Financial Statements Analysis and Interpretation

This assignment presents a comprehensive review of financial statements, encompassing Profit & Loss (P&L) accounts, balance sheets, and fund flow statements. The text analyzes the structure and content of each statement type, highlighting their significance in understanding a company's financial health and performance. It also examines various methods for analyzing and interpreting these statements to derive valuable insights for effective business decision-making.

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3

MFRD
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Scenario 1.....................................................................................................................................4
Identifying sources of finance......................................................................................................4
TASK 2............................................................................................................................................5
Scenario 1.....................................................................................................................................5
TASK 3............................................................................................................................................9
Scenario 1.....................................................................................................................................9
Scenario 2...................................................................................................................................10
Scenario 3...................................................................................................................................12
Scenario 4...................................................................................................................................15
TASK 4..........................................................................................................................................17
Scenario1 ...................................................................................................................................17
Scenario 2...................................................................................................................................19
Scenario 3...................................................................................................................................20
CONCLUSION .............................................................................................................................21
REFERENCES..............................................................................................................................22
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INTRODUCTION
Management of financial resources is the crucial aspect on which organizational success
is based. The organization is required to manage limited financial and human resources
effectually so as to achieve organizational objectives. The present report is based on different
case scenario and accordingly, it covers several sources of finance and their implications on the
overall business. Furthermore, cash budget and ratio analysis as an effective tool to manage the
financial performance of company are used. In addition to this, investment appraisal techniques
are explained along with their application in selecting right project for the corporation. Also,
detailed description has been given for different financial statements.
TASK 1
Scenario 1
Identifying sources of finance
There are number of sources of finance available to a business. The first one is Owner's
capital which is the most effective source of finance which can be used by small business or new
start up. This source is easily available and business can easily access the same in less time span.
The second source is retained profit which already exists in company. It can be used for the
purpose of expansion. However, business can be small or large. Furthermore, sale of old assets is
another source of finance available to existing business and to those who wish to expand their
business in the marketplace. It facilitates to raise quick fund for the purpose of expansion
(Bernstein, 2015). On the other hand, special financial institutions are another kind of source that
is available to a new start up and small business. It aids to raise sources of finance. Similarly,
bank loan is availed to existing organization which is operating at the large level. This is
because; finance is granted to them on the basis of reputation of their business. Apart from this,
leasing companies provide technical assistance to existing or new start up ventures as well as to
large organization. It leads to reduce the financial burden of companies (Chan and et.al., 2001).
In addition to this, issue of shares is available to a large organization that is operating with
minimum specified capital.
Implication of sources of finance
6

There are several implications of sources of finance which affect the performance of an
organization. For example, retained profit incurs opportunity cost whereas bank loan generate
need of interest. On the other hand, issue of share is long procedure and also, dilutes the control
of business. Similarly, sale of fixed assets is that source where assets are sold with immediate
effect (Cox and Fardon, 2003). Owing to this, it might be possible that assets are not valued at
real price. Furthermore, leasing companies also charges for additional services as well as interest
or rent of assets. In addition to this, special financial institutions interfere in the decision making
process of the corporation and also takes extensive time in giving finance. In addition to this,
bank loan requires per month interest and in case of default in payment, company's credit rating
may be affected. Similarly, owner’s capital also requires certain rate of interest and payment of
full amount in case of emergency issues. This aspect creates insecurity for business in long term
but assist firm at the initial stage.
Appropriate source of finance for three different cases
Case 1: Small business start ups
The appropriate sources of finance for small business start-up are owner's capital and
special financial institutions. It facilitates to provide long as well as short term sources of finance
so that business can be started in less time span. It depicts that owner's capital and special
financial institutions are effective sources for starting a new business. Here, personal saving is
7

another source of finance which can be arranged in less time. On the other hand, special financial
institutions provide appropriate finance to corporation. It enables the management to start a
business in short time in order to fulfill their pre-defined objectives. Similarly, it becomes less
risky to access owner's capital so that business can easily start its operations.
Case 2: Large business expansion
Under this, large business can access bank loan, leasing companies and issues of shares.
