Business Finance and Economics

Business Finance and
Economics

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
1) Explains the determinants of business performance and differentiate them on the basis of
macro and micro-economics.......................................................................................................3
2) Explain the role of accounting with respect to decision making and reporting within an
organisation.................................................................................................................................4
3) Differentiate between the financial statements and explain the layout and terms used in the
statements....................................................................................................................................5
4)Calculate the following ratios for XYZ Plc with the help of the financial ratios of the year
2019 and 2020.............................................................................................................................7
Define management accounting along with its importance for planning, control and decision
making of a company..................................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The business performance can be estimated on the basis of the financial statement and the
ratios. The concept of accounting helps in preparing these statements (Van Tien, Hiep and Dat,
2019). In this report, the micro and macro economic factors which can affect the business
performance is explained by taking the consideration of XYZ Plc. The significance of the
accounting which can help in the contribution of financial reporting and decision – making. It
has also explained the major difference between the income statement and balance sheet and the
terms which are used in this. The role of management accounting ion the contribution of growing
the organisation XYZ Plc has also been explained.
TASK
1) Explains the determinants of business performance and differentiate them on the basis of
macro and micro-economics.
The performance of any organisation is based on its efficiency and the position
ascertained by the company. Company performs its activities in consideration of internal as well
as external factors which derives the exact position, fulfilment of customer expectation and
offering the best products & services to meet the goals & objectivity. These factors are
controllable and uncontrollable which influences the decision-making of the XYZ Plc. The major
factors which effect the business performance in the macro and micro – economics are:
1. Competition: The existing or new, any type of competitors of XYZ with the selling of
similar products & services must give major effect on each other's corporation in terms of
sales price or quantity or quality or availability of goods. This shows the appropriate
perfection and imperfect market scenarios. Sometimes, they are forcibly do some strategy
for letting down other's working.
2. Technological: The present era is properly depended upon the technical aspects. XYZ
organization also should use the updated tools & techniques for lower cost production
and highly skilled & talented workforce in the firm (Mazza and Wang, 2021). It may
contains the smooth runway of business while taken up important decisions. It is also
helpful for maximise the selling along with its profits to establish the performing activity.

3. Customers: XYZ has slant of the expansive scaling people which can be B2B,
B2C, household or worldwide recognized. They are majorly affected upon the running
concern by deciding their choice of purchasing from the exterior world. These are the
micro-economic factors, as it can be controllable in nature by satisfying their taste
& inclinations without delay.
4. Suppliers: This determinant is comprising the control nature within the market-area to
set up their recognizable proof with various business (Zoia, and et. al., 2018). In
case supplier-person is setting up the restraining infrastructure within the field by
covering biggest region, they can brought up affect upon the execution of
XYZ venture. Since their items & administrations gotten to be centre and vital for
the trade substance.
Economic Factors which affect the competitive environment of XYZ Plc:
These competitive environment consists of the various type of markets such as oligopoly,
monopoly, perfect and monopolistic competition.
1. Exchange Values: The measuring of these figures are based on the import and export
which happens to be fluctuating in the market. Any kind of changing economic value at
the time of sending out and bringing in will specifically influence the company's
competitive advantage of interest because of high and low values in the market.
2. Interest Rate: It is the change from place to place with the individuals. These
evaluations appear uncommonly within the managing an account of the different people
of the residential as well as the worldwide companies (Murtin and et. al., 2018). These
type of rate of the different countries are impactful for its competitive advantage.
3. Recession: It has the possibility to alter the buying behaviour of the clients based on the
demand and supply. In case, it increases then XYZ have to drop out their estimating cost
level. It will effective impact the beneficiary area of the company in the positive or
negative way.
2) Explain the role of accounting with respect to decision making and reporting within an
organisation.
It is a system which is used for measuring and summarizing the monetary activities of the
business. The financial information used for communicating the results to the management to