Profit & Loss Account for Unknown Ltd.

Year ending Apr09

$000’s
Sales Revenue 3000
Cost Of Sales ?
1500

Gross Profit 1500

Expenses ?
1045

Net Profit (b4 I&T) 455

Interest 155
Tax 120
Net Profit (after I&T) ?
180

Dividends 80
Retained Profit 100
?
 The Balance Sheet
It shows the
What a business What a business
owns (assets) owes (liabilities) • value
• liquidity
• gearing
Sources of of a business on
Net Assets Finance.
(Assets - (Where the money
a specific date
Liabilities) came from to acquire
their Net Assets)

Be careful of
Long-term Liabilities,
They are USUALLY
Sources of Finance
 Balance Sheet for HooNo’s plc, as at 23rd September 2009

FIXED ASSETS
Buildings,
Machinery etc

CURRENT ASSETS
Stock,
Cash,
Debtors etc

LONG TERM LIABILITIES

CURRENT LIABILITIES Debentures,
Overdraft, Loans etc
Creditors etc
CAPITAL & RESERVES
Shares,
WORKING CAPITAL Retained Profit
= Current Assets – Current Liabilities Personal Finance etc

NET ASSETS NET CAPITAL

= FA + CA - CL = LTL + C&R
 Balance Sheet for Unknown Ltd.
Apr 21st 2009

$000’s
Fixed Assets 3000
Current Assets ?
2000

? LIABILITIES
CURRENT 1000
Working Capital ?
1000

Net Assets Employed 4000

Long Term Liabilities 1000

Capital & Reserves ?
3000

Net Capital Employed 4000

?
 page 401
For PaulH Balance Sheet Structure –
note where dividends and taxation are entered.

Read&Summarise p 402 Uses&Limitations

Q 3.5.5
With the following changes for 2007 …
Share Capital 170 & Retained Profit 55
 31st Dec 2007 31st Dec 2008
Fxd Ass 250 Fxd Ass 250
Crnt Ass Crnt Ass
Cash 20 Cash 25
Debtors 50 Debtors 70
Stocks 95 Stocks 100
165 195
Crnt Liab. Crnt Liab.
Creditors 50 Creditors 50

Overdraft 10 Overdraft 20
60 70
WRK. CAP. 105 WRK. CAP. 125
NET A. EMPL 355 NET A. EMPL 375
LTL (Deben.) 50 LTL (Deben.) 50
LTL (Loans.) 80 LTL (Loans.) 50
C&R (Ret. Prof) 55 C&R (Ret. Prof) 75
C&R (Share C) 170 C&R (Share C) 200
NET C. EMPL 355 NET C. EMPL 375