Ian Welsh
Entrepreneur and Property Developer in Greater Manchester UK
Location Greater Manchester
Activity
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Ian Welsh made a comment
Really helpful and interesting, but I need to practise. Thank you.
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Ian Welsh made a comment
A couple of errors but happy I understood mostly what was happening with the company.
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Ian Welsh made a comment
P2
1. Has the performance of the business improved since last year?
Yes as the profit for the period has grown from £13,496 to £30,547 leading to an increase in dividend.
2. Has the business grown since last year?
Yes as the operating profit has grown from £16,860 to £38,323.
3. Is the company in a better or worse liquidity position this year?
Yes as... -
Ian Welsh made a comment
Part 1
a. The gross profit
2016 = £80,831 / 2017 = £114,423
b. The operating profit
2016 = £16,860 / 2017 = £38,323
c. The profit for the period
2016 = £13,496 / 2017 = £30,547d. The total of non-current assets
2016 = £38,703 / 2017 = £42,962
e. The total of current assets
2016 = £31,160 / 2017 = £43,903
f. The total equity
2016 = £53,163 / 2017... -
Ian Welsh made a comment
The income statement gives an overview of the probability of a company, a cash flow statement gives a more in depth breakdown of cash flowing into the business and operating costs involved in producing that cash.
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Ian Welsh made a comment
Not sure on these questions as it should balance but...
The statement of financial position may not balance if for example an asset depreciates faster than a company pays of the liability, maybe a machine brakes but you still have the loan to pay off.
The statement of financial position may balance but be incorrect because of incorrect assumptions by the...
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Ian Welsh made a comment
JD Sports 2019 Report
Total Assets: £2205.5m
Total Liabilities: £1128.7m
Total Equity: £1076.8m -
Ian Welsh made a comment
I have found it interesting to learn how companies can manipulate accounts and what to look out for in the reports, balance sheets etc. Also how to compare companies results.
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Ian Welsh made a comment
I believe this was part of the problem with Enron, they signed deals in one year and posted estimated future profits based on that deal in that year, in many cases the profits did not materialise as expected.
Would this be applicable if a software company signs a deal to supply software and training over a couple of years? -
Ian Welsh made a comment
I take from the article that there are many ways in which companies and executives can manipulate the revenue figures but if you take a view across several accounting periods, looking at revenue and reserves red flags might appear.
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Ian Welsh made a comment
The impact is that decisions will be made on the detail in the statements, decisions that could effect shareholders, employees and the future of the company.
It is important for financial statements to be accurate to give a clear view of the companies position and performance, better informed decisions can then be made on the future of that company. -
Ian Welsh made a comment
In the case of Enron I would suggest Faithful Representation was not met as the board took debts off the balance sheet, Verifiability was in question because the audit company failed also and finally Understandability was an issue due to the fraud being kept going for a length of time.
The impact if the financial statements do not meet the qualitative... -
Ian Welsh made a comment
I looked at INEOS, They titled it 'Results' but I believe it to be a Balance Sheet, it compared end of year results across three years with basic components of;
Revenue
Gross Profit
Operating Profit
Profit before Finance Cost
Profit before Tax
Profit after Tax. -
I've encountered accounting with the businesses I've had but often I've worked with accountants not done the accounts myself. It is a weak area for me and I'm looking to enhance my knowledge.
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Ian Welsh made a comment
You require all three of the above to plan, operate and asses your business to help it become successful.
I have been told in the past, starting or running a business without budgets or accounts would be like driving to a destination far away without;
Having a map or directions (management accounting)
Knowing how much fuel you need (financial... -
Ian Welsh made a comment
Additional: Perspective business buyer, they would use company accounts to quickly asses a companies current position, future viability and possible cost cutting opportunists, thus helping in it decision to acquire or not.
Competitors might use a revivals accounts to asses and compare many aspects of their business to a rival, compare sales, marketing,... -
Ian Welsh made a comment
Accounting for me has several purposes, from a business owners perspective it helps track business performance as it moves towards designated goals, it helps third parties to quickly asses a business and it helps Governments collect taxes!
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Ian Welsh made a comment
Hi, I'm looking to gain knowledge of how to asses a companies position from their financial statements, to then use as part of our business M&A program over the following three years.
