Introduction to Accounting and Finance

Introduction to
Accounting and Finance

Contents
INTRODUCTION...........................................................................................................................................3
PART A - Racca Limited................................................................................................................................3
Income Statement...................................................................................................................................3
Balance sheet..........................................................................................................................................4
PART B – Stock stone Limited......................................................................................................................5
(a) Contribution.......................................................................................................................................6
(b) Break even point and margin of safety..............................................................................................7
(c) Calculate profit...................................................................................................................................7
(d) Good strategy for Stockstones Ltd.....................................................................................................8
(e) Identify and explain the underpinning assumptions attached to the break-even model...................8
PART C – Rockham Plc.................................................................................................................................9
Calculation...............................................................................................................................................9
(b) Merits and limitations of different Investment appraisal techniques-.............................................11
(C) Benefits and limitations of using budgets as a tool for strategic planning.......................................12
CONCLUSION.............................................................................................................................................14
REFERENCES..............................................................................................................................................15

INTRODUCTION
Accounting and finance both are important for any business entity to manage operations in
effective manner. The collection and analysis of company operations are referred to as finance
and accounting. Monitoring inbound and outbound network cash flow will help to avoid failures
by allowing creating better decisions. Finance is a wide phrase that encompasses bankers,
finance, finance, stock exchanges, currency, and securities, among other things. Money, banking,
loans, stocks, resources, and responsibilities are all part of financial systems, and finance is
responsible for overseeing, creating, and studying them. Accounting plays a crucial part in the
efficient operation of a corporate organisation by documenting company transactions in a
methodical manner (Li, Ying, Chen and Zhang, 2020). Through systematic preservation of
financial statement and accessibility towards these statements when and where necessary, it also
delivers additional thoughts to organisation and its clients including such borrowers, financiers,
financial regulators, investors, and providers. Accounting is essentially a data management
system. It is essentially intended to assist multiple stakeholders in various decision-making
processes with required, accurate and available details.
PART A - Racca Limited
Income Statement
A profit and loss statement is a statement of a company's taxes and expenditure over a
certain timeframe. A financial statement is also known as a P&L, an income statement, a
statement of comprehensive income, revenue and expense declaration, or a financial outcomes
declaration. The profit and loss statement (P&L) informs managers and shareholders if a firm
made a profit or lost money during the reporting period. The income statement's objective is to
forecast a company's overall condition over a particular time period. Control account, which is
provided by daily diary entries, is used to construct financial reports for a business. Profits,
losses, maintenance costs, variability, operational expenditures, and so on may all be calculated
using an income statement. It's being used to analyse a firm alongside the profit and loss account
statement. The analysis of the income statement allows a business and some other annual
financial readers to determine if the firm is able to market its current products (Wang, Yu and
Zhang, 2019).