Abdulalah Al-Jobore
Unit 6: Financial Accounting
P4 M3
P4 Explain the purpose of a limited company’s cash flow statement.
The financial position of the business 2015
and 2015
The table on the left side, showing the
trading, profit and loss accounts of Jones
Haulage business. These statements, shows
the account figure of the business in 2015
and 2016 which can help to compare both
figures form the two years ,as well as
showing you the financial positions of the
business and how well they are.
The financial position of the business looks
really healthy as the figures has changes to
much since 2015. The sales in 2015 were
£55,250, however, in 2016 that had a total of
sales of £863000 which seems that the
business’s sales has increased so fast since
the last year. Therefore, the gross profit has
increased doubles times in 2016, therefore
now they have a net profit of 53,340 in 2016
which shows how profitable company they
are. These figures in the profit and loss
account shows a huge increase in the profit,
therefore, the business’s financial positions is
healthy due to the fact that are making more
profit than last year in 2015.
Working capital
Business use working capital as the day to
day money that needed to pay costs and
expense such as bills which enable Jones
Haulage to trade. The working capital is
the different between the business’s
current assets (such as the cash and
stock) and its current liabilities (which the
debts that must be paid in the short
term).Therefore, the working capital can
measure the efficiency and health of
Jones Haulage Ltd.
1
Unit 6: Financial Accounting
P4 M3
P4 Explain the purpose of a limited company’s cash flow statement.
The financial position of the business 2015
and 2015
The table on the left side, showing the
trading, profit and loss accounts of Jones
Haulage business. These statements, shows
the account figure of the business in 2015
and 2016 which can help to compare both
figures form the two years ,as well as
showing you the financial positions of the
business and how well they are.
The financial position of the business looks
really healthy as the figures has changes to
much since 2015. The sales in 2015 were
£55,250, however, in 2016 that had a total of
sales of £863000 which seems that the
business’s sales has increased so fast since
the last year. Therefore, the gross profit has
increased doubles times in 2016, therefore
now they have a net profit of 53,340 in 2016
which shows how profitable company they
are. These figures in the profit and loss
account shows a huge increase in the profit,
therefore, the business’s financial positions is
healthy due to the fact that are making more
profit than last year in 2015.
Working capital
Business use working capital as the day to
day money that needed to pay costs and
expense such as bills which enable Jones
Haulage to trade. The working capital is
the different between the business’s
current assets (such as the cash and
stock) and its current liabilities (which the
debts that must be paid in the short
term).Therefore, the working capital can
measure the efficiency and health of
Jones Haulage Ltd.
1
