B120 TMA03

(Ohara, 2007) Most financial statements are made public for the benefit of stakeholders and potential investors. The bottom-line is that financial statements are the main source for analyzing how well a company is operating. The income (or profit and loss) statement is simply a report card of how much activity (revenue) was performed in the period, how profitable that activity was (gross profit/loss), and what it cost the contractor to run the business (overhead). (Murphy, 2006)

In this task I’m going to analyse the figures on cash flow that I created in P3 and justify why you think the business might have problems also provide range of solutions.

From analyzing the business using all the above tools my advice is not to concentrate just on a profit but to deal with small but dangerous issues like: stoke leftovers, paying out debts on time (paying upfront will make your business more reliable for banks). I have come to this conclusion because the business is making less profit from the year before and also there is slight increase in some costs such as wages etc. I would also be concerned that the increase in barrowing is a bit dangerous which can lead to the business being closed in the future or to expend it to the new level. If these patterns continue (increasing value of business rising investments in fixed assets) into 2014 the business could successfully start to pay off the overdraft. I think Michael will be able to cope with the ongoing debt.

A profit and loss account is intended to show a business its income and expenditures and calculate the company’s net profit or loss based upon the difference between those figures. It is extremely useful in determining past performance and to try and predict future results. It enables a business to see what changes could make to improve on its profit. It also give enough information to help a business to set targets.

When you’re looking at the income statement, you can get information about profitability for a particular period. This is also called the profit and loss statement. The income statement is composed of both income and expenses. This statement can be used to deduct expenses from income and report either a net profit or net loss for that period. This statement will deduct all expenses from income and then report your net profit or net loss for that period. This will allow the business owner to determine if the business is bringing in a good amount of revenue to make a profit. The cash flow statement shows the movement in cash and balance over period. The cash flow can vary depending on the operating activities, investing and financing activities. This statement provides one business owner with insight to the company’s liquidity which is vital to the growth of the business. Reinvesting in business is very important, looking at the statement of retained earnings will tell a business owner how much were reinvested in the company. After profitable period, every big business has to give some of its profits to stockholders, and keep the rest amount as retained earnings. Out of all statements, retaining statement is important to companies that sells stocks to the public. This statement can also provide you with assets and liabilities information. These informations can be used to assess the financial health of your business. The results of a balance sheet will help the business owners to show the risk of liquidity and credit. Looking at these information you can measure trends and relationships to show where in the areas you can improve. These can also be compared to similar companies to show how the business measures up to leading competitors (Ali, 2010). In summary, the financial statements can provide a business owner

An income statement, also known as a profit and loss statement shows how much money a company has spent over a period of time. It also shows the costs and expenses that are associated with earning that revenue. It is an important measure of the company’s profitability. The simple building blocks of a net income formula are revenues minus expenses equal net income.

A few years ago I got involved in marketing an expensive brand of vacuum cleaners called Kirby. The product was well designed, of high quality and had many features that were lacking in other leading brands. The marketing strategy used were a combination of selling orientation and product orientation, where the business owners assumed that a sales force would be able to sell the product as long as the right approached was used.

The Income Statement is the financial report that depicts the operating performance of a company (revenues less expenses generated = profit) over a specific period of time and facilitates the analysis of a company’s growth, cost, and profitability. This analysis focuses on the financial analysis of The Lemonade Stand during Season 1 and Season 2.

Describe the nature of income statements. An income statement is a detailed explanation of a firm’s revenues and expenses. It is also sometimes called a profit and loss statement. Information from the income statement and the balance sheet are used to calculate financial ratios that are useful when making investment decisions. The statement is prepared for a set time period – a financial quarter or a fiscal period. When the income statement is prepared financial information is listed in the following order:

An Income Statement provides an overview of an organization’s earnings performance during a specific time period. There are four components to the income statement: revenue, expenses, gains and losses.

* An income statement is a report that contains information in regards to an organizations’ assets and financing in order to obtain those assets that is collected over a certain period of time

The first of the financial statements is the income statement. The income statement states the revenues and expenses in an understandable way that shows a clear picture of net income or net loss for the

As Mr. Clarkson's financial advisor, we would caution him on expanding his business given the current financial trends and ratios of the company. The investment in inventory and receivables is too high. As a result, Clarkson Lumber's return on assets, return on equity and invested capital are lower when compared to other high profit outlets as shown in exhibit C. Additionally, a significant increase in debt, such as a $750,000 loan, will further reduce the current ratio of the company. Clarkson Lumber could benefit from some changes in its collection policies for

It is important for every business to carry out financial statement analysis in order to gain an understanding of their current financial status. There are two main types of financial statements that businesses commonly use when it comes to financial analysis. These are known as the Profit and Loss Account and the Statement of Financial Position. A profit and loss account consists of a list of expenses incurred by the company, against their revenues over a certain period of time. It shows whether the organisation

This Income Statement also known as the Earnings Statements or statement of operation, is one of the four Financial Statement used by accountants, business owner’s, and investors. The Income Statement provides a detailed look into how profitable a business has been over a designated period of time.