P5 profit and loss

illustrate the use of budgets as a means of exercising financial control of a selected company

A trading account has these features. This means that it takes company x days to pay for goods they have bought on credit.

An account owned by an financial institution that keeps track of all your outcomes and incomes in certain periods. Public Limited Companies PLCs must publish their accounts so investors can see how well they are doing. For example banks loans. It can therefore help a bank or other lender to decide whether or not it is worth to invest in the business. The profit and loss statement is a financial statement that shows the revenues costs and expenses incurred during a certain period of time. What is a profit and loss account The profit and loss account is a useful tool as it shows how much has been made at the end of a financial year. Current assets are those that can be converted into cash more easily and are only retained for a short time — for example when an office needs new chairs or new desks with computers, it is expensive but not like a house or car price. The balance sheet below her is from from Vodafone. Your account is prepared to determine your gross profit or gross loss. Liabilities- Liabilities are legal obligations payable to a third party. For smaller companies like private limited companies and sole traders it is useful to see at the end of the year how much profit you have been made. The two main financial statements are profit and loss accounts and balance sheets. When you are creating a balance sheet it is important to show how the business finances everything, also if it is using loans from investors or other people.

For smaller businesses like sole traders and LTDs it is useful to see how much profit is made at the end of the year. For example banks loans. Ratios can help the business to see how it is doing now and allow it to see how it compares to last year or the year before and against competitors These ratios can be used to identify any trends over time.

The profit and loss statement is a financial statement that shows the revenues costs and expenses incurred during a certain period of time.

Producing a balance sheet is important as it shows how the business is financed It also allows investors to see how much the business is worth based on assets 7 P5 —Interpret the contents of a balance sheet You need to explain the purpose of the balance sheet and the following items that are contained in the balance sheet fixed assets — with examples current assets — with brief descriptions of stock, debtors, bank balance current liabilities — with brief descriptions of creditors, bank overdraft long-term liabilities share capital reserves retained profits. Your account is prepared to determine your gross profit or gross loss. This means that it takes company x days to collect money owed to it from goods bought on credit. For example banks loans. For a smaller business such as private limited companies and sole traders it is useful to be able to see how much profit has been made at the end of the year. What is a profit and loss account The profit and loss account is a useful tool as it shows how much has been made at the end of a financial year. The items of direct expenses and direct revenue concerning the year they are in are taken onto it. If a company is doing great and growing it also means the shares will increase in prise and they will have more profit. It can therefore help a bank or other lender to decide whether or not it is worth to invest in the business. This account can help a bank or lender decide whether a business is worth the investment. For smaller companies like private limited companies and sole traders it is useful to see at the end of the year how much profit you have been made. Because the balance sheet shows the assets of the business, it also gives the investor a snapshot of how much the business is actually worth.

What are the benefits of preparing a profit and loss account It can help a bank or other lender to decide whether or not it is worth the risk to invest in a business. Because the balance sheet shows the assets of the business, it also gives the investor a snapshot of how much the business is actually worth.

P5 profit and loss

For a smaller business such as private limited companies and sole traders it is useful to be able to see how much profit has been made at the end of the year.

Public Limited Companies PLCs must publish their accounts so investors can see how well they are doing. Producing a balance sheet is important as it shows how the business is financed It also allows investors to see how much the business is worth based on assets 7 P5 —Interpret the contents of a balance sheet You need to explain the purpose of the balance sheet and the following items that are contained in the balance sheet fixed assets — with examples current assets — with brief descriptions of stock, debtors, bank balance current liabilities — with brief descriptions of creditors, bank overdraft long-term liabilities share capital reserves retained profits.

Balance sheet A balance sheet is important because it gives a snapshot showing: Assets things a business owns Liabilities debts a business owes Equity the amount invested in the business Fixed assets are assets that are owned and expected to be retaining for one year or more for example, lands, buildings, vehicles or equipment. Ratios can help the business to see how it is doing now and allow it to see how it compares to last year or the year before and against competitors These ratios can be used to identify any trends over time. A trading account has these features. Current assets are those that can be converted into cash more easily and are only retained for a short time — for example when an office needs new chairs or new desks with computers, it is expensive but not like a house or car price. For smaller businesses like sole traders and LTDs it is useful to see how much profit is made at the end of the year. Your account is prepared to determine your gross profit or gross loss. Public Limited Companies PLCs must publish their accounts so investors can see how well they are doing.
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Unit 2 P5: interpret the contents of a trading and profit an by Mark Grant on Prezi