Accounting Evaluation And Forecast Essay Example | Topics and Well Written Essays - 2250 words

Accounting Evaluation And calculate - Essay ExampleCarter and Usry mentioned that In Reality, planning and controlling are simultaneous, cannot be separated, and an interconnected process. in spite of appearance this elaboration we will evaluate performance of the Aberdare - Super Service Mini Market and further more recognise Income Statement and Balance sheet forecast for planning purposes. According to the financial ratios, Aberdare posses an overall weaker performance, compare to the Pernarth mini mart. The only ratios that exceed Pernart mini market are sales/operating assets ratio and the interest big top ratio. The sales/operating assets ratios present a slight lead on Aberdares effectiveness on using its operating assets to produce sale, while the interest cover ratio display Aberdares pause performance on taking advantage of debts to finance operations. However, financial ratios should not be used as a sole instrument of measuring performance. According to available d ata, Aberdares sales in 2004 are amounted to $ 1,250,000 and the operating get ahead is $ 217,000. This has a relatively significant difference compare to Pernarth mini market, which produce a sales number of only $ 1,000,000 and operating profit of $ 190,000. Thus, in actual numbers, Aberdare mini market contributes more income to the business. PernarthAccording to the financial ratio, Pernarth is overall better than Aberdare mini market. The ratios indicated that pernarth has a better performance in cost of1. Effectiveness of operation, displayed by the Operating Profit/Operating Assets ratio, Sales/Fixed Assets ratio, and Sales/Current Assets ratio. These ratios make out that Pernarth uses its assets more effectively to produce sales and profit.2. Efficiency of operation, displayed by the Operating Profit/Sales ratio, terms of Sales/Sales ratio, Sales/Stock ratio, Expenses/Sales ratio, and Sales/Stock ratio. These ratios eviscerate that Pernarths have slight cost and expen ses to produce equal sales number and profits compare to Aberdares. 3. Liquidity of the mini market, displayed by the Interest Cover ratio, caravan ratio, Current ratio, and Quick ratio. There ratios describe that Pernarth mini market require less debts compare to Aberdare mini market to run the business.II.2.WeaknessesAberdareAs stated before, compare to Pernarth, Aberdare mini market display a slightly poorer performance. Most of the ratios display only small difference between the devil store, however, significant different appears on Sales/Current Asset ratio, Sales/Stock ratio, Interest cover, Gearing and Quick ratio. The Interest Cover and Gearing ratio indicate that Aberdare has too much debt within its financial structure. The Sales/Current Assets ratio, Sales/Stock ratio and Quick ratio on the other hand, describe that the mini market employ too much current asset on the current year, peculiarly too much stock.PernarthThe mini market is superior according to any measurem ent of the financial ratios, however, in real numbers, the mini market does not seem to generate as much sales and profit as Aberdare. Thus, relating to the fact that Pernarth is the most profitable