Nobody downloaded yet

Evaluate the Financial Performance of a Business - Assignment Example

Comments (0) Cite this document
Summary
Evaluate the Financial Performance of a Business 1. Discuss the main financial statements; Business organizations are mainly concerned with financial activities. In order to understand the financial strength and financial status of the business, every enterprise should prepare certain statements known as financial statements…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.6% of users find it useful
Evaluate the Financial Performance of a Business
Read TextPreview

Extract of sample "Evaluate the Financial Performance of a Business"

Download file to see previous pages Balance sheet Income statement and Cash flow statement. These are the basic statements normally prepared by profit-oriented corporations. These statements help in knowing the profitability and financial soundness of the business concern. These are prepared at the end of a given period of time. Financial statements are used as an important tool to communicate the financial information to parties outside the organization (such as investors, creditors, and other external decisions makers). The Balance Sheet; The purpose of preparing balance sheet is to report the financial position (amount of assets, liabilities, and shareholders’ equity) of a firm during a particular period of time. A balance sheet contains complete information about assets, liabilities, and shareholders’ equity of the company. Assets; Assets are things which have economic value and that which are owned by the company. It include tangible asset, such as plants, trucks, equipment, and inventory. It also includes intangible asset, such as trademarks and patents. Cash itself is an asset. Tangible asset can be divided into two, Current asset and fixed asset. Current asset represent the company’s liquidity. This is where companies list all of the stuff which can be converted into cash in a short period of time, usually a year or less (Kennon 2012). Fixed asset is an asset held with the intention of being used for the purpose of producing or providing goods or services, and it is not meant for sale in the normal course of business (Accounting for Fixed Assets n.d). Liabilities: Liabilities include all kind of obligation that a company have. The term liabilities mean the amount of money that a company owes to others. Shareholders’ equity; It is also called capital or net worth. The following formula summarizes what a balance sheet shows: ASSETS = LIABILITIES + SHAREHOLDERS'EQUITY Income Statements; Income statement is a statement which shows the revenue that earned by the company during a specific period of time (usually for a year or some portion of a year Income statement also shows the expenses, and the cost associated with the earning of revenue. Income statement also gives information regarding how much the company earned or lost over a period of time. This statement helps to calculate earnings per share (EPS), and it also tells how much money shareholders would get, if the company decides to distribute the whole earnings of the company. Income statement can be also called the statement of operation, or statement of earnings. Statements of Cash Flow; A cash flow statement is a statement that contains a detailed report regarding the company’s inflows and outflows of cash. Cash flow statement is helpful in knowing the net increase or decrease in cash for the period. It is prepared by using the information and reports in the company’s balance sheet and income statement. Cash flow statement is helpful in recognizing the, changes in cash balance(increase or decrease) sources of cash uses of cash There are three parts included in the cash flow statement. They are (1) operating activities; (2) investing activities; and (3) financing activities. 2. Compare appropriate formats of financial statements for different types of business The financial statements explain from where a company's funds come from, where it goes and where it is at present. “Owners and CEOs use these statements to manage a business, bankers to check its creditworthiness, and investors to ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Evaluate the Financial Performance of a Business Assignment”, n.d.)
Retrieved from https://studentshare.org/business/1451772-1discuss-the-main-financial-statements-2compare-appropriate-formats-of-financial-statements-for-different-types-of-business-3
(Evaluate the Financial Performance of a Business Assignment)
https://studentshare.org/business/1451772-1discuss-the-main-financial-statements-2compare-appropriate-formats-of-financial-statements-for-different-types-of-business-3.
“Evaluate the Financial Performance of a Business Assignment”, n.d. https://studentshare.org/business/1451772-1discuss-the-main-financial-statements-2compare-appropriate-formats-of-financial-statements-for-different-types-of-business-3.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Evaluate the Financial Performance of a Business

Financial Performance

...?TABLE OF CONTENTS INTRODUCTION 2 RATIOS ANALYSIS 2 Profitability Ratios 2 Liquidity Ratios/Gearing Ratios 3 Gearing ratio 3 Efficiency of Asset Utilisation Ratios 3 ADVANTAGES AND DISADVANTAGES OF USING FINANCIAL RATIOS 5 CONCLUSION 6 BIBLIOGRAPHY 7 APPENDIX 8 INTRODUCTION CUERO Ltd is a UK based company and operates in the manufacturing of men, women and children. The company is expanding rapidly in the UK shoes industry. In this report, the financial performance analysis of the company has been done. Through ratios analysis including profitability ratios, liquidity ratios/gearing ratio and efficiency of asset utilisation ratios, the financial...
4 Pages(1000 words)Essay

