Bouquets of Hyacinth-Case Study-Free-Samples-Myassignmenthelp.com

Questions: 1.Using the worksheet provided, analyse Hyacinths Financial Statements using financial ratios. Return the worksheet with your answers, and show all calculations. 2.Comment on each of the Financial Ratios to explain what they are saying about the Business. Answers: 1.As it can be observed from the calculations and the analyses carried out in the spreadsheet, the firm enjoys a good financial position in terms of revenue generated by sales of products and services in the month of January. This is because the variance deduced in the month of January is a negative figure (-670) revealing that the sales of products and services in the month of January is more than estimated by an amount of 670. However, this scenario changes in the month of February as it can be observed from the table prepared that the variance results in a positive figure. A positive variance in case of sales implies that the actual sales has been less than what has been estimated. The month of March observes a huge positive variance of 612 implying that the firm has missed the targeted amount of sales due to the occurrence of any contingencies by a significant amount of 612. Lastly, the month of April however, observes a turnaround as the variance is only 82. In case of the cost of sales table prepared, the cost incurred in the production of the respective goods and services have been calculated and the amount has been deducted from the revenue gained in that particular month in order to reach the respective amounts of gross profit. The gross profit in the month of January reveals a positive variance of 433 indicating that the gross profit incurred is less than the budgeted figure by an amount of 433. Secondly, the month of February however turns around by incurring a gross profit that is more than the estimated figure by a precise amount of 289. The months of March and April both reveal a negative variance of (- 605) and (- 199) indicating that the firm is in a stable position and in incurring revenue more than what is expected by the management[1]. The financial statement of cash flow, prepared for the purpose of business also reveal that the payments received in the month of January has been more than the estimated amount by an exact amount of 737. However, this trend falls in the month of February, March and April as the variance amounts to a positive figure of 174, 673 and 90 respectively. This proves that the firm, in the month of January had observed a wonderful financial position both in terms of sales and in terms of revenue. However, as revealed by the computed figures of variance it is unable to maintain such a position in the following months. This is because the variance results in a positive figure indicating the expected receivables to be more than what was actually received. The cash position of the company is not at all in a healthy position except in the month of January, which reveals an amount of 36. The following months of February, March and April reveal a negative cash position. This indicates that the liqu idity position of the company is not at all good and measures should be taken to improve such a condition. 2.The variances in case of salesreceivables and gross profit indicate that the firm had incurred less than what was estimated. This could be due to a number of resources like not ensuring optimum utilization of the available resources; rise in the price of the labor cost or in the cost of production. Secondly, changing tastes and preferences of the consumers; utilization of equipment, technologically not sound enough to execute the desired job, that is, no up gradation of infrastructure; and lastly, inefficient employees[2]. The only recommendation in such a situation is that the management of the salon should implement internal controls in order to find out the particular issue that is resulting in such a highly fluctuating graph. Enough initiative on the part of the management should be taken in order to improve the required infrastructure and ensure optimum utilization of the resources. This would also help in reducing the total cost of production. The firm should also make it a point to operate and innovate its products and services in accordance to the changing demands and preferences of the consumers. Lastly, monetary rewards and incentives should be declared by the management in order to boost employee morale. References Sponem S, Lambert C. Exploring differences in budget characteristics, roles and satisfaction: A configurational approach. Management Accounting Research. 2016 Mar 31;30:47-61. Udeh IA. Audit budget potentials. Review of Business. 2015 Jul 1;36(1):35. Sponem S, Lambert C. Exploring differences in budget characteristics, roles and satisfaction: A configurational approach. Management Accounting Research. 2016 Mar 31;30:47-61. Udeh IA. Audit budget potentials. Review of Business. 2015 Jul 1;36(1):35.