Assignment on Managing Financial Resource
Added on 2020-01-16
12 Pages3404 Words167 Views
MANAGING FINANCIALRESOURCES
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Difference between a limited and a non-limited company along with requirements for theend of financial year...............................................................................................................11.2 Cash flow, profit and loss account, retained earnings account, balance sheet and theirimportance..............................................................................................................................31.3 Identifying potential stakeholders and their relative interest ..........................................5CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONThe main aim and objective of the managing financial resources is to maintain theadequacy level of finance in the company. It also aims to provide information to the non-financial managers with better understanding of terms and techniques of finance, so that theycan communicate more effectively and interpret the reports which are issued by theirfinancial colleagues(Broadbent and Cullen, 2012). The presented report is based on MetroProducts Ltd. It is a British manufacturing company which supplies auto accessories andmechanical security products to retail stores in the UK. So, it is very important for them tomanage financial resources for maintaining the cash balance in company. Present reportcovers differences between limited and a non-limited company and requirements for the endof financial year. It explains the difference between management and financial accounts.Further, the cash flow statement, profit and loss account, retained earnings account as well asthe balance sheet are highlighted. Apart from that, managing the interest of potentialstakeholders of company are discussed in this report.TASK 11.1 Difference between a limited and a non-limited company along with requirements for theend of financial yearThe legal requirements which any company has to comply with otherwise, it will benul and void from the side of law(Renz, 2016). The difference between in the legalrequirements for both the company are as follows:BasisLimited company (Public)Non-limited company (Private)LiabilitiesLiability of shareholders is limitedwith the number of shares.The liability of owners isunlimited as there are onlyprivate members.Paid-up capitalThe minimum paid-up capital is 5lac.Here, it is 1 lac.Minimum number ofmembersThe minimum requirement ofmembers are 7.Here, it is 2.Maximum number ofThere is no restriction for theIn non-limited company, limit of1
membersmaximum limit of members.maximum number of membersare 50.Transferability ofsharesThere is no restriction over thetransferability of shares.There is complete restriction overthe transferability of shares.Issue of prospectusThe issue of prospectus is free.There is prohibition on the issueof shares.Minimum number ofdirectorsThe minimum number of directorsis 3.Here, it is 2.Statutory meetingsStatutory meetings are compulsoryand obligatory.There is no obligation forstatutory meetings.External auditsIt has to audit its financial accountsfrom the external auditor or bygovernment authority.External auditing is optional forprivate companies.The given company is a limited company so the legal requirements for MetroProducts for the end of the financial year are needed to maintained financial statementswhich includes income statement, cash flow statement, balance sheet, disclosure notes andratio analysis(Swayne, Duncan and Ginter, 2012). Also, it is mandatory for company to getits accounts audited by the external auditors. These are also presented in front of shareholdersas they have right in the profits of the company. The good financial position and performancethat attracts more potential investors and shareholders. It puts positive impact on the imageand goodwill of the company in the market and this pulls more customers. The financialstatements are also useful for the government authorities, banks, financial institutions etc.Difference between Management accounts and Financial accounts:Basis Management accountsFinancial accountsPurpose of informationIt helps in taking decisions forthe fulfilment of company'sobjectives.It communicates financialposition of company to itsrelated users.Primary usersThese are primarily used byThese are for external users2
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