done.
 Management
accounting is used in
order to forecast the
results of the future in
the right manner.
User groups of Financial accounting-
 Shareholders- The shareholders are the users of the information which is provided by
the Financial accounting. Thus in this way they can make sure that they get valuable
insights into the operations and functioning of the organization in the right manner. This
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