A21 Business Studies (Company Accounts) Company Accounts

Users of Company Accounts Shareholders Dividend information Profits Business strength Government Investment undertaken Local economy Banks Financially stable Creditworthiness Directors Wealth of shareholders Encouraging shareholders Suppliers

Annual Report Company Aims Chairman’s Report Directors Report Auditors Report Financial Statements

Balance Sheet Liabilities Assets Shareholder Equity Non-current liabilities Current liabilities Non-current Tangible Intangible Current assets

Cash Flow Statement How cash goes out How cash goes in

Cash flow Problems Too much cash Too much credit Too much stock Weak economy Over trading Seasonal trade

Cash flow Solutions Fast turnover Longer repayment periods Remove idle assets Sub contracting Collect debts Leasing

Advantages of Published Accounts They give an insight into a company’s finances Can be used as a tool by which to judge the performance of the business They can be a useful tool in the decision making processes

Limitations of Published Accounts A22 Business Studies (Company Accounts) A21 Business Studies (Company Accounts) Limitations of Published Accounts Deal mainly with numerical information Does not deal with qualitative issues Go out of date quickly Limited for decision making - contains summarised information Window dressing may occur