An income statement is financial statements that will measure a guilds financial performance over a certain(p) accounting system period usually over a financial quarter or a full socio-economic class. This is useful in assessing the performance of a business in that it will denominate where the business is acquiring its revenue as well as showing the companys expenses in both operate and non-operating activities. An income statement will also show the net profit or loss that a business has incurred over an accounting period.
Question 1B - Review the income statements for the years 2011 and 2010 and identify whether in that location be any concerns relating to city Florist that should be considered by the banking concern manager.
The bank manager should be concerned initially with the Income statement showing that both gross and net profit for City Florist is down in 2011 when compared with the 2010 turns. In 2011 the business has began with a higher amount of opening stock carried over from 2010 as well as making more purchases than the year precedent and ending with a higher closing stock.
The key figure from the income statement shows that City Florist has seen a drop in net profit making £82,012 in 2011 maculation the year previous they achieved a net profit of £96,486, also worth(predicate) noting is that in 2011 total expenses for the business were actually lower than that of 2010 while still leading to a lower net profit. wampum profit margin was 3.8% in 2011 when compared with 4.5% in 2011, this is of concern if it continues to overhaul as they may rely on debt more to secure expenses.
Question 2A - Explain the purpose of a balance sheet and comment on the usefulness of the balance sheet in assessing the financial strength of a business.
The balance sheet is there to create a summary of a businesss assets, liabilities and equity and is divided...If you want to get a full essay, effectuate it on our website: Orderessay
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