Name: Fernandez Augusthus
Form: six
Subject: Accounting
Title: Financial Statements and Analysis

Linval’s Hardware

Acknowledgements

I would first like to acknowledge God, for giving me divine wisdom and understanding and strength to complete this research. I would like to thank the owner of Linval’s Hardware for his time and co operation, and resources which aided me greatly in this project. I would also like to thank my mother who has been by my side throughout this research.

Introduction

This project is designed to thoroughly assess the financial position of a business. This project involves the relevant information that will give students the general understanding how to analyze the performance of a business. This project will specifically look on module 3of the syllabus which deals with financial reporting and interpretation. This includes these major concepts:
*ratio analysis
*limitations of ratio analysis

Table of Contents

Literature Review
Report on Linval’s Hardware * Income Statement and Analysis * Balance Sheet and Analysis
Limitations of Ratio Analysis
Conclusion and Recommendation
Appendices
References

Linval’s Hardware Income Statement Analysis

Linval’s Hardware
Income Statement
For the year ended December 31, 2012

| $ | $ | Total Revenue | | 12,650,000 | Sales returns | | <54,000> | Net turnover | | 12,596,000 | Cost of Sales: | | | Purchases | 4,678,000 | | Purchases discount | <46,000> | | Purchases returns | <17,500> | | Net purchases | 4,614,500 | | Opening inventory | 378,200 | | Cost of inventory | 4,992,700 | | Closing stock | <356,100> | | Cost of goods sold | | <4,636,600> | Gross profit | | 7,959,400 | Operating expenses: | | | Advertising | 45,000 | | Insurance | 650,000 |