Analyzing Financial Health: Portfolio 2 - Statement & Ratio Analysis

This portfolio assignment provides a detailed analysis of a company's financial performance through the preparation and interpretation of financial statements and ratios. The assignment includes the creation of journal entries, ledger accounts, a trial balance, an income statement, and a balance sheet. It further involves a letter articulating concerns related to withdrawals and the calculation of key financial ratios such as profitability, liquidity, and efficiency ratios to assess the company's financial health. The analysis considers the impact of factors like COVID-19 and compares the company's performance against industry benchmarks and competitors, highlighting areas of strength and weakness. The report concludes that while the company exhibits some positive financial indicators, there are areas needing improvement to enhance overall financial stability and performance. Desklib is a valuable resource for students seeking similar solved assignments and study tools.

Portfolio 2

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
ASSIGNMENT 2.............................................................................................................................2
PART A...........................................................................................................................................2
a) Preparing double entry system to record transaction in journal entries..................................2
b) illustrating below ledge account to get opening balance........................................................6
c) Formulating Trial balance as at 31st October 2021...............................................................17
d) Preparing Income Statement for the period ended 31st October 2021..................................17
e) Formulating balance sheet as at 31st October 2021..............................................................18
f) Writing letter..........................................................................................................................20
PART B.........................................................................................................................................21
a) Determination of ratios..........................................................................................................21
b.................................................................................................................................................24
CONCLUSION..............................................................................................................................25
REFERENCES..............................................................................................................................27

INTRODUCTION
Recording business transaction is one of the significant component that is one of the crucial
component that is helpful is gaining the information about the conducted commercial activities
in turn better approach for decision can be made. It is based on double entry system that records
the transaction in two accounts so that overall picture of organizational performance can be
derived. The current report will provide significant information regarding the aspects like
recording transaction in journal entries, bring opening balance from ledge, formulating trial
balance, income statement and financial position. These largely play role in providing crucial
information that aids in ascertaining overall performance of company. It will comprise
computation of ratio in order to evaluate performance of organization on the basis of this
analysis technique.
1

ASSIGNMENT 2
PART A
a) Preparing double entry system to record transaction in journal entries
2

3

4

5

b) illustrating below ledge account to get opening balance
6

7

8

9

10