FINA1149 Finance for Non-Finance Assignment Sample
Module code and Title: FINA1149 Finance for Non-Finance Assignment Sample
Question 1
(a)The statement of financial position
Table 1: Statement of Financial Position (Source: Self-Created)
(b) Hein’s cash position
Financial Position is a balance that records all current assets, equity and liabilities of a company or an organization (Bonsu et al. 2019). All the information is recorded in the financial position in order to check the overall performance of the business. In this study, Hien has a business that deals in premium quality glassware for its retailers.
The financial position of Hein is represented depicts that the company has invested in the premises that amounted to 74450 and other assets that were incurred amounted to 12266. Above all the liabilities incurred in the business are capital 151068, trade payables 25471 and HMRC 5988. This depicts that the company has invested fair expenses in the company. The total amount available in the business is 182527.
In order to improve the company’s cash position, the company should inculcate various factors. Firstly, the company should have an investment plan for making sure that the company has enough funds available in the future. Secondly, the company should maximize the employment benefits so that the employee gets motivated to do their work effectively and this will eventually help the organization in gaining profitability.
Question 2
(a) Calculation of Gross Profit and Net Profit Margins
Year
20X6(£ )
20X5(£ )
20X4(£ )
Gross Profit Margin
32.56%
32.87%
32.82%
Table 2: Calculation of Gross Profit Margin (Source: Self-Created)
Table 3: Calculation of Net Profit Margin (Source: Self-Created)
Figure 2: Net Profit Margin (Source: Self-Created)
(b)Brief Report
Gross Profit Margin (GPM)
GPM helps in measuring the profit earned by a business or an organization. The results are aggregated in the form of percentages (Ardila et al. 2019). It depicts the position of the company. The GPM for this company for the consecutive three years are 32.56%, 32.87%, and 32.82%. This shows that the performance in the year 20X5 is the best and the company has earned a maximum profit in this year.
Measuring profits helps the organization analyze their overall performance and helps in over viewing the profits incurred in the business. It also measures the company’s efficiency by continuously checking its products. The sales revenue generated by the company helps in analyzing the overall condition of the business. This also helps the organization in making prior plans for any risks that may occur in the future. Therefore, it tells the organization about all the direct costs of the company.
NPM helps in measuring the net incomes that are generated and depicted as a percentage of all the revenues that are received by the company. It also helps the investors in generating enough profits in the business. One of the most important factors of this margin is to depict the financial condition and health of the organization. It helps in gauging the organization’s activities for making money in the business.
It helps in making the company secures and stable, which helps in attracting investors to raise sufficient funds for the organization and also to grow the business at a constant rate. It helps in improving the overall management of the organization by making it more effective and efficient. Therefore, it improves the livelihood of different managers, employees, and owners. The reward offered to the managers and employees helps the business to generate goodwill. The NPM for this company for three consecutive years is depicted as 14.32%, 15.43%, and 16.44%.
The Cash Flow Statement depicts the company’s overall cash availability and the cash inflows and outflows incurred in a particular year. The cash is incurred in the business and affects the liquidity position is considered cash flow. It is important to check the cash availability in the business in order to help the organization in over viewing its overall performance for a particular year. This also helps in the analysis of investment activities of the business that helps in making activities more accurate and effective (Hladika and Valenta, 2018).
It helps in meeting the future obligations of the business. The net profit incurred in the business is 3583739. The cash flow is one of the most challenging businesses in the organizations depicts the small business performances. The cash flow statement provides money in order to pay buy supplies, and bills for operating the business more effectively.
In order to improve cash inflows and outflows of the business, it is important to take various steps in the organization like Negotiating quick payments and giving the customers penalties and incentives. The overall study of cash inflows and outflows is also measured and forecasted with this method. Consideration of invoicing factories also plays an integral part in the business that helps in analyzing the stock available in the business.