Financial Performance

...helps an investor and creditor to recognize company’s strengths and weaknesses that leads to good investment strategies and financial planning. The information found on the financial statements is important to company’s managers, stock and bonds analysts, bank loan officers and to competitors. This study will use ratio analysis as a means to gain insight into the strengths and weakness of Walgreens Company. Three types of ratios will be used by this study to get into the desired information. Data will come from the published financial report of Walgreens and its competitors. First is the trend or time series analysis ratio to evaluate Walgreens...
2 Pages(500 words)Research Paper

Be able to evaluate the financial performance of a business

...?Be Able to Evaluate the Financial Performance of a Business PART A: AC 4 Discuss the main financial ments: Different users of financial ments use these for varying purposes: Owners and Managers: They use financial statements to formulate significant business decisions that will affect the company’s operations. Besides they also rely on such financial statements to prepare their annual report to be presented to the board and shareholders. Employees: Employees in a company require these reports to make Collective Bargaining Agreements with management as well as to determine their future...
7 Pages(1750 words)Assignment

Evaluate Unilever's financial strategy

...?Evaluate Unilever’s financial strategy Table of Contents Executive Summary 3 Introduction 4 Corporate Life Cycle 4 Sources of fund 6 Modigliani-Miller theorem 8 Dividend Policy 11 Dividend Policy of Unilever 12 Lintners’s Four Stylised Facts 13 Recommendations 14 Reference List 16 Executive Summary In today’s complex and competitive business environment financial strategy applied by the organizations play a major role. In this context, the present report focuses on the evaluation of financial strategy of Unilever. The stage of the organization is firstly decided using the organizational life cycle. The current position of Unilever...
7 Pages(1750 words)Essay

Financial Performance

...risks faced by the company, which enables a reader to get an insight of the companies' present condition and evaluate any future risks. TESCO PLC-- RATIO ANALYSIS The financial performance and position of Tesco Plc can be assessed with the help of ratio analysis for the last three years. This analysis is broken down into sections so as to be helpful for all the groups interested in the financial performance of the company i.e., the management, the investors, the lenders, the analysts etc. PERFORMANCE The performance of Tesco Plc over the last three years can be assessed by the following ratio: Return on Investment...
12 Pages(3000 words)Assignment

Financial & Budgetary Management. Planning Business Performance

...technique in which a panel of experts evaluates market conditions and other qualitative factors in order to make an expert opinion about the total sales total of a budget. If a budget does not utilize a systematic scientific methodology to prepare the numbers inside the budget then it lacks credibility and the number may be distorted by bias and unrealistic expectations. The budgeting process is performed by the accounting staff of a company. Accountants take specialized courses in their curriculum to learn how to prepare budgets and how to maintain all relevant data to prepare budgets. The information from the budget is compared with the actual events after the timeframe of the budget has gone by in...
4 Pages(1000 words)Essay

Business Accounting Ratio analysis is one of the many tools that can be used to evaluate financial performance of business entities

.... Having produced 137.2 million barrels of oil equivalent for one year as of the fiscal year ended June 30, 2009, BHP is not surprising selling its crude oil production to refiners worldwide at market prices (Reuters.com, 2010a). This paper evaluates BHP’ financial performance using ratio and SWOT analysis and recommend measures for improvement. 2. Calculation of key ratios The following ratios are needed for purposes of evaluating BHP: Gross Profit/Profitability ratio, Return on Capital Employed. Gearing Ratio, Liquidity ratio/acid test ration and Price earnings ratio. Each is computed and explained below using data from The Annual Report of BHP for 2009...
8 Pages(2000 words)Essay

Evaluate Unilevers financial strategy

...Supplementary assumptions of Dividend significance............................................................................................................................8 A recommendation for an appropriate financial strategy…………………………………..9 Conclusion............................................................................................................................10 References.............................................................................................................................11 Introduction Finance takes up a key role in all areas of Unilever’s business. They make it possible for the firm to transform ambitions and strategies into well sustainable, continuous and...
8 Pages(2000 words)Essay

Evaluate Financial Conditions

...). It is important to evaluate governmental financial performance because if there is detection of an impending financial difficulty, an “early warning” can assist to avoid disruption in important government services as well as operations. Preventing financial difficulties thus needs an early warning system which can identify practices or trends that may negatively impact the short as well as long term solvency of a government. Thus to be helpful ,early warning systems together with other analytical tools ought to be built on an inclusive conceptual structure of government financial management which comprises performance...
4 Pages(1000 words)Research Paper

Gazproms Financial Performance: Business Efficiency and Effectiveness

...Gazprom’s Financial Performance: Business Efficiency and Effectiveness Introduction This paper presents the following: first, a discussion of the differences between business efficiency and effectiveness. Second, three reasons why firms strive to achieve the highest level of efficiency and efficacy. Third, the analysis of Gazprom’s financial performance using ratios. Fourth, discussion of the limitations of using financial ratios to measure the performance of companies. Fifth, three non-financial elements of the balanced scorecard used in evaluating Gazprom’s...
7 Pages(1750 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Evaluate the Financial Performance of a Business for FREE!

Contact Us