Sharp Ltd Company Case Study & Finance for Managers - Accounting Assignment Help

Assignment Task

Learning Outcomes

1.Identify the main features characterising the structure and content of financial information for organisations.
2.Interpret a range of performance indicators to measure the financial performance and financial position of an organisation.

C: Assessment Task

Sharp Ltd is an electrical wholesaler, it is a well-established and successful company, having trading for several years. Turnover has risen, from £10.5 million in 2020, to £12 million in 2021 following a marketing campaign in 2020. Your task as the Finance Manager is to prepare a report to assess the financial performance of the company baseon the financial ratios below. These ratios are based on the Statement of profit or loss and Statement o financial position of Sharp Ltd and show the performance of Sharp Ltd over the last two years of trading 2021 2020.

• Gross profit margin $.2 18.1
• Net profit margin !.6 13.5
• Return on Fixed Assets .7 14.5
• Current assets ratio (to 1) 1.51 2.33
• Acid test ratio (to 1) 0.87 1.42
• Inventory turnover ratio (times) 5.09 4.69
• Trade receivables’ collection
• period (days) 57.2 120.6

Required: Using the ratios above, you will prepare a report of approximately 1,500 words +/-10% which will include the following information. • An explanation of how business accounts can be interpreted and better understood using ratio analysis, and the value and purpose of each ratio listed above using academic references where appropriate, this section will also include an introduction. (35 marks). · A detailed analysis of the performance of Sharp Ltd in 2020 compared to 2021, identifying any areas of strength and weakness. Also identify possible causes of the changes in the ratios.

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