In this case, study, the company dealing in glassware should keep liquid assets in order to enable any kind of obligations in the future. They should also pay all th4 expenses available in the business to order to meet any future challenges or loopholes in the business or an organization.
The company should set up a credit line in the business for generating a better business cycle in order to pay all the outstanding balances of the business and interest that are incurred in the business (Almagtome et al. 2019). Companies should prepare a portfolio in the business to make it more effective and also to expand the revenue of the organization.
Therefore, the management of cash inflows and outflows becomes easy and sustainable. There should be very less usage of any credit payments that will help the organization in maintaining the credit policies in the business. The business can fix any issues if the cash inflow of the company is in fair condition. Cash available in the business reflects the overall performance of the organization.
Table 6: Budget Statement of profit or loss (Source: Self-Created)
This statement depicts the net cash of the organization and the net cash for the three months are 31540, 15540 and 40460 respectively (Suhasto et al. 2021). This depicts that the company has enough cash available in the organization in order to maintain its goodwill of the organization.
c) Budget statement of financial position
Budget statement of financial position
Assets
Amount (£)
Amount(£)
Gallery premises costs
750
. Electricity costs
60
Wages.
550
Private view expenses
450
1810
Liabilites
capital
1700
less: Drawings
700
1000
accounts payable
810
Total
1810
Table 7: Budget statement of financial position (Source: Self-Created)
The financial statement is the overall performance of the organization that clearly depicts all the assets and liabilities of the company (Mohamed, 2022). The balance incurred in the company amounts to 1810. The company has 1810 cash available in the market that analyses all the future aspects of the business.
d) Brief Report
The Budget states that the company’s net profit for three years is 44240,-27760 and 49240. Since February month has had a negative impact, therefore the company has faced a loss this month. This depicts that the company did not incur any cash inflows and the cash outflows are more than that of the inflow statements.
All the operating expenses have been considered in this study in order to analyze the overall net profit and losses of the organisation. Net cash in cash flow statements to depict the profitability of an organization that is incurred by the company in the past three months. The business that earns this profit incurs all the cash in the business and also all the losses are determined as cash outflows. Therefore, it is important to consider this cash as income or loss in the business or organization.
Question 5
The analysis ofCaroline’s business depicts that the company requires some improvements in the cash flow statement in order to improve the overall health of the organization. The issues related to cash flow discuss all the cash inflows and outflows incurred in the business or an organization.
This depicts that the company have various changes that need to be made organization in order to identify the business’s performance and financial health to meet any future obligations of the business (Toshmatov et al. 2019). All the loopholes incurred in the business can be compensated with the help of these cash flow statements and income statements and it will make the business more effective and efficient.
Bonsu, O.A.M., Dui, L.K., Ruiwen, L., Asare, E.K. and Prempeh, A.F.S., 2019. Exclusion of human resource accounting in statement of financial position and its effects on performance: empirical evidence of Ghana. Business and Economics Research, 9 (2), pp.1-17.
Hladika, M. and Valenta, I., 2018. Analysis of the effects of applying the new IFRS 16 Leases on the financial statements. Economic and Social Development: Book of Proceedings, 1(1), pp.255-263.
Mohamed, A.I., 2022. The impact of budgetary control on manufacturing firms’ financial performance Mogadishu-Somalia. NeuroQuantology, 20(6), pp.4741-4755.
Suhasto, I., Anggraeny, S. and Kirowati, D., 2021. The Implementation of Web-Based Financial Statements Application in Islamic Education Foundations. Jurnal AKSI (Akuntansi dan Sistem Informasi), 6(1).
Toshmatov, S.A., Khasanov, T.A. and Temirov, J.A., 2019. FORMATION OF THE PRIVATE HOMEOWNERS COMPANY’BUDGET AND ANALYSIS OF ITS FINANCIAL AND ECONOMIC ACTIVITIES. Theoretical & Applied Science, (9), pp.217-221.
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