Accounting Information Report: Financial Statement Analysis and Trends

This report provides a comprehensive overview of accounting information, covering essential financial statements such as cash flow statements, income statements, and balance sheets. It includes examples and explanations of statistical data, annual reports, and trend analysis. Furthermore, the report delves into the analysis of Boots PLC's financial performance, examining the sector contributing the highest income, different aspects of income contribution, and the performance of various product areas. It also evaluates Boots PLC's market position and conducts a revenue analysis. The report is divided into two sections, the first section providing the description of financial statements and data analysis and the second section focusing on numerical analysis of financial information related to Boots PLC, including its grocers and non-grocers product lines.

ACCOUNTING
INFORMATION

Table of Contents
INTRODUCTION :.........................................................................................................................1
Section 1...........................................................................................................................................1
Cash Flow statement and its example ........................................................................................1
Income statement and its Example .............................................................................................2
Statistical Data and its example..................................................................................................3
Annual Report and its example...................................................................................................4
Trend analysis and its example...................................................................................................5
Accounting Information System (AIS).......................................................................................6
Section 2...........................................................................................................................................7
1. Sector which contributes highest income for Boots PLC....................................................7
2. Different aspects of income contribution of of Boots PLC...................................................8
3. Performance of product areas of Boots PLC..........................................................................9
4) Evaluation of boots market position.......................................................................................1
5. Revenue analysis.....................................................................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION :
Accounting Information means the information regarding the economic transactions of
the company, economic transactions means the transactions which are can be expressed in
monetary terms or are related to inflow and outflow of cash. Moreover in short, the accounting
information refers ton the data which are related to the accounting terminology and with
financial terms. Under the preparation of accounting information the several financial statements
are prepared in order to represent them to internal and external users of the accounting
information (Hall, 2012).
This study is regarding to the accounting information which pertains two sections in
section 1, the description of financial statements and data analysis and section2 contains the
numerical analysis of financial information. Also in contains the description regarding the
accounting information system.
Section 1
Cash Flow statement and its example
Cash flow statement refers to the statement which shows the information regarding
inflow of cash and outflow of cash that is why in accounting terms it is also known as statement
of cash flows. The International Accounting Standard 7 (IAS 7) deals with cash flow statement.
Cash flow statement has its three parts or activities namely; operating activities, Investing
activities, Financing activities which shows the changes in balance sheet accounts and income
affect the cash and cash equivalents and break the analysis down these activities (Simkin,
Norman and Rose, 2014). The statement comprises both accompanying changes in balance sheet
and current operating results. Although the statements shows the liquidity positions of company
which depicts the ability of company to pay bills and determines short term viability of a
company. An example of Cash flow statement is below.
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(Source: Cash flow statement, 2018)
Income statement and its Example
Income statement is one of the most important statements used for reporting the
company's financial performance. It is also known as the statements of “Profit and Loss” or
statement of “Revenue and Expense” in accounting terms. It shows the company's
revenues(which includes the Operating revenue, non-operating revenue and gains) and
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expenses(which includes Direct expenses, indirect expenses and Losses) incurred during a
financial era. Overall it depicts the final Net profit or Net loss incurred during the financial
period, which is to transferable to balance of sheet of that particular financial period, example of
profit and loss statement is below.
(Source: Profit and Loss Statement, 2018)
Statistical Data and its example
“Statistics” comprises with the statistical data which are of different types, numerical
(Continuous and Discrete), Categorical and ordinal. Data may be of different types but statistical
data always be in numerical form and are of two types ;
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Continuous data represents the information in Numerical form not in theoretical form,
measurement that their possible values cannot be counted and can only be explained by use of
intervals on the real number line (Ghasemi and et. al., 2011).
Categorical data represents are in form of theoretical representation not in numerical
form such as gender, martial status, home town etc. the example of Statistical data and its
representation.
