Financial Analysis of Joe's Motorbike Tyres Company

Assessment: BSBFIM601 Manage Finances
Project Report: Manages finance

Assessment: BSBFIM601 Manage Finances
Contents
Introduction.......................................................................................................................3
Financial analysis..............................................................................................................3
Recommendation..............................................................................................................5
Conclusion........................................................................................................................5
References.........................................................................................................................6

Assessment: BSBFIM601 Manage Finances
Introduction:
In the report, Joe’s motorbike tyres company has been evaluated in terms of
measuring the financial performance of the company and the taxation liability of the
company. The case expresses that the company has made numerous changes into the
performance to enhance the level of the company. In the report, financial statement of the
company has been evaluated and financial analysis study has been performed. Financial
analysis is a process which includes various techniques. On the basis of those techniques, the
overall performance of the company has been measured.
Financial analysis:
Financial analysis process evaluates the various projects, budgets, businesses and
other financial related transaction of the business to measure the suitability and the
performance of the business (Brigham & Houston, 2012). It is used to evaluate the liquidity,
profitability, solvency and suitability position of the company. In the report, financial
statement of the company has been evaluates to make a conclusion about the financial
performance of the company.
On the basis of the profit and loss statement of the company, it has been measured
that the gross profit of the company is $ 20,800 and the net profit of the company is $ 5200.
These differences among the gross profit and net profit have occurred due to the huge
operating expenses of the business. In addition, the balance sheet of the business has been
studied and it has been found that the overall performance of the business has been improved.
The total resources available to the company for the future investment and the liquidity
position are $ 54820. However, the total liability of the company is just $ 9620. It explains
that the company has raised the funds from the owner’s fund rather than the borrowings from
the market (Arnold, 2008).
It has also been found on the basis of the cash flow statement of the company that the
total cash flow at the end of the year is positive which explains that the cash outflow of the
company is lower than the cash inflow of the company. It has also been studied that the Joe is
ordering the material on credit basis due to which lower working capital is required for the