Financial Analysis of Melmotte Ltd

MELMOTTE LTD

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
EXECUTIVE SUMMARY.............................................................................................................1
QUESTION 1..................................................................................................................................1
a)..................................................................................................................................................1
b)..................................................................................................................................................1
c)..................................................................................................................................................1
QUESTION 2..................................................................................................................................2
a) Revenue...................................................................................................................................2
b) Goss Profit...............................................................................................................................3
c) Other SPL costs.......................................................................................................................3
d) Operating profit.......................................................................................................................4
QUESTION 3..................................................................................................................................5
a) Non Current Assets..................................................................................................................5
b) Grosvenor’s proposed investment...........................................................................................5
QUESTION 4..................................................................................................................................6
a) Reasons of net cash outflow....................................................................................................6
b) Necessity of outflow................................................................................................................7
REFERENCES................................................................................................................................8

EXECUTIVE SUMMARY
The report is about the analysis of financial performance and position of Melotte.
Company is performing with high growth rate from last year. the financial position of the
company is strong. The analysis is made for checking the viability of investments in company.
investment in company will prove to be beneficial for Grosvenor.
QUESTION 1
a)
i) Description one relates to the Statement of financial position and second one relates to the
statement of financial position.
ii) First statement will be allocated in the liabilities section of the balances sheet under the
noncurrent liabilities. Second statement will be charged as expenses in the profit or loss
statement as the operating expenses or professional fees.
b)
Statement of Financial Position
The statement is prepared for reflecting the financial position of the enterprise. It lists the
items of assets, liabilities and equity of the company. it represents the wealth of the company and
the obligations of company.
Statement of Profit or Loss
The statement is prepared for assessing the results from carrying out the business for a
given period of time. it represents the profits or loss earned after covering all the expenses from
the revenues.
Statement of Cash Flows
It is prepared for analysing the inflow and outflow of cash from the business. This
represents the cash flow from operating, investing and financing activities and the actual cash
available with company at year end (de Assis and et.al., 2017).
c)
i)
As per IAS 2 inventories should be recognised as lower of cost or net realisable value
whichever is lower. Where cost of the inventory is higher than net realisable value it should be
recognised in profit or loss as expense.
ii)
1