Myob Assignment
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EXECUTIVE SUMMARY Gone Fishing Pty Ltd is a small business which buys and sells fishing equipment. The report presents information about the financial performance of the business from 1 July 2010 to 31 January 2011. The report also provides analysis of the company’s profitability and financial position. As can be inferred from the financial statements, specifically Profit & Loss Statement for the seven-month period and Balance Sheet as of 31 January 2011, the main concern for the management is that the company is barely making profit. It only earned a net profit of $441.38 which only accounts for 0.20% of the total income to date. The primary reason for this is that the total revenue generated is not large enough to cover the corresponding cost of operations. Another notable finding is that a big portion of its expenses pertain to employment expenses. Moreover, the company has not been able to collect 15.50% of its total receivables within the allowed 30-day credit period. Therefore, Gone Fishing Pty Ltd should strive to increase its total revenue and control its costs so that the business will be more profitable.
Gone Fishing Pty Ltd Financial Performance Report
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2.0
INTRODUCTION Business background Gone Fishing Pty Ltd is a small business which buys and sells fishing equipment for years. The structure of the business is that of a private company with a sole shareholder and director, Greg Hansen. The company strives to provide a high quality product and service to strengthen its financial condition and market share. In addition, the manager aims to maintain an adequate level of inventory, improve the accounts receivable collection, and pay the outstanding obligations on time. The business is registered for Goods and Services Tax (GST) with the Australian Taxation System (ATO). Accordingly, the accrual method of accounting is used for both accounting and GST purposes. The business also maintains a perpetual inventory system using the average
EXECUTIVE SUMMARY Gone Fishing Pty Ltd is a small business which buys and sells fishing equipment. The report presents information about the financial performance of the business from 1 July 2010 to 31 January 2011. The report also provides analysis of the company’s profitability and financial position. As can be inferred from the financial statements, specifically Profit & Loss Statement for the seven-month period and Balance Sheet as of 31 January 2011, the main concern for the management is that the company is barely making profit. It only earned a net profit of $441.38 which only accounts for 0.20% of the total income to date. The primary reason for this is that the total revenue generated is not large enough to cover the corresponding cost of operations. Another notable finding is that a big portion of its expenses pertain to employment expenses. Moreover, the company has not been able to collect 15.50% of its total receivables within the allowed 30-day credit period. Therefore, Gone Fishing Pty Ltd should strive to increase its total revenue and control its costs so that the business will be more profitable.
Gone Fishing Pty Ltd Financial Performance Report
1
2.0
INTRODUCTION Business background Gone Fishing Pty Ltd is a small business which buys and sells fishing equipment for years. The structure of the business is that of a private company with a sole shareholder and director, Greg Hansen. The company strives to provide a high quality product and service to strengthen its financial condition and market share. In addition, the manager aims to maintain an adequate level of inventory, improve the accounts receivable collection, and pay the outstanding obligations on time. The business is registered for Goods and Services Tax (GST) with the Australian Taxation System (ATO). Accordingly, the accrual method of accounting is used for both accounting and GST purposes. The business also maintains a perpetual inventory system using the average
References: Hoggett, J., Edwards, L., Medlin, J., and Tilling, M. (2009). Financial accounting (7th ed.). Milton: Wiley. Pabst, W., & Perrin, B (2011). Gone fishing Pty Ltd: A computerised accounting practice set using MYOB Version 19. Milton: Wiley. Society for Human Resource Management: Salaries as a Percentage of Operating Expense website: http://www.shrm.org/Research/Articles/Articles/Pages/MetricoftheMonthSalariesasPerce ntageofOperatingExpense.aspx Bob Nelson, 40 Ways to Improve Retail Profit Margins website: http://www.businessforum.com/nelson03.html Gone Fishing Pty Ltd Financial Performance Report 12