Finance illustration Finance theory

Company accounts and interpretation

Business accounts are produced to meet the needs of their users. Typical users and the use they make of accounts is shown below:

Shareholders

To check on quality of direction of company, as well as profitability, solvency, value of company and other signs of health.

Employees

To check on job security and scope for wage and benefit increases.

Suppliers

To check that a company is generating the cash to be able to pay up.

Inland Revenue

For calculations of Corporation tax.

There are three main financial statements that are produced by company accountants. These are:

1. The Balance Sheet setting out the financial position of the company at a particular moment in time e.g. the year end.

2. The Profit and Loss Account showing how the profit or loss of the business has been generated.

3. A cash flow statement setting out the cash inflows and outflows to the business during a particular period of time.

Supporting Documents

These downloads will help to put finance theory into context using real world examples from real businesses.

Meeting customers' needs
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Learn how Travis Perkins employed finance theory to thrive in the construction industry by downloading our premium case study.

Innovation in infant nutrition
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Discover how Cow & Gate applied finance theory to succeed in the food & drink industry by downloading our premium case study.

Using the marketing mix to drive change
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Discover how Parcelforce Worldwide employed finance theory to succeed in the logistics industry by downloading our premium case study.

Using sports marketing to engage with consumers
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Discover how Kia Motors applied finance theory to prosper in the automotive industry by downloading our premium case study.

Entering a new market with a new product
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Discover how Experian applied finance theory to succeed in the financial services industry by downloading our premium case study.

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