Project Report on Financial Strategy Assignment

Added on - 21 Apr 2020

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Running Head: Financial Strategy1Project Report: Financial Strategy
Financial Strategy2ContentsIntroduction.......................................................................................................................3Capital structure of the company......................................................................................3Advantages and disadvantages.........................................................................................4Matching principle............................................................................................................5Advantages and disadvantages.........................................................................................6Conclusion........................................................................................................................7References.........................................................................................................................8
Financial Strategy3Introduction:This report has been prepared over the financial statements of a company to analyzeand investigate the debt and equity position of the company. In this report, capital structure ofa company has been analyzed and further the pros and cons of the capital structure of thecompany has been described on the basis of their debt and equity position. Further, theaccounting concept has been analyzed and according to the position of the company,matching concept has been analyzed and it has been found that how this concept is helpingthe company to accumulate and manage the materiality concept. More, the advantages andthe disadvantages of the matching principle have been investigated in the concern of thecompany to manage and administer the position and the performance of the company.Capital structure of the company:Capital structure of the company has been analyzed trough investing over theperformance and the position of the organization. Capital structure is the point where the debtand equity of an organization are evaluated and the relations of both the sources areidentified. It is the process which depicts the user about the ideal ratio of the debt and equity.According to the given case, the debt of the company is Euro 28024 in 2014 and Euro28576 in 2013. Further, the equity of the company is Euro 55959 and Euro 53659 in 2014and 2013 respectively. Through these calculations, it has been around that the comapny hasraised its funds 33% though the debt and 67% through the equity. According to it, it isrequired for the company to manage and identify the position and maintain the funds of thecompany through the market position (Kaplan and Atkinson, 2015).Capital structure20142013WeightTotal debt28024285760.33Total Equity55959536590.6783983The above given table depict about the debt position and equity position of thecompany. The debt equity ratio of the company is 1:2 which an ideal ratio is. This ratio depictthat the company has just double amount of total debts that means it is quite easy for thecompany to manage the risk factor as whenever the debt holder would ask for the money,
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