BUSINESS
Assesstment Accounting.docx

Question 4 the first step of assessing your business

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Question 4: The first step of assessing your business performance is to review your business plan, including financial statements, to understand what is happening within your business They use the SWOT analysis tool and a financial analysis to understand how you can best deal with critical issues that may affect your business.
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A “SWOT” analysis is a management tool that can help you develop business strategies by: building on strengths (S), minimising weaknesses (W), seizing opportunities (O) and counteracting threats (T). And also sometimes they use the Financial Analysis the Best practice of financial management involves planning and forecasting financials based on the strategic goals of your business, and regularly reviewing actual performance against your forecasts. To conduct a financial analysis of your business, you need to analyse your current financial statements, including profit and loss and cash flow. Question 5: The ratios are used to determine the companies financing methods, or the ability to meet the obligations. There are many ratios to calculate leverage but the important factors include debt, interest expenses, equity and assets. The most important leverage ratio is the debt to equity ratio that gives you an idea about the debt the company is in and the equity it has at its disposal. Another Meaning is that leverage ratios tend to find the debt a company has on its balance sheet or its financial health. For a shareholder the first claim he has is against the company’s assets, therefore a company might not be left with nothing in the phase of bankruptcy after satisfying the debt holders besides the assets. Question 6: In order to prepare the Budget of a bussiness or a company you need to ask the follow 5 questions: 1.- What Are the Company’s Goals? 2.- How Much Does the Company Need to Save? 3.- What Are the Company Expenses? 4.-How Can the Company Include Unexpected Expenses? 5.-How Will I stay on Track? Al lof these questions should help to make the best Budget for a company because you budget depends on the short-term and long-term goals you set, Determine how much you need to save and lower your expenses until you reach your monthly savings goal, how much you should be spending to meet your savings goal and always stick on your budget.
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Question 7: is of great use and importance in business management. It’s a tool applied to budgeting and management accounting process which helps to make comparisons between two or more means. It enables the decision makers to draw various results that in turn lead to improve efficiency and performance of a business entity. Analysis of variance is a good means for checking the accuracy, evaluating the performance and implementing remedial actions against the weak areas of a business - as and when needed.
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