翁帆为什么嫁给杨振宁,研究生毕业自我鉴定,福永信用卡套现
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Balance Sheet
Below is the balance sheet for FreeStyle Company in its First year of operation.
Opening Statement of Financial Position For FreeStyle Company
Non-Current Assets $
Motor Vehicles and Equipment 210,000
Furniture & Fixtures 96,000
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306,000
Current Assets
Closing Stock 12,000
Cash $ 36,000
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48,000
Total Assets 310,800
Capital :
A 140,000
B 140,000
Loans 20,800
Total Capital 310,800
Note 1: The first assets total for Year 1was $306,000, this was then depreciated by 10% subsequently throughout the years, ending in Years 3 with fixed assets at $245,382.
Note 2: The stock figure of $12,000 remains constant as the owners of The Freestyle Company agreed on a stock holding policy of $12,000 across the three years.
Note 3: The bank figures quoted here come from the cash budgets. For Year 1 the closing cash balance in December is $115,100, and so this is the figure we here in the bank as of the last day of the year in Year 1. Subsequently, the figures are $256,860 in Year 2 and $478,834 in Year 3.
Note 4: The total assets shows that worked out by adding up the fixed and current assets.
Note 5: The capital input by the owners is $140,000 each. Thus, the total is $280,000.
Note 6: The P&L figure across the three years comes from adding the net profit of each year.
Note 7: This is the payment the owners of Freestyle Company have decided to take which has been distributed accordingly to change in sales figures for the years in the cash budgets. The overall figures have been paid at the end of the year.
Note 8: In the Year 1, Freestyle Company does not pay back any of them, so the full amount of $40,800 is on the balance sheet. In the Year 2, a payment of $20,400 is made, and so there is $20,400 remaining to pay as of the end of Year 2. In Year 3, the loan is paid in full, and so a balance sheet of $0 remains as of the end of Year 3.
Note 9: Cash purchases only for the Freestyle Company, so no figures for creditors.
Note 10: Total liabilities for The Freestyle Company’s situation is calculated by adding up capital, P&L reserves and the loan, which Year 1 is $402,500.
Ratio Analysis
The relative strengths and weaknesses of firms can be analyzed using ratio analysis. It is a tool that performs quantitative analysis on the numbers found in financial statements. The use of ratio analysis gives the owners of the business a better understanding of how the business will perform. Ratio analysis is computed from the information given in the financial statements. It helps the freestyle company to compare the company performance in the three years. The company worked out three ratios combining areas of profitability and capital.
We are going to use six key ratios incorporating the areas of profitability, efficiency, and capital structure. The Ratio can help us to compare the first three years of our business; we can use the data that we get to compare with our competitors.
Note 1: The gross profit margin indicates the margin of profit between sales and cost of sales. It can me measure how much from each euro of the company's revenue is available to cover overheads and other expenses. Although the Freestyle Company just started, it holds a high gross profit margin which indicates that the company can make a reasonable profit, with 65% Year 1 and increased to 69% Year 2 and 75% in Year 3. An increase in sales volume will lead to an increase in gross profit but not necessarily to an increase in gross profit percentage. Thus, the Freestyle Company keeps its overheads in control it will produce high-profit margins. Meanwhile, it is because our customers are increasing.
Note 2: The net operating profit percentage indicates that Freestyle Company net profit as a percentage of sales. This figure tells us how much our revenue remains as profit after all operating expenses have been deducted. The Freestyle Company shows a rapid increase throughout Year 1, 2 and three developing from 6% to 18% to 35%. An increase in this operating profit margin is beneficial to the business and has been established due to an increase in gross profit and viable management decisions such as cost control. The reason why the net operating profit has been increased rapidly it that advertising play a key role, our investment on digital marketing to promote our project; it can attract people who never touched away travel like Freestyle Company. Our figures indicate a proportion of revenue converted to operating income per euro and shows that the profitability of the Freestyle Company is improving over time.
Note 3: With this ratio, we were determining the total capital required to finance the assets of the business. The Freestyle Company achieved ROCE of 35% in Year1, 9.6% in Year 2 and 17% in Year 3. This tells us that for every $ invested in the Freestyle Company both debt and equity. The Company generated $35 in operating profit for Year 1, $9.6 in Year2 and $17 in Year 3.
Note 4: By working out this ratio we calculated the return before interest for an ordinary shareholder, so for the numerator, we deduct loan interest charges for Year 1 and Year 2 from the net profit. For Year 1 the Freestyle Company achieved an ROE 5% which increased in Year 2 17.8% and Year 3 44.9%. We have an incredible increased on ROE which meaning that Freestyle Company is efficient in generating income on any investment. However, going forward our Company will use this ratio carefully when making decisions regarding additional investment.
Note 5: The non-current assets turnover indicates how much each $1 invested in non-current assets generates in sales. By this, we can measure the utilization that the Freestyle Company is obtaining from its investment in fixed assets. In Year 1 the ratio was 0.85 telling us that for every $1 invested in non-current assets, sales amounted to $0.85 In Year 2 this increased to $0.98 and in Year 3 increased again to $1.24.
Note 6: Interest cover indicates how many times profit covers interest payments on debt before interest. Due to The Freestyle Company having a high-interest cover means the less likely interest payments will not be met and so this results in low financial risk.
Feasibility&Risk Assessment
The owners of FreeStyle Company have examined income statement and statement of financial position to determine the accuracy, accountability, and reliability of their business. The balance sheet helps to show the stability of the business while the income statements show the annual profit gotten by the company. First of all, the Freestyle Company has an outstanding first three years, for instance, sales have increased $120,700 from Year 1 to Year 3, with operating profit increasing from $14,100 to $125,514. Moreover, the ROOE increases rapidly from 5% to 44.9% from Year 1 to Year 3 due to an increase in sales. The overheads have increased over the three years, but that will not have the harmful effect on Company performance. The financial statements provide limited information, so it does not factor tax in this study.
In its financial statements, freestyle company does not factor in tax. The cash budgets help Freestyle Company to examine the usage of cash and their sources. The owner should closely monitor transport inventory turnover to minimize wastage through loss and misuse of funds. The owners of the company invested heavily in the company. The starting capital was used to stock, furniture, fittings and a motor vehicle. The freestyle company is located in an urban setup. This feasibility has been conducted with the assumption that its offices are located in an urban town, and there are few competitors. Freestyle company has taken into consideration technology advancement, and we acknowledge advertisement as a tool for improving our marketing strategies. Daily cash flows may indicate that the revenues and costs do not add up due to inefficiencies in some sectors.
Additionally, the costs may be too high such that the business ends up making losses. Nevertheless, the company has an adequate team of professionals who are there to ensure that the books of accounts are always accurate and can be used to reflect the actual nature of the market. In addition to that, they are vital to the day to day decision making aspects.
Reporting cash is becoming a key indicator of financial performance, and the FreeStyle has paid considerable attention to the three years projected. The most critical indicators in the case of The FreeStyle are personal design and travel group. The two owners have the highest risk in the business. This finance $280000 in payment of wages, rent and some early to buy necessities. High rents can be a potential risk to the company. |