These sources prove to be effective to enhance the overall sources of finance which then
contribute towards achieving objectives (Cox and Fardon, 2003). For the expansion of large
business, management tends to focus on issue of shares. However, it takes extensive time to issue
of share but proves to be risk free. This is because; in case of issue of equity shares; company
does not require to pay its return among shareholders when it go through loss. On the other hand,
leasing companies provide technological assistance so that expansion can be done in less time
span. Apart from this, bank loan is also another source for large business as it is easy to be
accessed. However, credit rating of corporation has a direct impact on different sources of
finance.
Case 3: Small group of people
This is another form of business wherein owner's capital and special financial institutions
are appropriate sources of finance. This leads to provide support for corporation to start business
on right time. Such kind of businesses operates at a very low level where finance can be acquired
through self help group and owner's capital. In this regard, special financial institutions also play
a vital role but they require detailed information regarding project to be completed by small
group of people. Furthermore, owner’s capital is another most convenient source that facilitates
to start the work on right time.
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TASK 2
Scenario 1
Analyze the cost of different sources of finance
There are several kinds of cost involved in different sources of finance. Here, issue of
share generate need to pay dividend on right time. However, it depends on company that what
kind of shares should be issued. For example, equity shareholders do not need to pay dividend in
case company has loss. On the other hand, preference shareholders require payment of dividend
on right time. Furthermore, interest is paid for credit finance taken from bank or any other party
(Dransfield, 2004). In case if loan is not paid on right time then it will be cost again for
reputation of the same. Apart from this, leasing companies charges interest and addition charged
in the form of rent. Company also needs to bear cost of machine while it is in use. For example,
management needs to ensure proper maintenance of machine. Similarly, depreciation cost is also
paid by the corporation in accordance with the set schedule. It can affect the profitability of firm
because a certain proportion of profit is deducted from profitability of each year. On the
contrary, retained profit includes cost forgone from one alternative which in turn starts a new
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business that has to arrange other sources to maintain existing business activities. At this
juncture, organization needs to assess that which option is best and where the retained profit is to
be used. However, even at the selection of best option, company incurs opportunity cost which
affects the future business activities.
Importance of financial planning
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Financial planning is very important for an organization because of following reasons-
 To access cost effective sources of finance-With the help of proper financial planning,
organization can easily access cost effective sources of finance as per the requirement of
business.
 To reduce uncertainty-Financial planning consists of different activities like budgeting
and selection of right project through investment appraisal techniques. It aids to reduce
uncertainty and support management in achieving the organizational objectives.
 To allocate resources-Financial planning contribute towards allocating different financial
resources in accordance with the business activities. However, focus is laid on factors
like cost reduction, high sales turnover and great profitability.
 To making investment decision-It is the only financial planning by which management of
corporation takes investment decision. It proves to be effective in investing additional
profit into some other effective projects. This facilitates to enhance the overall rate of
return.
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 To keep balance among cash inflow and outflow-By gaining proper information related to
uncertainty and planning for the finance, accordingly, it proves to be effective in keeping
balance among cash inflow and outflow (Dada, Azim and Ullah, 2014).
All of the above aspects are ensured with the help of proper financial planning. This
proves to be effective to determine long run success of the firm.
Types of financial information required for decision making
For taking decision, various kinds of financial information are required to management of
the organization. This entire information is extracted from number of financial statements. For
example, liquidity by which company can pay its suppliers in order to maintain flow of
production. It leads to provide good quality of services and products to consumers. Furthermore,
profitability information is required in making investment decision (Kawai Mayes and Morgan,
2012). Other related information regarding earning per share and solvency are some of the key
information which helps stakeholders to take right decision in context of large organizations.
Thus, all of these decisions facilitate to enhance the sales turnover, access suitable source of
finance and reduce the cost of production. Stakeholders of corporation consist of shareholders,
customers, employees, government and suppliers as well as creditors. All these parties are
associated with company and want to access important information related to the same. For
example, customer access information related to new product and special offers where
government requires details related to payment of tax. Also, government wants to assure that
whether organization comply regulatory framework in a right manner or not. In addition to this,
employees seek information related to growth and prospective of firm which leads to ensure their
own growth at the workplace. Apart from this, creditors access financial statement of
organization in order to derive information with regard to profitability, solvency and liquidity.
Accordingly, they make investment decision.
