ipl-logo

ASDA Balance Sheet Analysis

979 Words4 Pages

BALANCE SHEETS As explained above, the balance sheets show the shareholders three major things: • Assets (These are things that are owned by ASDA) - Materials that an entity has acquired or purchased, and that has money value (its cost, book value, market value, or residual value). An asset can be physical, such as cash, machinery, inventory, land and building. Assets shown on their ASDA’s balance sheet are usually classified according to the ease with which they can be converted into cash. • Fixed assets are owned by ASDA and are expected to be retained for a year or more, things like buildings, trucks and delivery buses or lands. • Current assets are those that can be converted into cash easily. These assets are retained for a short time. …show more content…

• Equity (Capital) (This is the money invested in the business) - On a balance sheet, equity represents funds contributed by the owners of ASDA plus retained incomes or minus the gathered losses. The balance sheet gives the shareholder an idea of what ASDA is worth and also the assets of ASDA. A balance sheet must balance. Public limited companies must publish balance sheets and by looking at the data contained within them it is possible to value a business and estimate the net worth of a company. BASIC RATIOS - This is a very important technique of financial analysis in which measures and financial progress are converted into ratios for meaningful comparisons, with past ratios of ASDA’s financial progress and ratios of other firms in the same or different industries. Ratios are used to compare over time to see if there are any trends and also compared between businesses within the same industry (competitor). The three main things ratios are used for are: • Solvency • Profitability • Determining …show more content…

The acid test ratio is therefore 2.25. This test shows the assets compared to liabilities, like current ratio, but by taking out the stock figure from the current assets, it shows how well a business can meet its liabilities without having to sell stock. Profitability Basic ratios can also show how profitable a business really is, either just for a short period or over a long term. There are three ways of working out how profitable a business rally is: • Gross profit percentage • Net profit percentage • Return on capital employed GROSS PROFIT PERCENTAGE - (GPP) is a ratio that can be taken from ASDA’s income statement (which is a financial statement that measures ASDA’s financial routine over a specific accounting period) and the gross profit percentage reveals the profit left over from ASDA’s operations after all overhead costs have been taken away from the revenues. This calculation shows gross profit as percentage of the turnover (the income ASDA

Show More
Related

Xacc/280 Week 3 Financial Ratios Paper

422 Words | 2 Pages

The three financial ratios are important tools that judge the leverage, profitability, and liquidity. “Profitability ratios are ratios that measure the rate of return a firm is earning on various measures of investment.” (2018, p. 150) This is important to a business because the whole purpose of a business is to make a profit, profitability shows the business exactly how it is doing and if the business is achieving that goal. “Profitability ratios also have many major ratios one being return-on-equity (ROE), calculated by dividing net income (profit) by owners’ equity, measures the income earned per dollar invested by the stockholders.”

Read More

Wgu Audit Task

529 Words | 3 Pages

Ensure that the property, plant and equipment exist and are genuine assets of the business and are beneficially owned by the business and any restrictions, pledges or liens on the property, plant and equipment are identified and adequately disclosed in the financial statements. At the same time, have to prepare fixed assets schedule as to attachment for this section. Test the mathematical accuracy, agree opening balances to prior period working papers and agree closing balances to the nominal ledger and investment ledger where maintained. Vouch against invoices, contract notes, and agreements for any additions or disposals in order to ensure that all property, plant and equipment are included in the balance sheet and gains or losses on realization of property, plant and equipment are correctly stated. In additions, ensure the property, plant and equipment are properly disclosed and

Read More

Xacc/280 Week 4 Financial Statement Analysis

470 Words | 2 Pages

The cash flow statements are used to describe the operating activities, investing activities, and the financing activities. The statement will show if the net balances have increased or decreased in cash during the year. Cash balance will also be added in from the previous year. The cash balance for the year will determine the ending cash the company must either start paying on their debt they owe or expand within the company (Bethel University,

Read More

Est1 Task 3

864 Words | 4 Pages

Task 3 Limited companies have a legal duty to produce a balance sheet of their annual accounts which are submitted to Companies House, Shareholders and HM Revenue & Customs. Producing a balance sheet is essential for any organisation who wish to raise finance, the majority of lenders or investors will want to see a set of business accounts. A balance sheet will closely monitor the performance of the business, showing the shareholder’s equity, liabilities and assets of the business. Ratio calculations evaluate the financial results of any business in order to gauge its performance. Ratios allow businesses to compare against different principles using the figures on the balance sheet.