(Graphical representation of statistical data, 2018)
Annual Report and its example
Annual report means the final report or the financial report prepared at the end of the end
of financial period, it comprises with the preparation of Balance sheet which shows the final
value of assets and liabilities held with the business at the end of the financial era. Moreover it
has two sides one of assets side which shows current assets as well as fixed assets and second
side shows liabilities that is short term and long term liabilities(includes Equity). Overall, it is
used to show the financial position of the business. The example of balance sheet is below.
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(Balance sheet, 2018)
Trend analysis and its example
Trend analysis is used as technical analysis to make a prediction regarding the future
stock price movement based on the basis of current data observation trend analysis. Trend
analysis comprises with the predictions for future on the basis of past and current records. There
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are three types of trends namely; short, intermediate and long term. The graphical example of
trend analysis is below.
(Graphical form Trend Analysis, 2018)
Accounting Information System (AIS)
Accounting information system refers to the system of collecting, storing and processing
financial and accounting data that are useful for internal and external users to make useful
decisions. Information system is generally computer based for for recording, analysing and
reporting the accounting activities (Ghasemi and et. Al., 2011). The system performs the
functions and activities including auditing, financial accounting and reporting and also perform
functions like management accounting and taxation. There are some advantages and
disadvantages of using computerised accounting software system.
Advantages:
 Speed : It ensures the speed in recording, analysing and reporting the financial
information and ensures transferring the data quickly to its users.
 Access information: by using such accounting software system makes it simple for other
people to access the in formation quickly by using internet it becomes easy to access the
financial information of any company from any where.
 Visual format: By using the Accounting software, it become possible to see the data or
information in different format which is helpful in analysation or evaluation.
 Easy to store: by using the such system it becomes easy to store the past records for
long period by changing the hard disk of computer system.
Disadvantages of using accounting software:
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 Expense: it is true that the use of such accounting software id relatively expensive and
must be updated over a specified period of time.
 Security and performance: computerised software s are unsecured for cybersecurity
issues and can be hacked by hackers easily and system may be affected by virus that
destroys all data also in case of PC's.
 Training: In order to make most effective and proficient use of computerised accounting
software, it is essential to have knowledge about the computer and software. So, training
is important to fulfil this need and it is time consuming and expensive procedure.
Section 2
The Boots PLC produces the Grocers and Non grocers products, under groceries products
it produces the products related to Bathroom or toiletries, hair care(like hair oil, shampoo,
conditioners etc.), Oral care (tooth brush, tooth paste etc.) and under the non grocers products
company produces the products related to chemists(may be Generic or non generic)and other
grocers. and recently increases its sales by £13 million, according to Kantar world panel.
1. Sector which contributes highest income for Boots PLC
According to the chart which sows the income criteria of Boots PLC, the area which
boots the biggest income earned is Bathroom toiletries area as it's growth increased by 2.9%
year on year (YOY) due increase in it's sales by £19.3 million and selling of finished products
increased by £11 m in year 2014. Not only this, the 50.25% income of the all business activities
are earned by sale of bathroom toiletries products and it sales increases year after year although
the company increases the amount of raw material in order to increase the production of the
bathroom or toiletries products, as it will beneficial for company' s earnings in near future and
company wants to take the benefit of this opportunity. Although during period 2012-2013 the
sales of bathroom and toiletries products increased by 0.6% and in next year the sales of
bathroom and toiletries products increased by 4.83 times, means directly 2.9% in year 2013. it
shows that the company has good reputation in stream of bathroom and toiletries products in
competitive market therefore still able to increase production due to continuously increase in
sales. the management of Boots PLC decided to increase the purchasing amount of raw material
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in order to increase the quantity of production and to create Innovations in existing products of
bathroom and toiletries in order to maintains the increment in sales (Caglio and Ditillo, 2012).
Moreover, the other products related to hair care, oral care and some others also
increases the sales of company but not in a same proportion as the sales increases under grocers
products by bathroom and toiletries products. The non grocers products like medicines or drugs
also increases the sales but not small proportion.
