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Accounting Evaluation And Forecast - Essay Example
Pages 9 (2259 words)
According to Carter & Usry, activities of an organization can be divided to three large groups, which are Planning, Organizing and Controlling. Theoretical literature often divides these activities into different subjects…
Carter and Usry mentioned that “In Reality, planning and controlling are simultaneous, cannot be separated, and an interconnected process”. Within this elaboration we will evaluate performance of the “Aberdare - Super Service Mini Market” and furthermore describe Income Statement and Balance sheet forecast for planning purposes. According to the financial ratios, Aberdare posses an overall weaker performance, compare to the Pernarth mini market. The only ratios that exceed Pernart mini market are sales/operating assets ratio and the interest cover ratio. The sales/operating assets ratios present a slight lead on Aberdare’s effectiveness on using its operating assets to produce sale, while the interest cover ratio display Aberdare’s better performance on taking advantage of debts to finance operations. However, financial ratios should not be used as a sole instrument of measuring performance. According to available data, Aberdare’s sales in 2004 are amounted to $ 1,250,000 and the operating profit is $ 217,000. This has a relatively significant difference compare to Pernarth mini market, which produce a sales number of only $ 1,000,000 and operating profit of $ 190,000. Thus, in actual numbers, Aberdare mini market contributes more income to the business. ...
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