# (BM414) Financial decision making | My Assignment Tutor

London School of Science and Technology Module: (BM414) Financial decision making CW1 N O T E S 10 March 2021 Analysis: (noun) – was derived from a VERB – analyse   Interpretation: (noun) was also derived from a VERB: interpret [Court – interpreters]   Communication (noun) —à> verb? Communicate   PROFIT  ==è>> GAIN     OBJECTIVE -à what do you want to ACHIEVE? Savings Investment –à>> TIE IT UP! ……………………………………………………………………….   Analysis (noun) –>> what is the VERB from which this noun is derived =è> ANALYSE – examine – divide into small parts   Interpretation (noun) ->> INTERPRET   Savings:   Investment:   An increase in staff turnover. The business suddenly becomes unable to pay its debts.     The Cash Flow Statement COMPLEMENTS the Income Statement and the Balance Sheet.   INCOME STATEMENT ………………………………………………………………………………………… To calculate “Cost of Sales” Opening stock Add: Purchases Minus/Subtract: Closing Stock ……………………………………………………………………………………… Sales Minus: Cost of Sales Result: Gross Profit. ……………………………………………………………………………………… Gross Profit Minus: Expenses Result: Net Profit ………………………………………………………………………………………     BALANCE SHEET   The Account Equation       —————————————————————————————————— “Inventory Limited” reported goods sales numbers this quarter. The Gross profit was reported better than in the previous quarter. The company reported £230,000 as of the opening stock, £450,000 as closing stock and £1,050,000 as net purchases. You are required to compute the cost of sales for Inventory Limited. ————————————————————————————————— Opening Stock-à    £230,000 Plus: Purchases –à> £1,050,000 Minus: Closing Stock -à>   £450,000 Cost of Sales –   £830,000 —————————————————————————————————                           Executive Summary   Table of Contents     TASK 1: REPORT TO SKANSA PLC’S MANAGEMENT  Introduction             Analysis  1. Explain the structure of and terms used within the financial statements.2. Apply management accounting techniques for planning, control and decision making within the organization.4. Demonstrate knowledge of the role of finance and accounting within the organisation with respect to both reporting and decision-making aspects.The functions of accounting and finance within SKANSA PLC Functions   Roles   Duties   Evaluation   Conclusion   TASK 2: RATIONS CALCULATIONS, ANALYSIS AND COMMENTS  Importance of ratios in business and for SKANSA PLC   Five ratios for each of the two years: Return on capital employed   Net profit margin   Current ratio   Average Receivable days/ Debtors collection period     Average Payable days/ Creditors collection period Comments on the performance of SKANSA PLC’s performance, results, causes, reasons, and effects for the changes in the ratios.   Evaluation     Conclusion   References   Appendances

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