Impact of different financial sources on financial statement and Sample profit and loss
account and balance sheet
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Illustration 1: P & L Account
(Source: Profit and Loss Account, 2015)
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Illustration 2: Balance sheet
(Source: Morana, 2014)
Sources Profit and loss Cash flow statement Balance sheet
Owner's fund - Effect on balance
sheet's liability side
Debt finance - Due to payment of
dividend and principle
amount
Increase cash balance
of corporation
Preference share - - Enhances capital
Retained earning Reduces profitability - -
Bank loan Increases cost due to
payment of interest
Payment of principle
amount
Increases cash balance
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TASK 3
Scenario 1
Month Monthly
budget
Cumulative
Budget
Actual
Monthly
Actual
Cumulative Variance
July 230,000 230,000 215,000 215,000 -15,000
August 230,000 460,000 220,000 435,000 -25,000
Septembe
r 270,000 730,000 245,000 680,000 -50,000
October 265,000 995,000 235,000 915,000 -80,000
Novembe
r 265,000 1,260,000 237,000 1,152,000 -108,000
Decembe
r 300,000 1,560,000 270,000 1,422,000 -138,000
January 250,000 1,810,000
February 265,000 2,075,000
March 300,000 2,375,000
April 325,000 2,700,000
May 325,000 3,025,000
June 350,000 3,375,000
Problems faced by ABC Manufacturing Ltd regarding sales budget
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Acceding to the given budget, ABC manufacturing ltd's cash flow as well as sales varies
to a great extent. It has been found that in month of July, it was forecasted that sales will be
230000 but actual sales were 215000. Similarly, it was forecasted in the month of December that
there will be sales of 300000 but the actual sales was 270000. It depicts in every month that there
is huge variation in the sales budget (Pavlatos and Paggios, 2009). Here, it can be said that
management made wrong assumption regarding future sales and hence, there are greater
variation in the sales.
Causes of variation in the sales budget
The main issues behind variation are wrong anticipation, high cost of
production and increased additional expenses. Owing to this, corporation
faced problem in increasing sales turnover and achieving long as well as short
term objectives of the same. However, production is carried out continuously
but organization is not able to achieve the sales target. It might be possible
that demand of products and services is quite less but company is producing
its products at a high speed (Philippon and Reshef, 2013). Thus, in turn,
corporation is having issues in maintaining flow of profitability. Furthermore,
liquidity of corporation is decreasing to a great extent which has negative
impact on performance of the same.
Formal Report for improving sales and cash positioning for ABC Manufacturing Ltd.
To director of ABC Manufacturing Ltd.
Date: December 19th, 2015
The major issue faced by ABC Manufacturing Ltd is related to greater variation in the
actual and expected sales. It shows that prediction related to performance of company is weak.
Owing to this, it is very important to provide guidelines for the management and to enhance the
level of knowledge and skills. It proves to be effective in delivering good quality of services to
large number of buyers. In addition to this, cash flow forecasting is showing downturn trend just
because of high additional expenses. At this stage, corporation should have proper control on
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additional expense. Also, employees should be provided with training to speed up the flow of
production and to reduce the additional cost.
Financial Accountant
XYZ consultancy
Critically evaluating cash flow forecast
The cash budget of company depicts that cost of production is very high due to increasing
expenditure. Cash flow forecast also has variation in each month because in the first month,
revenue was 192000 which decreased immediately in the second month. However, in the month
of May, cash flow increased rapidly and reached to 215000 till next month. After that, decreasing
trend of cash flow can be seen in the budget. At this juncture, company needs to adopt effective
strategies in reducing the cost of production. For example, material management can be
improved so that cost of carrying material will be decreased to a great extent. Similarly,
recycling process can be used in the organization which leads to control additional expenditure.
However, workforce should be competent, skilled and trained.