2. Different aspects of income contribution of of Boots PLC
Bathroom 50.25% 698
Hair care 18.93% 263
Oral care 16.34% 227
Others 14.47% 201
1389
50.25%
18.93%
16.34%
14.47%
Bathroom
Hair care
Oral care
Others
Above diagram shows the different aspects of income contributed by the grocers
products, under which the highest contribution is made by the bathroom and toiletries products is
50.25% , the contribution made by the Hair care products is 18.93%, the lowest contribution
made by the oral care products that is 14.47% and the contribution made by other grocers
products is 16.34%. the company should increase the production of bathroom and toiletries but,
also create the innovations in oral care and hair care products in order to improve income
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contribution by the sales of these type of products. The company should focus and improve the
workings of research and development (R&D) department in order to create the innovations in
existing products of hair care and oral care solutions and also try to create inventions of new
products to increase the contribution made by the these product lines.
The company should make changes regarding the product manufacturing criteria of hair
care and oral care products and develops new uses of existing products or also create new
products for hair care and oral care product line by the help of effective R&D department in
order to increase the earnings from these grocers aspects in near future. Although company must
increase the production of bathroom and toiletries according to market demand and make
valuable changes new products so that is why they will enable to gain the customer's attraction
and helps in increasing revenues also helps in survival of company in competitive market.
3. Performance of product areas of Boots PLC
The Income contribution areas of Boots PLC comprises with the two types of product
lines namely, Grocers and Non Grocers products . Grocers product pertains bathroom or
toiletries, hair care, oral care and others. The contribution made by the grocers products, the
bathroom or toiletries increases the growth rate by 0.6% in year 2013 and in year 2014 it
contributes to growth increment by 2.9%, it still increases the growth but, not in same proportion
as increased in year 2013 and it contributes 50.25% income earned by the company (Budak and
et. Al., 2011). The remaining products like oral and hair care also contributes the increment in
growth (Sadka, 2011).
The Average prices increases by the 0.2% as in 2014 year it is 0.4% increased. Not only
this the Non grocers products like Chemists (increases the contribution by 0.9%in comparison of
last year 2013), Drug stores contributes less in comparison of previous year as the contributed
rate declines by 0.2% and remaining the hard discounters increases the contribution by0.2% or
other non grocers increases the contribution by 0.7%. therefore company should start the
business of different product line also.
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4) Evaluation of boots market position
As per the evaluation of market strategy it is considered that Boots plc is large contribute
and increased its sales by 13 million. It is observed that organisation is the biggest contributed in
non grocers and chemist products. The data indicates towards following aspect that expenditure
get increased by 0.6% with total £1.39 billion, total number of units get sold by 681.81 million ,
overall the percentage increased by 0.4%. The average price per unit was cited by £2.04 with
incremental change of 0.2%.
Overall the sales of grocers products get decreased by 53% with negative change of -
1.5%. Non Grocers was calculated as 47% with incremental change of 1.5%. Non-Grocer sub
sector was recorded at 28% sale of chemist products. 9.2% sale of drugstores. However, the drug
stores sales decreased by -0.2%. hard discount rates was counted as 2.4% and the other non-
grocers was recorded as 11.2%. it is evaluated that the process of compressing the sale of non
grocers get increased by 11.2%.
Overall market cap indicates that 0.6% Year on year growth sales. The sale of grocers
product get decreased and sale of bathroom toiletries are increasing towards market spend
growth of +2.9% year on year. The above data indicates that organisation is stable with its
bathroom and toiletries however it should reform its market strategies and plans for grocers
sales. It should not consolidate the its market position. There is an opportunity to explore the
business and operation of boots plc in skin care and bath care products. South Korea is the main
region where sale of beauty products recorded high. It is building a multi chain based out UK.
The procedure mainly associated with creating market chain with its beauty products and
commodities. It is analysed that services must be increased and cared (Albergel, 2013). Boots plc
is seeking for developing the structure with creating values and challenging market caps. There
are four major areas are found in which it can grow such as local pharmacy, Flagships stores and
booths exports. These products are more popular in localities with a the tap of communities and
the captions for stand-alone establishments. Health and body care products are offered by
flagship stores and It is required to specify the services and with same roof. The stores also have
some premium beauty products that can be added in its marketing line.