Using the trial balance information provided, prepare a Profit and Loss Statement of Yeovil Place for the year ended 30th June 2018 and a Balance Sheet as at that date.

Financial Statements and Performance Analysis Report

The following Trial Balance was extracted from the books of Yeovil Place as at the close of business on 30th June 2018.

Debit Credit
£ £
Leasehold Premises 20 000
Furniture & Equipment 8 800
Capital Invested 16 979
Stocks at 01/07/2017 900
Purchases 40 528
Sales 84 436
Creditors 4 000
Wages 12 730
Bank Loan 4 500
Council Tax 1 640
Gas & Electricity 2 444
Debtors 150
Business Expenses 1 456
Cleaning 760
Maintenance 1 000
Advertising and Promotions 2 550
Owners Drawings 11 000
Loan Interest 500
Cash in Hand 890
Bank Balance 4 567
TOTALS 109 915 109 915

Stocks as at 30th June 2018 was £720

Required:

Task 1:
Using the trial balance information provided, prepare a Profit and Loss Statement of Yeovil Place for the year ended 30th June 2018 and a Balance Sheet as at that date. (40 marks) – Please ensure that you show all your workings to gain full marks. You may use templates provided.

Task 2:
Comment on the performance of the business using ratio analysis, conduct a Cost and Revenue analysis and advise the company on ways of improving profitability and performance based on the information above and the result from 1 (above). (35 marks) – 1 500words

Part 2 of the question requires you to address the following elements:

– Define costs and Identify and evaluate different types of costs incurred and their behaviour. (5 marks)
– Define Ratios and evaluate ratios as a Performance Management tool including benchmarking factors. (5 marks)
– State the 5 different classes of Ratios. (5 marks)
– Define each Ratio and calculate as per given formulae and discuss influencing factors. (15 marks) – see appendix for formulae.
– Give recommendations on how the company can improve performance. (5 marks)

Specific Marking Criteria for this Assignment

Content
Q1.
Have you constructed the trading, Profit and Loss account using the correct format? Have you labelled it using the correct heading?
Have you constructed the Balance sheet using the correct format? Have you labelled it using the correct heading?

Q2.
Have you defined costs and identified the different types of costs?
Have you identified and evaluated the different types of costs and their behaviour?
Have you defined ratios and appraised them as a performance management tool; and identified the different classes of ratios?
Have you defined and calculated the different types of ratios and analysed the results? 40 marks

Recommendations and Conclusion
Have you given recommendations on how the business may improve its performance? Identify ways in which the business could cut costs or improve revenue?

Have you provided a summary of the report in conclusion? Have you highlighted the important factors to performance management and evaluation? 10 marks
Support through relevant literature
Have you used appropriate literature and relevant academic references to support your arguments?
Have you used relevant sources (e.g. journal articles, books, annual reports, industry reports etc.) to back up your arguments? Have you used a range of reliable sources? Have you used appropriate citations throughout the presentation? Have you included the financial statements as appendices to the report? 10 marks
Presentation
Have you formatted the assessment according to the guidelines given? Have you provided an appropriate title and appropriate headings? Is the assignment well written? Does the analysis follow a clear structure? Have you included a title page and a reference list? Have you correctly applied Cite Them Right for your citations and reference list? 10 marks

TOTAL 100 marks