2nd Finance Assignment
Introduction
This report is being produced to analyse the profitability and stability of Biddenden Vineyard using cash flows, NPV, BEP and various other methods to view the potential for investment. This report will also highlight the prospects of the company and make recommendations that would improve Biddenden Vineyard.
Q1.
There are a variety of costs within the business, they all have a purpose. From looking at Income Statements and the Statement of Financial Position, you can analyse where and when bills, materials, maintenance and other expenses come in and out. Carefully classified payments can be seen and from this and you can look at the company’s performance and make better, informed decisions. (Sue Friary, Darlington College)
Income Statement
Otherwise known as a Profit and Loss account, this shows the profitability and performance of a business during an accounting period. (Sue Friary, Darlington College)
“The income statement of a business calculates the profit due to the owner/owners of the business after the cost of purchases and other expenses have been deducted from sales revenue.” David Cox (2010). Pg 9.
INCOME minus EXPENSES equals PROFIT
Eg sales eg running which adds
Revenue costs to capital
Statement of Financial Position
Otherwise known as a balance sheet, this shows what the business is worth (in terms of assets, liabilities and capital) at the end of an accounting period. (Sue friary, Darlington College)
“The statement of financial position is so called because it shows the assets, liabilities and capital of a business in numerical (money) terms:” David Cox (2010). Pg 9.
ASSETS minus LIABILITIES equals CAPITAL what a what a how the business business business has owes owes been financed
Fixed Costs
Fixed costs are also known as non-current assets, such as rent on premises, rates, machinery, vehicles and office equipment. These are expenses that don’t change with output, so regardless of the amount
This report is being produced to analyse the profitability and stability of Biddenden Vineyard using cash flows, NPV, BEP and various other methods to view the potential for investment. This report will also highlight the prospects of the company and make recommendations that would improve Biddenden Vineyard.
Q1.
There are a variety of costs within the business, they all have a purpose. From looking at Income Statements and the Statement of Financial Position, you can analyse where and when bills, materials, maintenance and other expenses come in and out. Carefully classified payments can be seen and from this and you can look at the company’s performance and make better, informed decisions. (Sue Friary, Darlington College)
Income Statement
Otherwise known as a Profit and Loss account, this shows the profitability and performance of a business during an accounting period. (Sue Friary, Darlington College)
“The income statement of a business calculates the profit due to the owner/owners of the business after the cost of purchases and other expenses have been deducted from sales revenue.” David Cox (2010). Pg 9.
INCOME minus EXPENSES equals PROFIT
Eg sales eg running which adds
Revenue costs to capital
Statement of Financial Position
Otherwise known as a balance sheet, this shows what the business is worth (in terms of assets, liabilities and capital) at the end of an accounting period. (Sue friary, Darlington College)
“The statement of financial position is so called because it shows the assets, liabilities and capital of a business in numerical (money) terms:” David Cox (2010). Pg 9.
ASSETS minus LIABILITIES equals CAPITAL what a what a how the business business business has owes owes been financed
Fixed Costs
Fixed costs are also known as non-current assets, such as rent on premises, rates, machinery, vehicles and office equipment. These are expenses that don’t change with output, so regardless of the amount
References: David Cox (2010). Sole Trader and Partnership Accounts: For Accounts Preparation l and ll. Worchester: Osborne Books Limited. 9. David Cox (2010). Sole Trader and Partnership Accounts: For Accounts Preparation l and ll. Worchester: Osborne Books Limited. 18. (Sue friary, Darlington College) Don R. Hansen, Maryanne M. Mowen, Liming Guan (2009). Cost Management: Accounting and Control. 6th ed. USA: Cengage Learning. 719. Earl K. Stice, James D. Stice, Monte R. Swain, Ph.D (2008). Accounting: Concepts & Applications. 11th ed. USA: Cengage Learning. 1062.