Financial Statements

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In this report will analyse budgets and make appropriates decisions and explainn the calculation of unit costs and make pricing decisions using relevant informations. And than this report will assess the viability of a project using investment appraisal techniques and discuss the main financial statements. Compare appropriate formats of financial statements for different types of business. Interpret financial statements using appropriate ratios and comparisons, both internal and external.

3.1 analyse budgets and make appropriates decisions
According to this data, Kaitai HK(GuangZhou) monthly budget increase range so big. Analysis the data, the company not arrange the company situation to set the budget. Analysis the budget, the company not implement budget every month. Kaitai(Wuhan) monthly actual cumulative not achieve monthly budget. In this report to analysis the problem, company need to change the budget. Financial department need to analysis the company power, and arrange the company situation to make the company budget. company sales department need to check their past sales patterns, and make a results of market research, and make a market budget. The company economic enviroment influence the company budget, and prodict anticipated advertising during the budget need to consider more factors, and make a particular budget. Humen resource need to consider distribution and quality of sales outlets and personnel. At the samen times, company need to consider the resource budget, reduce the work hours and improve the work effciency, according to this way reduce the resource budget.

3.2 explainn the calculation of unit costs and make pricing decisions using relevant informations Order:
Variable costs=Material costs+ labour costs+ variable overheads=30+90+55=175 Contribution per unit=price -VC=290-175=115
Selling price 290(per unit)
VC 175
Contribution per unit costs 115
Break-even point= 432000/115=3757
Sales(6500*290) 1885000
VC(175*6500) 1137500
FC 432000
Sales(6500*290+500*290*85%) 2008250
VC(175*(6500+500)) 1225000
FC 432000
Order 2:
Sales(6500*290+1000*290*75%) 1885000
VC(175*(6500+1000)) 1312500
FC 432000

Profit rate=Profit÷Sale
Old profit rate=315500÷188500=16.7%
Order1 of profit rate=351250÷2008250=17.5%
Order2 of profit rate=358000÷2102500=17%

Order1 of profit rate- order of profit rate=17.5%-16.7%=0.8% Order2 of profit rate- orderof profit rate=17%-16.7%=0.3%
According to this data, company improve the order can increase the profit, and the company market share will improve.

3.3 Assess the viability of a project using investment appraisal techniques. 1, Accounting rate of return
ARR=Estimated average peofits/Estimated average investment *100% ARR A=[(64000+49000+34000+19000+24000)÷5] ÷[(360000+30000) ÷2]=19.5% ARR B=[(10000+84000+142000+54000)÷5] ÷[(360000+70000) ÷2]=27.0%

2, payback
Investment A:
Year 1: 360000-140000=220000
Year 2:220000-120000=10000
Year 3:10000-10000=0
Invest about 3years, investors can take back the 360000.
Year 1: 140000*[pic]=125020
Year 2: 120000*[pic]=95640
Year 3: 100000*[pic]=71200
Year 4: 80000*[pic]=50880
Year 5: 80000*[pic]=45360
NPV=B-C= (125020+95640+71200+50880+45360)-360000=28100>0 it is accept.

Investment B:
Year 1: 360000-50000= 310000
Year 2: 310000-70000=240000
Year 3: 240000-150000=90000
Year 4: 90000-180000= -90000
Invest B take back about 3.5 years.
Year 1: 50000*[pic]=44650
Year 2: 70000*[pic]=55790
Year 3: 150000*[pic]=106800
Year 4: 180000*[pic]=114480
Year 5: 130000*[pic]=73710
NPV=B-C=(44650+55790+106800+114480+73710)-360000=35430>0 it is accept. | |Investment A |Investment B |...
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