Jan Feb Ma
r Apr Ma
y Jun Jul Aug Sep Oct Nov Dec
Brought
Forward
40,0
00
Sales 200,
000
300,
000
300,
000
300,
000
250,
000
260,
000
300,
000
260,
000
300,
000
325,
000
265,
000
265,00
0
Total
Income
240,
000
300,
000
300,
000
300,
000
250,
000
260,
000
300,
000
260,
000
300,
000
325,
000
265,
000
265,00
0
Purchases 150,
000
140,
000
135,
000
135,
000
140,
000
130,
000
135,
000
145,
000
140,
000
140,
000
145,
000
145,00
0
Wages 55,0
00
55,0
00
55,0
00
55,0
00
55,0
00
55,0
00
55,0
00
55,0
00
55,0
00
55,0
00
55,0
00 55,000
Rent &
Rates
56,0
00
56,0
00
56,0
00
56,0
00
Light &
Heat
55,0
00
55,0
00
55,0
00 55,000
Advertising 2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0
2,00
0 2,000
Insurances 55,0 52,0
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00 00
Equipment 50,0
00
10,0
00
10,0
00
10,0
00
Vehicles 20,0
00
Directors'
Salaries
22,0
00
22,0
00
22,0
00
22,0
00
22,0
00
22,0
00
22,0
00
22,0
00
22,0
00
22,0
00
22,0
00 22,000
Motor
Expenses
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00 11,000
Sundry
Expenses
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00
11,0
00 11,000
Total
Expenditu
re
432,
000
251,
000
291,
000
302,
000
293,
000
296,
000
292,
000
246,
000
296,
000
297,
000
246,
000
301,00
0
Monthly
Deficit /
Surplus
-
192,
000
49,0
00
9,00
0
-
2,00
0
-
43,0
00
-
36,0
00
8,00
0
14,0
00
4,00
0
28,0
00
19,0
00
-
36,000
Accumulati
ve Deficit /
Surplus
-
192,
000
-
143,
000
-
134,
000
-
136,
000
-
179,
000
-
215,
000
-
207,
000
-
193,
000
-
189,
000
-
161,
000
-
142,
000
-
178,00
0
Scenario 2
There are several investment appraisal techniques used by an organization to assess the
viability of project. Here, ABC Engineering Ltd. is having two options and it is required to select
the best option (Verbeeten, 2011). In this regard, following investment appraisal techniques can
be used- Payback period method-This is the most effective method to assess the project on the
basis of time taken to recover the cost of product. Here, project A should be accepted
because its cost can be recovered in less time span.
Table 1: Payback of project A
Year Project A
Cash flow (£) Cash flow (£)
Initial Cost 450000
1 180000
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2 230000
3 280000
4 120000
Table 2: Payback of project B
Project B
Cash flow (£) Cumulative
value
450000
60000 60000
120000 180000
250000 430000
250000 680000
Option A-2+ (450000-410000)/690000=2.05 yrs
Option B-3+ (450000-430000)/680000=3.02 yrs
 Accounting rate of return- Under this, project which generates high rate of return is
accepted. This depicts that Project A is generating high return as 180% where project B is
generating 150%. It shows that project A should be accepted.
Table 3: ARR of project A & B
YEAR Project ‘A’ Project ‘B’
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1 £ 180,000 £ 60,000
2 £ 230,000 £ 120,000
3 £ 280,000 £ 250,000
4 £ 120,000 £ 250,000
Average rate of return 810000 680000
810000/450000*100 680000/450000*100
ARR 180.00% 150.00%
 Net present value method- This is another investment appraisal technique in which
project is selected based on net present value. The following table is showing that project
A should be accepted as it is generating greater net present value than other project.
Table 4: NPV of project A & B
Year Cash flow
(£) project
A
Cash flow
(£)project B
P.V. factor
@ 6%
Present Value
(£)
project A
Present
Value (£)
project B
1 180000 60000 0.94 169200 56400
2 230000 120000 0.89 204700 106800
3 280000 250000 0.84 235200 210000
4 120000 250000 0.79 94800 197500
Total Present
value
703900 570700
Initial
investment
(450000) (450000)
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Net Present
value
253900 120700
 Internal Rate of return- It is another investment appraisal technique in which two
projects are assessed on the basis of discounting rate. Accordingly, project with high rate
of return is selected in comparison to others. The following table is showing that project
A can be accepted due to high rate of return (Wildavsky, 2006).
