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Financial Essay

3645 words - 15 pages

Managing financial resources and decisions
Part 1
Assignment 1
Task 1
Sources of finance for different businesses
Different sources of finance are given for, old, large small etc organizations.
Type | Cost | Payback Terms | Sizes | Advantages | Disadvantages |
Personal Savings | No cost | None |   | Easy, cheap | Risk of Loss |
Friends & Family | Usually good rate or none | Very flexible |   | Flexible, best value | Can create friction |
Home Mortgages - Traditional or Seconds | 7-9%8-14% on equity loans | Very long and flexible | 80-100% + of home equity value | Cheapest, longest term | Your house is at risk in the event of non-payment |
Suppliers | Free | 30 days +/- |   | ...view middle of the document...

|

c) Profit & Loss account and balance sheet
Bartlett Company Income Statement
| 2012 | 2011 |
Sales RevenueLess: Cost of goods soldGross profitsSelling expensesGeneral and administrations expensesDepreciation expenseLess: interest expenseEBITLess: taxesNPATEarnings available for common stockholders | 3,074__2,088___986 100194 239 ___128325 94231____231 | 2,567__1711___856 108187223____126212 64148___148 |

Key item of P & L Account
* Gross profit
Cost of the goods sold is deducted from sales.
* EBIT
All the expenses are deducted from gross profit except interest and tax
* EBT
Interest is deducted from EBIT
* NEAT
It is the amount that comes after tax is deducted from EBT.

Bartlett Company Balance Sheet
Assets | 2012 | 2011 |
CashMarketable securitiesAccounts receivable InventoriesTotal current assetsLand and buildings Machinery and equipmentFurniture and fixturesVehiclesOther Total gross fixed assets Less: accumulated depreciationNet fixed assetsTotal assets | 363685032891,2232,0721,866358275984,6692,2952,3743,597 | 288513653001,0041,9031,693316314964,3222,0562,2663,270 |
Liabilities and shareholders’ equity | | |
Accounts payable Notes payableAccruals Total current liabilitiesLong-term debtTotal liabilitiesAuthorized, issued capitalPaid-in capital in excessRetained earningstotal shareholder’s equitytotal liabilities and stockholder’s equity | 382791596201,0231,6433914281,1351,9543,597 | 270991144839671,4503904181,0121,8203,270 |

Key item of Balance Sheet
* Current asset
These assets are operating in nature. Their useful life is about one year.
* Fixed assets
These assets are capital in nature. Their benefits are derived more than a year.
* Current liabilities
These are the liabilities which are payable within a year.
* Long-term liabilities
Their due payment period is after one year.

Assignment No. 2
Task 1
Purpose of main financial statements
The objective of main financial statements is shortly described below: -
* Balance sheet
It is a statement that describes a company's assets, liabilities and shareholders' equity at a specifics point in time.
* Profit & Loss account
It is a statement that shows the revenues, costs and expenses incurred throughout a selected amount of time - typically a business enterprise year or quarter.
* Statement of cash flows
The cash flow statement produces data about a company's gross receipts and gross payments for a specific period of your time.
Difference between formats of financial statements for different types of business
There is no distinction as formats of the financial statements of sole trader, partnership and private Ltd. The difference is profit & loss account. The profit and loss account is bothered; a business (sole trader, partnership or a personal restricted company) will claim any expense subject to the higher than criteria. However the record could be a bit completely different. The sole trader and...

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