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.

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

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

Sponsorship as part of the marketing mix
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Learn how Ford employed finance theory to thrive in the automotive industry by downloading our premium case study.

Re-focussing a company's culture and marketing mix
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Learn how Argos used finance theory to prosper in the retail industry by downloading our premium case study.

The use of the marketing mix in product launch
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Learn how NIVEA employed finance theory to prosper in the manufacturing industry by downloading our premium case study.

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