B120 tma03
TMA 03
B120
08/01/2014
Word count
Part1:916
Part2:174
Total:1143
Customs
Part1 Questions 1A and1B……………………………………………………………………….3
Part1 Questions 2A and 2B………………………………………………………………………4
Part1 Questions 3A and 3B………………………………………………………………………5
Part1 Question 4……………………………………………………………………………………..6
References………………………………………………………………………………………………7
Part2……………………………………………………………………………………………………….8
PART 1
Question 1A
A profit and loss account is supposed to show a businesses’ income and expenditures and calculate the company’s net profit or loss based on the difference between those numbers. It is really useful in determining past performance and to try to predict future results. It allows a business to see what kind of changes can make an improvement on its profit. It also gives enough information to help a business to set targets and form a strategy.
We can learn more from the statement. As it shows the expenses so we can see where the largest expenses are, this can be used to find out the immediate areas to concentrate on when trying to control an expenses.
Question 1B
From looking at the statement I have found a few reasons for concern, the first I would like to point out is that even if the business is making a profit the margin from 2012 to 2013 in far less and has decreased nearly for 32%. This could mean less money to buy materials and pay out the debts. If the same decrease was to happen in 2014 the business will lose approximately 64% of income it made in 2012 and will not be able to pay out a debt. Another cause for concern is the amount of money being spent on staff wages. The cost has risen but there is no greater outcome in terms of profit. Lastly from looking at the Cost of goods, there are a combined total of 1,066,000 for opening stock and purchased, this is lots better than in the previous year what is a good sign. But they had 250,000 leftover so ordered less stoke in order
B120
08/01/2014
Word count
Part1:916
Part2:174
Total:1143
Customs
Part1 Questions 1A and1B……………………………………………………………………….3
Part1 Questions 2A and 2B………………………………………………………………………4
Part1 Questions 3A and 3B………………………………………………………………………5
Part1 Question 4……………………………………………………………………………………..6
References………………………………………………………………………………………………7
Part2……………………………………………………………………………………………………….8
PART 1
Question 1A
A profit and loss account is supposed to show a businesses’ income and expenditures and calculate the company’s net profit or loss based on the difference between those numbers. It is really useful in determining past performance and to try to predict future results. It allows a business to see what kind of changes can make an improvement on its profit. It also gives enough information to help a business to set targets and form a strategy.
We can learn more from the statement. As it shows the expenses so we can see where the largest expenses are, this can be used to find out the immediate areas to concentrate on when trying to control an expenses.
Question 1B
From looking at the statement I have found a few reasons for concern, the first I would like to point out is that even if the business is making a profit the margin from 2012 to 2013 in far less and has decreased nearly for 32%. This could mean less money to buy materials and pay out the debts. If the same decrease was to happen in 2014 the business will lose approximately 64% of income it made in 2012 and will not be able to pay out a debt. Another cause for concern is the amount of money being spent on staff wages. The cost has risen but there is no greater outcome in terms of profit. Lastly from looking at the Cost of goods, there are a combined total of 1,066,000 for opening stock and purchased, this is lots better than in the previous year what is a good sign. But they had 250,000 leftover so ordered less stoke in order
References: Day J. and Krakhmal V. (2006) fourth edition (2011), An introduction to accounting and finance in business, Milton Keynes, The Open University Part 2 Keeping track in your own life. I took part in this discussion 3.1 and found really interesting how a lot of people really are keeping track on their finances. Myself as long as I can do what I need to do and save I don’t keep any records. This made me think that maybe this is something I should be doing. I found the view by Matt Tanner, this is a view of a person who in my opinion has to be strict on himself and really organized when it comes to keeping track, all records need to be stored and this takes great organization skills. Also I started to think about setting up few more accounts like David Graham because in my opinion his method is not time consuming and can help me manage my finances a bit better. I decided that I will continue to pay the bills, save and keep no records as I find this to time consuming. But I admire people who keep up to keep records.