T3 2019 HC1010: Accounting for Business Decisions Presentation

This presentation, prepared for an Accounting for Business course at Holmes Institute, analyzes the critical aspects of making informed business decisions. It focuses on a hypothetical scenario where Rob aims to purchase a bakery shop in Melbourne with limited funds. The presentation explores two organizational forms: Partnership and Sole Proprietorship, comparing their advantages and disadvantages, particularly in the context of fund-raising. It delves into various sources of funds, including retained profits, support from family and friends, and bank loans, along with the necessary security requirements. Furthermore, the presentation emphasizes the importance of accounting information, such as financial statements (income statement, balance sheet, and cash flow statement) and financial ratios, in assessing a business's financial health. It also highlights the significance of non-financial information, like environmental regulations and social trends, for comprehensive decision-making. The conclusion recommends partnership as the suitable form of organization, given Rob's limited financial resources, and emphasizes the value of a partner's specialized skills and potential capital contribution. The presentation references several academic sources to support its arguments.

ACCOUNTING
FOR
BUSINESS

INTRODUCTION
• The aim of this presentation is to support Rob in taking decision related to
purchasing a bakery shop in Melbourne and starting business with limited
funds.
• This presentation is comprised of brief analysis of available forms or
organization choices, how to raise funds, what security will be provided for
arranging funds, and how financial and non-financial information will help
Rob in purchasing business.

FORMS OF ORGANIZATION
The two forms of organization are recommended for Rob to start with limited
funds that are:
• Partnership - It works as a source of funds in the form of a new business
partner and provide benefit of specialized skill require to run a business.
However, the disadvantage of this is that this is a instable form of
organization (Johnstone, 2012) .
• Sole Proprietorship – In this the advantage is that the owner gets
complete ownership of the business, but the disadvantage is that it has
unlimited liability for the owner (Ward, 2019) .

RAISING FUNDS AND
SECURITY REQUIREMENT
There are different sources of funds that can be used by Rob for starting a
business.
• Partnership – Retained Profits, working capital, etc. (Sarokin and Schulkin,
2016)
• Sole Proprietorship – Sale of assets, support from family and friends for
funds, bank loan, etc.
The security required to arrange funds are collateral assets and detailed
business plan.

ACCOUNTING AND NON-
ACCOUNTING INFORMATION
• The accounting information that Rob require to purchase business is the
clear understanding of the financial statements that is prepared by every
business that is income statement, balance sheet, and cash flow statement.
This is required because it will help in identifying whether or not the
business will make profits. Besides this, Rob needs to have clear
understanding of different financial ratios as it will help in identifying the
profitability, liquidity and solvency position of business.
• The non-financial information that Rob needs to consider is environmental
safety regulations, human rights, and social trends. This information is
required as it will help him in identifying the impact of business on society,
environment, and employees and accordingly will take corrective actions if
any deviations are found.

CONCLUSION
• In the conclusion, it could be said that Job needs to select partnership as
the form of organization as it will help him in getting source of fund for the
business in which he lacks. The partner who will join him in this can bring
funds to start the business and help in taking different important decisions
of the business with his or her specialized skills.

REFERENCES
• Johnstone, S. (2012) Labour and Management Co-operation: Workplace
Partnership in UK Financial Services 2nd ed. Gower Publishing, Ltd.
• Luttrell, C., and Fripp, E. (2015) Lessons from voluntary partnership
agreements for REDD+ benefit sharing 1st ed. CIFOR.
• Permwanichagun, P., Kaenmanee, S., and Naipinit, A. (2014) The Situations
of Sole Proprietorship, E-Commerce Entrepreneurs and Trends in Their E-
commerce: A Case Study in Thailand. Asian Social Science, 10(21), 80-85.

REFERENCES
• Sarokin, D., and Schulkin, J. (2016) Missed Information: Better Information
for Building a Wealthier, More Sustainable Future 1st ed. MIT Press.
• Tracy, J.A. (2011) Accounting For Dummies 4th ed. U.K: John Wiley & Sons.
• Ward, S. (2019) What Is a Sole Proprietorship? [Online]. Available from
https://www.thebalancesmb.com/sole-proprietorship-2947269 [accessed 11
January 2020]