Business Finance Report: Assets, Liabilities, Expenses, and Cash Flow

This report provides a comprehensive analysis of business assets, liabilities, expenses, and gains, focusing on the context of a hypothetical business, Shining Shoes. The report defines and differentiates between various types of assets (current and non-current), liabilities (bank loans, mortgages), and expenses, highlighting their impact on a business's financial health. It further explores the importance of cash flow management and offers practical strategies to address potential cash flow problems. These strategies include creating and utilizing a business budget to manage funds effectively and addressing employee-related issues to mitigate fluctuations. The report concludes with a list of relevant references, including books and journal articles, to support the analysis and recommendations.

TASK 5

Table of Contents
TASK 5............................................................................................................................................1
Business assets, liabilities, expenses and gains......................................................................1
Measures to overcome cash flow problems............................................................................1
REFERENCES................................................................................................................................2

TASK 5
Business assets, liabilities, expenses and gains
Business assets: It refers to the piece of property or equipments acquired or primarily
used for business purpose. It includes different categories of assets such as current and non-
current, short and long-term etc. In the context of Shining shoes, human resource, funds, plants
and machinery etc. are their real business assets who supports their existence in the competitive
market (Freilingand Laudien, 2012).
Business liabilities: It refers to the debts or obligations which are arised during course of
busi9ness operations. It can be selled over time through transfer of economic benefits which
includes money, goods and services. In the context of Shining Shoes, bank loans, mortgage or
bills payable are the actual liabilities which must be paid by them in near future so as to achieve
huge sustainability (Shi, 2015).
Expenses liabilities and gains: It is basically incurred by an organisation or money spent
in order to generate revenue . Expenses diminish owner's equity but they are used to generate
revenue. In the context of Shining shoes, loan, rent, salary paid to employees, depreciation on
assets etc. are their real expenses. Whereas gains refers to the increments in the value of assets of
property which can be possible through satisfying the customer which results in increasing the
number of customers. Gains can also be increased by providing discounts to the potential
customers (Lewellen and Lewellen,2016).
Measures to overcome cash flow problems
Create and Use a Business Budget: Owners of Shining Shoes should prepare yearly
budget to see how much funds need to be invested to pay recurring bills so as to build savings in
that from the higher cash months (Venieris, Naoum, and Vlismas, 2015).
Employee Issues in Cash Flow Fluctuations: The owners of Shining Shoes should
conduct meeting with their staff to communicate about the situation of business so that they can
show their willingness to pay cuts or temporary lay-offs (Rigotti,Korek, and Otto, 2014).
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REFERENCES
Books and Journals
Freiling, J. and Laudien, S.M., 2012. Assets or Liabilities of Foreignness? On the Role of TNCs
in International Business.
Lewellen, J. and Lewellen, K., 2016. Investment and cash flow: New evidence. Journal of
Financial and Quantitative Analysis. 51(4). pp.1135-1164.
Rigotti, T., Korek, S. and Otto, K., 2014. Gains and losses related to career transitions within
organisations. Journal of Vocational Behavior. 84(2). pp.177-187.
Shi, S., 2015. Liquidity, assets and business cycles. Journal of Monetary Economics. 70. pp.116-
132.
Venieris, G., Naoum, V. C. and Vlismas, O., 2015. Organisation capital and sticky behaviour of
selling, general and administrative expenses. Management Accounting Research. 26.
pp.54-82.
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