TABLE CONTENT

NO CONTENT PAGE
1 ACKNOWLEDGEMENT 3
2 INTRODUCTION 4
3 TASK 1
4 TASK 2
5 TASK 3
6 TASK 4
7 TASK 5
8 CONCLUSION
9 REFERRENCES

ACKNOWLEDGEMENT


First and foremost, we would like to thank to our lecturer of this project, Sir Irfan Ullah for the
valuable guidance and advice. He inspired us greatly to work in this project. His willingness to
motivate us contributed tremendously to our project. We also would like to thank his for showing
us some example that related to the topic of our project. Besides, we would like to thank the
authority of Linton University College for providing us with a good environment and facilities to
complete this project. Also, we would like to take this opportunity to thank to the School of
Business Management (SOBM) for offering this subject, Business Project. It gave us an
opportunity to participate and learn about the Business Establishment and Development. In
addition, we would also like to thank Mr. Google which provides us valuable information as the
guidance of our project. Finally, an honorable mention goes to our families and friends for their
understandings and supports on us in completing this project. Without helps of the particular that
mentioned above, we would face many difficulties while doing this project.
Task 5
The Impact of Various Sources on the Financial Statements of London Biscuits Bhd

Financial analysis also calls as financial statement analysis or accounting analysis. It is prepared
by those professionals who using ratios that used of information taken from financial statements
and other reports such as a certain company annual report. Besides that, a financial analysis is a
relationship that indicates about the industry activities, liabilities, current assets, account
receivable and so on. It is the process of evaluate some business, some project and budgets to
determine their suitable for investment. It also refers as an assessment of the viability, stability
and profitability of a business. Financial analysis can extrapolated a company past performed and
estimated their performing in future. So, the purpose of doing the financial analysis is in order to
avoid the error conclusion about the firms financial condition. Besides that, it also provides
financial position or performance of a company that is useful for user to make economics
decisions. There are several measuring instrument may be used to evaluate including horizontal
analysis, vertical analysis and ratio analysis.
Ratio analysis helped to identify the strength and weaknesses of a company. It can clearly
determines and highlighting all the trends and exposed the strength and weaknesses of a
company. It compared past ratio or ratio of other firm in the same or different industry. Other
than that, ratio analysis gives a meaningful comparison of firms financial data with other firms.
The company I decided to choose for evaluating the financial position and performance using
accounting ratio analysis are London Biscuit Bhd.

Liquidity ratio
Liquidity ratio defined as it its ability to meet debt obligations. It measure the ability of a
company to use the cash retire their liabilities immediately and company short-term financial
situation. Besides that, it also defined as the question does the assets in a company enough to
cover their liabilities and that is will the firm have the resources to pay the creditors?
Net working capital
Net working capital = current assets current liabilities
London = 109,188,926 - 152,378,455 = - 43189529
Conclusion: London Company having a short-term financial problem because their current
liabilities are too much that means their current assets is not enough to cover all their liabilities.


Current ratio
Current ratio = Current assets
Current liabilities
London = 109,188,926
152,378,455
= 0. 716
Conclusion: London Company has 0.716 available assets that can be converted into the cash for
every dollars company owes. In short, London Company having a difficult meeting current
obligation. They will begin paying their bill slowly, borrowing from its bank and so on.

Acid-test (quick) ratio
Acid-test (quick) ratio = current assets (inventory + prepaid expenses)
Current liabilities
London = 109,188,926 (31,562,835 + 6,227,271)
152,378,455
= 0.469
Conclusion: London Company cannot effective pay its liabilities currently because it having low
quick ratio. They having 0.469 which has less than 1, the inventory is not including from the sum
of assets financially that means in this ratio.