Financial and Business Performance Information

Provide financial and
business performance
information

Table of Contents
INTRODUCTION.........................................................................................................................4
TASK 1..........................................................................................................................................4
Calculation of performance indicator of apple & pear..............................................................4
Analysis financial performance for decision making purpose...................................................5
TASK 2..........................................................................................................................................6
Explanation of main reason for decrement in inventory turnover rate and use of management
policies to overcome this problem.............................................................................................6
Brief description regarding signs which show that business experience liquidity problem......7
TASK 3..........................................................................................................................................8
Given advice to Arctic, ways through which they can minimise their cost...............................8
TASK 4..........................................................................................................................................9
Customer policy use for encourage cash sales...........................................................................9
TASK 5..........................................................................................................................................9
Brief description regarding cost of capital.................................................................................9
Calculation of weighted average cost of capital......................................................................10
TASK 6........................................................................................................................................10
Advice regarding with opting dividend policy to attract customer..........................................10
Advantages of imputation system for residents individuals....................................................10
CONCLUSION............................................................................................................................11
REFERENCES............................................................................................................................12

INTRODUCTION
Finance is essential part of any organization. It is necessary for personal to manage their
financial resource in effective way. This report has been formulated to define the relevance of
tools of financial management for managing and controlling as well as recording and measuring
business performance in systematic way.
TASK 1
Calculation of performance indicator of apple & pear
Performance indicator: This indicator is used by organizations to measure their
financial position for specific time period. Which will useful to find out or evaluate
performance of business entity for specific period of time. There will be various method used
in financial management approach through which manager can interpret their financial perforce,
however most of organization use ratio to calculate and measure their organization's
performance (Agrawal and Smith, 2019).
Ratio, this tool is apply for measuring ration between two variable of financial
statements. Following are calculation of some specific ratio through which investor can
determine which organization is beneficial for the purpose of investment.
Ratio Apple Pear
Particular Formula Amount Ratio Amount Ratio
Liquid ratio Liquid asset /
Current
liabilities
3900/ 4200 0.92 6500/ 10000 0.65
Inventory
turnover
Cost of goods
sold/ Average
stock
25296/ 4000 6.3 22280/ 5660 3.93
Average
collection
period
Average
account
receivable /
Net credit
sales*365
3,900 /
38,000*365
37.46 6,500/
34000*365
69.77

Ratio Apple Pear
Debt to equity
ratio
Total
liabilities/
Total
shareholders
equity fund
7200.../
16000..
0.45 16000.../ 6000 2.66
Return on
shareholders’
funds
Net profit/
Shareholder's
equity
3377.../ 6000.. 0.56 2408 / 2800 0.86
Interest
coverage
EBIT /
Interest
4824..../ 80... 60.3 3,440..../ 680. 5.05
Earnings per
share
Net profit/
Shareholder's
equity
3377.../ 6000.. 0.56 2408 / 2800 0.89
Price/earnings
ratio
Market value
per share/
Earning per
share
$2.80/0.56 5 1.95 / 0.86 2.26
Analysis financial performance for decision making purpose
From the calculation of liquidity, profitably ratio it has been identified that Apple is
comparatively in better position for the purpose of investment. Following are the main reason ,
which describe the main cause of selection of Apple
Liquidity ratio: This ratio is use for calculate the liquidity position of organization.
This ratio help in identifying availability of liquid assets through which organization can fulfil
their current liabilities. In case of Apple liquid ratio is measure at 0.92 and on the other side
Pear's liquid ratio is measure at 0.62 which means that management department of Apple use
their assets in effective manner thus they have sufficient liquid asset for fulfil their day to day
business liabilities (Amalia, Fadjriah and Nugraha, 2020).