Read More

Hcs/531 Week 4 Health Care Paper

1417 Words | 6 Pages

(Arnow & Xakellis, 2001). Assets An asset is any item or property that can be considered to have value, owned by a person or business, in this case we will deal with that of the health care business area. “Cash, accounts receivable, notes receivable, and inventory are

Read More

Next Plc Executive Summary

544 Words | 3 Pages

They use current/cash ratio to find the answer to the question. Management also keeps an eye on company's short-term debts to find out short-term liquidity of the firm which shows its current position. The acid test ratio of 2017 shows that NEXT Plc can easily convert its assets to cash to pay its short-term debts. They are also interested to check the

Read More

Ski Mountain Inc Balance Sheet

1211 Words | 5 Pages

• Shows that the operating earnings are high compared to the debt. • Indicates a strong ability to generate cash from operations. Net Profit (margin) ratio has steadily increased from negative amounts in 2011 and 2012 to positive amounts in 2013 and 2014. • Company has avoided not being able to generate profit after all expenses have been

Read More

Xacc/280 Week 6 Accounting Analysis

223 Words | 1 Pages

Non-current assets obtained for continuing use over long period of time that more than one year. For example, building, vehicles and so on. While current assets that likely to be changed within short term between one year. For example, bank, cash, trade-receivables and so on. Liability is company’s

Read More

Tootsie Roll Case Study

1047 Words | 5 Pages

Financial ratios: a percent, rate, or proportion that expresses a mathematical relationship between two financial quantities Liquidity ratios: evaluates how quickly a company can convert short-term assets and liabilities into cash Current ratio: evaluates a company’s ability to pay its short-term debt (current liabilities) Comparing financial data: examining financial data from multiple years to see trend lines for key measures such as net income, revenues, cost of goods sold, operating expenses, and gross margin Acid-test ratio: a more conservative liquidity ratio that evaluates how quickly cash, short-term investments, and accounts receivable can be converted into cash Inventory turnover: how long a company holds onto its services or products (inventory) Profitability ratios: measurements which reflect a company’s ability to use its assets efficiently to produce profits Return on sales/profit margin: provides insight into how efficiently and profitably a company is being run, determined by dividing net income after taxes by net sales Ratio analysis: using comparisons to gather information and see trends Basic earnings per

Read More

Shopify Case

1080 Words | 5 Pages

The one assets that Shopify has with the most value is short-term investment and that is value at $308,401 (in thousands). The other assets that show value in the current assets section is cash and cash equivalent: $84,013 (in thousands), net receivables: $21,495 (in thousands) and other current assets $8,989 (in thousands). There are other assets that are held for longer periods that is valuable to the company and those are property plant and equipment ($45,719 (in thousands)), goodwill ($15,504 (in thousands)), and intangible assets ($6,437 (in thousands)). Since 2014 ($68,394 (in thousands)) to 2016 ($422,898 (in thousands)) Shopify’s total assets have increased $354,514 (in

Read More

What Is Polly's Pet Products Income Statement

1145 Words | 5 Pages

Total Stockholders equity, the total amount of capital given to shareholders in exchange for stock, is derived from the difference between the total assets and total liabilities ($350,000-$161,500= $188,500). R. The total Liabilities and Stockholder equity is the sum of the total liabilities and total stockholders equity ($161,500+$188,500 = $350,000) Conclusion: Polly’s Pet Products is a successful business as Polly’s Pet Products Assets is equivalent to its total liabilities and stockholder equity, there is a zero balance.

Read More

Analysis Of Financial Analysis: Whitbread PLC

3531 Words | 15 Pages

This, joined with its great cash-flow, has driven the board to suggest an entire year profit increment of 19.9%. This amplifies its reputation of double digit development, with sales growing by 11.4% in the course of the most recent five years and EPS and dividend per share becoming by 14.7% and 13.5% respectively. (Whitbread Investors,

Read More

Pros And Cons Of Accrual Accounting

1360 Words | 6 Pages

22nd November, 2015 Laura Schim van der Loeff Academic and Study Skills Pros and cons of “cash-flow accounting” and those of “accrual accounting” Yuting Cui 10888217 In an entity, financial accounting, or bookkeeping is the tool used to keep track on financial activities. Users, for example: managers, stockholders, etc. use the result of financial statements to justify behaviors of the entity and make efficient decisions accounting to the data provided. With different basis, companies have various methods to do bookkeeping. Two methods mentioned in this paper are cash-flow basis and accrual basis accounting.

Read More

Tesco Accounting Report

1656 Words | 7 Pages

Also many companies reporting related to the state of the value added or environmental information, these are concentrated in industrial sectors. The financial statements reflect the financial position of company, financial performance and cash flows of the company, it is significant to note that the correct depiction of the impacts of transactions and other events and circumstances according to the explanations and criteria identification of assets, liabilities, income and expenses go in the same outline (Brealey,

Read More

Ryanair Financial Ratio Analysis

2985 Words | 12 Pages

b) Profitability Profitability ratios are used in an effort to evaluate management’s ability to monitor and control expenses, and to earn a profit on resources committed to the business. These particular ratios assess a company’s strengths and weakness, operating results and growth potential. Moreover, they measure on the efficiency of assets being used to generate net income and sales. The higher the ratio, the more effectively a company is using their assets.

Read More

More about ASDA Balance Sheet Analysis

Open Document