Financial Accounting Term Paper
Carvings shop can also be advertised in the public places and also on local radio stations for increase the market niche and profitability in little time. She should give enough time for analysis the business venture. Testing of the estimated costs will give an appropriate overview of how the business should be able to carry out its operations. Competitiveness is seen as the main preoccupation in the current world economy for both developed and advancing nations. Even with its seen and unseen importance, competitiveness concept is frequently misunderstood. Trustworthy of the intermediaries and customers should be established to increase the confidence in carrying out business activities. A reliable business plan is paramount before the start. This will include identifying and recording the specific source of goods, the market, and the specific amount of the money the proprietor is willing to invest.
Such will help the proprietor to picture how the business will run and be able to formulate the necessary strategies that will see the business succeed in the near future. The legal formalities including the taxes and abiding by the rules and regulations of the government also determines the continuity of the business. Nonetheless, the above mentioned conditions are crucial if not adequate. The microeconomic level of the economy is the one that can create wealth and to do this, it must be grounded complexity of actual companies and in the excellence of the microeconomic environment of business under which the competitiveness of firms of a country is located (Ni, Kamiya and Ding, 2017). Without an improvement in the capability of the microeconomic, political, microeconomic, legal, and social reforms will not be of importance.
Right from its inception, Nancy business began there and then to statistically analyze microeconomic bases of competitiveness as well as affluence across a variety of European markets. The business has an overwhelming task, based on the requirement of measures and compere the sophisticated variety of country conditions that back a high and sustainable productivity level The potential huge business by Nancy efforts purposes to proceed beyond analysis of wide, aggregate variables characteristic of most economic growth examination and give an outline for nations and organizations to comprehend their thorough competitive strengths and weaknesses. Nancy current operating expenses at the start of the business would be high and as such the business does not require to involve in overtrading. It would mean an increase in the company cash inflows and control of the outflows through proper management of short-term assets of the firm.
Profit and Loss Analysis for the first year of operations by Nancy Enterprises Assumptions; The assumption made is that Nancy Enterprises started it operation in January 2017 and as such it close of year business is January 2018. The figures as used in the profit and loss statement below are a common of the real figures as depicted in the case study and imaginary figures to fulfill the normal profit and loss analysis in the ideal situation. The business is also assumed to have recorded the business transactions in the books of entry and as such the figures gave been extracted for use in the construction of the profit and loss analysis table as shown below. 63 Interest Coverage — The company has an overall upward trend in its profitability ratios right from the base year to the target year.
A look at the ratios provides an insight and a reason for potential investors to invest in the company shares. There are possibilities of risks in the investment into the company but based on the previous financial information provided, the company stands not to make losses. A decision by investors to venture in into buying the company assets in terms of stocks and shareholding has less associated risks. Networking is probably the best way to go for any professional out there looking for a connection for market or any other help whatsoever. General prices of goods and services have kept increasing over the years. According to Keynes, inflation is due to pressures in the economy that manifests themselves through the price increase.
In his book ‘Keynesian economics' the author interprets inflation as an upsurge in the formally standard prices of commodities, canonic items included. Keynes argues that inflation argues that inflation can occur in two phases; demand pulls and costs push. Demand push is whereby the rise in prices is cost by demand for the commodity in question. Countries with such lowly rated currencies have a lot to do to realize an improved economic development. Their citizens have to acquire a lot of money to buy so little, which is a source of strains in their lives as they will have to work too hard. Reduced trust in the currency is a result of high inflation. Citizens and traders will opt to indulge in the barter trade instead.
It is so hard to control such high levels of increase, which is the reason specialists and country economists should be adequately be consulted or rather be involved in planning and implementation of economic activities. 8125 The initial capital outlay suppose that Nancy Enterprise invests the whole amount in the business would fetch £750561. 8125 after three fiscal years of active business. Direct Cost Purchase activity per month Maintenance costs( in pounds) 10,000 48024 9,000 12960 Applying the per-low method we have: Variable Cost For meal preparation= Change in cost of raw food / Changes in activity = (48024-12980)/ (7200-6480) Variable Cost For meal preparation= Change in cost of raw food / Changes in activity = (48024-12960)/ (7200-6480) In order to run the sales event smoothly and avoid chaos happen during the festival, Nancy enterprise will increase the inventory from the supplier and employ well-experienced sales assistance from the headquarters.
We will also have well communicated with the local police to ensure the events won’t cause any trouble to the public order and everyone’s safety. Nancy’s business is a local and starting enterprise that offers a comprehensive pack of durable goods in relation to jewelry and ornaments. This is done through the incorporation of its services and products to some local firms. It is also going to be achieved by liaising with the local firms through payment of commission as levies to the firms upon transportation of their products. The case of Oregon that accepts pay of $220 for its services to Nancy is an example. Thus proposed total fixed costs for the start are £2000. Fixed costs are expressed per period.
There are possibilities of risks in the investment into the company but based on the previous financial information provided, the company stands not to make losses. A decision by investors to venture in into buying the company assets in terms of stocks and shareholding has less associated risks. The company is optimally in operation at the stock exchange market following the performance of other firms of its level and that of competitors. In an attempt for Corporation to make a relatively larger share of the market, the company underprices its shares and sells them as a lump sum deposit. The aunt Nancy Enterprises being a business that has kept an eye on making profits upon commencement and if there is anything to go by make it in as growth is concerned, should put the following in consideration.
The company net cash flows as indicated in the table right from the base year are overall increasing and in such cases, the company has chances of making improvement in future business transactions. The use cash flow ratios above provide insight into the flow of cash in the firm making a good grounding for prediction of the company net cash flows for the next financial year. Ratio Analysis Ratios Significance of the ratio Forecast Current Ratio 2. 50 Determination of current assets available to offset short-term debts Quick Ratio 1. 92 Show how fast the business can come up with cash on a short notice Inventory Turnover 68. 6) = £108,000 Recommendations It is arrived at based on the shortlisted options by first considering the advantages and disadvantages. I also try to figure out the inconsistencies in reasoning and be able to question any assumption if there is one that exists that I made from the start.
I do evaluate every single option against the possible vital factors all to consider the effect realized through a combination of all the elements. I weight every factor regarding importance putting a particular emphasis on the critical factors. Here it calls for the creation of a decision matrix to help out in the entire analysis. Conclusion British international reserves increase annually by an approximate of 0. This a positive approach in the shaping of the country economic pillars. The nation however is experiencing a break down in some other parts of its economy due to a weakening business environment thus affecting competiveness in business. They comprise options and futures for the contract as well as pricing models that take a different duration.
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