Table 5: IRR of project A & B
IRR Project A IRR Project B
Year -450 -450
1 180 60
2 230 120
3 280 250
4 120 250
Internal rate
of return 29.20% 15.02%
Scenario 3
The cost of products is calculated as follows-
Table 6: Cost and BEP
Particular Amount
Variable cost 52.50 + 35.75 + 10.20 = £98.45
Unit cost margin 120-98.45 = £21.55
Contribution per unit 21.55 / 120
0.18 = 18%
Break event point in units 120,000/120-98.45 = 5568 units
Break event (Sales) =£ 120*5568 = 668160
Margin of safety
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Table 7: Margin of safety
Margin of safety (sales) 7500-5568 = 1932 units
Margin of safety per unit = Budgeted
sales – break even sales / Budgeted sales
1932/7500 = 26%
Table 8: BEP in three conditions
Break event point Units
At £ 5 increase in selling price 120000 / 125 – 98.45
120000/26.55 = 4519 units
In case of £5 increase in sales price 120000 / 115 – 98.45
120000/16.55 = 7250 units
In case of increase in the fixed cost by
₤5,000
125000 / 120 – 98.45
125000 / 21.55
= 5800 units
In case of decrease in the fixed cost by
₤5,000
115000 / 120-98.45
115000 / 21.55
= 5336 units
Case of increase in material or labor cost ₤5
per unit
125000 / 120- 103.45
115000 / 16.55
= 7553 units
Case of decrease in material or labor cost ₤5
per unit
125000 / 120- 93.45
125000 / 26.55
= 4708 units
Table 9: Margin of safety per unit
Machine A
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Contribution Per Unit 18%
Break Even Sales unit 5568 units
Break even in £ £668,160
Margin of Safety (sales value) 1932 units
Margin of Safety per unit 26%
Table 10: Profit and loss
Price /
Unit
Total
Revenue
Fixed
Cost
Variable Cost /
unit
Total
VC
Total
Cost
Profit/
Loss
120 900000 120000 98.45 738375 858375 41625
120 600000 120000 98.45 492250 612250 (12250)
120 960000 120000 98.45 787600 907600 52400
120 1200000 120000 98.45 984500 110450
0
95500
Table 11: Effect of BEP
Actual break even Obtained break
even
Effect
£5 increase in selling
price
5568 4519 Decreas
es
£5 decrease in selling
price
5568 7250 Increase
s
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₤5,000 increase in
Fixed Cost
5568 5800 Increase
s
₤5,000 decrease in
Fixed Cost
5568 5336 Decreas
es
₤5 increase in variable
cost
5568 7553 Increase
s
₤5 decrease in variable
cost
5568 4708 Decreas
es
Scenario 4
The given scenario is showing that corporation will allow for discount in order to push
sales in the marketplace. The calculation of cost is done for each option as follows-
Southwood Electricals – order for 500 units at a discount of 15% on the normal selling price.
Table 12: Cost on 15% discount
Actual Sales 7500 units
Price per unit £150
Revenue £1125000
Additional demand 500 units
Price per unit (discounted
at 15%) £127.5
Additional revenue £63750
Total Revenue £1188750
Fixed Cost £250000
Variable cost (87.5 per
unit) £700000
Total Cost £950000
Profit/loss £238750
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According to the above table, at order of 500 units, there will be additional revenue of
£63750. Further, total cost will be incurred by £950000 along with the variable cost of £700000.
Westbrook Engineering – order for 1000 units at a discount of 25% on the normal selling
price
Table 13: Cost on 25% discount
Actual Sales 7500 units
Price per unit £150
Revenue £1125000
Additional demand 1000 units
Price per unit (discounted at 25%) £112.5
Additional revenue £112500
Total Revenue £1237500
Fixed Cost £250000
Variable cost (87.5 per unit) £743750
Total Cost £993750
Profit/loss £243750
According to the given scenario, there will be changes in profitability and hence,
£112500 will be additional revenue with variable cost of £743750. It shows that company should
accept the proposal so as to enhance the overall rate of return and competitive edge of the same.
TASK 4
Scenario1
Accounting terminology & Financial statements
The accounting terminology is used while making transaction of daily business activities.
It proves to be effective in keeping financial statement of corporation so as to fulfill the demand
of stakeholders. Thus, different financial statements are prepared to meet the expectations of
parties involved in the business (Bernstein, 2015).
Profit and loss account
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It is the basic financial statement wherein entries are made regarding the business
transaction. It consists of information related to direct or indirect income as well as expenses of
company. Terminologies used in the same are commission, sales, raw material and revenue.
Balance sheet
This is another imperative financial statement which consists of two main head such as
assets and liabilities (Chan and et.al., 2001). Here, assets side consists of debtors, both tangible
as well as intangible assets. The terminologies included in balance are assets, liabilities and
owner's capital.
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(Source: The Beginners Guide to Balance Sheet, 2015)
Cash flow statement
This is another statement which provides information about the cash and cash
equivalents. Terminologies included in the statements are income from financing, operating and
investing activities (Cox and Fardon, 2003).
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Illustration 3: P & L and balance sheet

Scenario 2
(Source: Format of a Financial Statement, 2013)
The financial information is collected from primary records wherein daily business
transactions are recorded. Here, the prime entry depends on following entries-
 Real account- Debit what comes in and credit what goes out
 Nominal account -The expenses and losses are debited where all income and gains are
credited (Dransfield, 2004). Personal account - Receiver is debited and giver is credited
Ledger
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Illustration 4: Fund flow statement

It is the book of prime entry wherein account department made entries for each individual
account.
Trial balance
This is another imperative statement which proves to be effective to check the balance of
both debit and credit. This facilitates to check the correctness of account.
Differences between the financial statements of different businesses
There are main three types of businesses which own their business and include sole
traders, partnership and limited companies. The first statement is related to sole trader which
simply makes profit and loss account. The main purpose of sole trader is to cater own
requirement and enhance profitability (Morana, 2014). On the other hand, in partnership
organization, all partners make partner's account at first so as to divide profitability among them.
On the other hand, limited companies follow the guidelines specified by IFRS and GAAP in
order to prepare its financial statements. It shows that sole trader tends to adopt simple financial
statement in accordance with the requirement of business because it does not serve different
stakeholders like public limited organizations. On the other hand, unlike limited liability
organizations and partnership businesses have to prepare profit appropriation account and other
related accounts of all partners. It depicts that all businesses have different requirement and
accordingly, they prepare financial statement. In addition to this, formats of financial statements
for different businesses are already prepared which gives a clear understanding of the same.
Scenario 3
Table 14: Ratios
Ratios Formula 1995 1996
Liquidity Ratios
Current Ratio Current assets / current
liabilities
20000/600 =
3.33
54000/2500
0=2.16
Quick Ratio Current assets - closing 20000- 54000-
29

stock / current liabilities 7000/6000=
2.1
18000/2500
0=1.44
Activity Ratios
Fixed assets
turnover Ratio
Net sales / Fixed assets 120000/150
00=8
200000/120
00=16.6
Total assets
turnover Ratio
Net sales / Total sales 120000/350
00=3.43
200000/660
00=3.03
Profitability Ratios
Gross Profit Ratio Gross profit /Net sales *100 40000/1200
00*100=33.
3%
35000/2000
00*100=25
%
Net Profit Ratio Net profit /Net sales *100 30000/1200
00*100=
25%
35000/2000
00*100=17.
5%
 Liquidity ratio- Current ratio of organization is not appropriate in both years. This is
because ideal ratio is 1. It is showing that corporation keeps enough liquidity which can
create problem in managing business activities in the near future. On the other hand,
quick ratio is lower than previous year which shows that company has capability to
convert its assets into cash. However, during financial year 1995, corporation has more
power to meet its obligation than current year. Activity ratio- Fixed assets turnover ratio of corporation in 1995 was 8 which was
increased in the next financial year by 16.6. This reflects that company is using its fixed
assets in a right manner so as to enhance sales turnover. On the other hand, total assets
turnover ratio was much better in the previous year. According to this, it can be said that
financial performance of corporation is better in the previous year.
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 Profitability ratio- Gross profit ratio in 1995 was 33.3% which decreased in the next year
by 25%. On the other hand, net profit ratio in 1996 was 17.5% which was 25% in 1995. It
is showing that corporation was performing relatively well in the financial year 1995.
CONCLUSION
The aforementioned report concludes that different financial sources which determine
long run success of the firm. It can also be said that cash budget is the effective measure to
control the cash flow and increase overall rate of return of corporation. In addition to this,
investment appraisal techniques lead to assess the viability of project.
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