# Essay Unit 2 M3

777 Words Jul 16th, 2016 4 Pages
Interpret the contents of a trading and profit and loss account and balance sheet for a selected company explaining how accounting ratios can be used to monitor the financial performance of the organisation.

Profitability ratio
Profitability ratios assess a business’s profitability of how well they’re doing by their interest parties.
ROCE: In order for me to calculate the return on capital employed, I divided net profit from capital employed and then multiply by 100. This is shown bellow.
R.O.C.E=(NET PROFIT )/(CAPITAL EMPLOYED)*100
R.O.C.E=159.2/300*100
=53.066%
Return of capital employed is when investors receive money back on their capitals. For business the results of ROCE in 2007 show
x=164.2/257.2 ×100=63.84%
Compare to 2008 the business made a return on net profit of 64.84 %. This is due to fewer debentures being taken out of the business; this then allows business to generate high return.
Solvency ratio
Solvency ratios measure the stability of a business and ability to repay debt.

(LONG TERM DEBT )/(CAPITAL EMPLOYED)*100

(200 )/300*100 =66.6%
In 2007 the business has a high gearing. This shows that the business is in risk because are loaning a lot of money and they rely a lot on loan. The implication of this is that they have a lot of liabilities to pay, so therefore the business would struggle to generate money in order to pay off the liabilities, which means they have to seek loans to pay off their creditors.
In 2008 the business percentage 17%, low percentage means that the business stopped depending on loans as they have improved on their capital structure. This means that business doesn’t have to take out as much loans like in 2007 when the business had high gearing.

Liquidity ratios measure a business ability to cover its expenses.

A.T.R=(CURRENT ASSEST-CLOSING STOCK )/(CURRENT LIABIITIES )*100

A.T.R=(574.3-300 )/(321.8 )*100 =0.85:1
In both years the business shows to be struggling to

## Related Documents

• ###### UNIT 2 P5 M3 D2 Essay

Eva Rands UNIT 2 P5: Describe how anti-discriminatory practice is promoted in health and social care settings. M3: Discuss the difficulties that may arise when implementing anti-discriminatory practice in health and social care settings. D2: Justify ways of overcoming difficulties that may arise when implementing anti-discriminatory practices in health and social care settings. I am going to be explaining how anti-discriminatory practices are promoted in a care home (P5 – black text). I am then…

Words: 2457 - Pages: 10
• ###### Unit 2 - P4, P5, M2, M3, D1, D2 Essay

Unit 2 – Equality, Diversity and Rights within Health and Social Care P4 For this task, I am going to explain how two national initiatives promote anti-discriminatory practice. Sex discrimination act 1975 This act applies for both men and women. It promotes that both men and women should be treated equally. For example, in transport, education, jobs etc. It promotes anti-discriminatory practice by making sure those men and women are treated equally, if this act applies didn’t exist, men and women…

Words: 3275 - Pages: 14
• ###### Unit 4:P4: to Describe Two Theories of Ageing –Disengagement and Activity P5 – Describe Physical and Psychological Changes Due to the Ageing Process M3: Use Examples to Describe the 2 Theories of Ageing D2: Evaluate the

P4: to describe two theories of ageing –disengagement and activity P5 – Describe physical and psychological changes due to the ageing process M3: Use examples to describe the 2 theories of ageing D2: Evaluate the influence of 2 major theories on health and social care provisions. The activity theory The Activity Theory was originally an idea that was proposed by Lemon Bengtson &Peterson this proposal was seen to have a much more hopeful and positive view on ageing in comparison to the…

Words: 2211 - Pages: 9
• ###### Essay Cimm

Assignment – March 2015 Assignment Front Sheet Qualification Unit number and title Pearson BTEC Level 5 HND Diploma Business Unit 41: Contemporary Issues in Marketing Management Student Name Assessor name Dr. Nittin Essoo Date issued Completion date Deadline 16.03.2015 11.07.2015 Assignment title(s) Learner declaration I certify that the work submitted for this assignment is my own and research sources are fully acknowledged. Student signature: Date:…

Words: 1056 - Pages: 5
• ###### Support Independent Living Essay

please address Task 1 and 2 below: TASK 1 - Essay 1.1 Explain how technology can be used to support users of health and social care services in living independently. 1.2 Analyse barriers to the use of technology to support users of health and social care services in living independently. 1.3 Explain the benefits of these technologies to health and social care organisations and their users. (Opportunities to meet M1, M2, M3, D2, D3) Word count 1000 words TASK 2 - Essay 2.1 Explain health…

Words: 1345 - Pages: 6
• ###### Health and social care Essay examples

Assignment Front Sheet Qualification Unit Number and Title Pearson BTEC Level 5 HND Diploma In Health and Social Care Student Name Unit 16: Understanding Specific Needs in Health and Social Care Student No. Assessor name: Christine Pratt Date of Issue Completion date 30/05/2014 11/07/2014 Submitted on Assignment title LO2 Task No. Assess how perceptions of specific needs have changed over time. 1 1.3 LO1 In this assessment you will have…

Words: 1431 - Pages: 6
• ###### Essay M3-Assignment 2: Lasa 1—Preliminary Strategy Audit

M3-Assignment 2: LASA 1—Preliminary Strategy Audit https://homeworklance.com/downloads/m3-assignment-2-lasa-1-preliminary-strategy-audit/ M3-Assignment 2: LASA 1—Preliminary Strategy Audit The end result of this course is developing a strategy audit. In this module, you will outline and draft a preliminary framework for your final product. This provides you with the opportunity to get feedback before a final submission. In Module 1, you reviewed the instructions for the capstone strategy…

Words: 1108 - Pages: 5
• ###### Essay Concrete : A Building Material

Background 1.2.1 Concrete Microstructure Concrete has become a universal building material because of its versatility and economy. It is comprised of three phases which include the aggregate, hydrated cement paste , and the interfacial transition zone (ITZ) [2]. Concrete is economical due to locally available aggregates that are used for concrete production. Physical aggregate properties that affect concrete properties include gradation, shape, texture, and density [1]. the mixing of fine and coarse aggregates…

Words: 852 - Pages: 4
• ###### Thermodynamic Essay

Unit Two Homework Solutions, September 9, 2010 1 A frictionless piston-cylinder device initially contains 200 L of saturated liquid refrigerant-134a. The piston is free to move, and its mass is such that it maintains a pressure of 900 kPa on the refrigerant. The refrigerant is now heated until its temperature rises to 70oC. Calculate the work done during this process. The freely-moving piston can be interpreted as giving a constant pressure process such that P1 = P2 = P = 900 kPa. For a constant…

Words: 2387 - Pages: 10
• ###### Essay about Hello

suite covered | Edexcel BTEC Level 3 Diploma/Extended Diploma, Health and Social Care | Assignment title | Life Stages | Unit number and title | Unit 4:Development Through the Life Stages | Assessor | Kelly Ocloo | Learning aims covered | On completion of this unit a learner should:1. Know the stages of growth and development throughout the human lifespan 2. Understand the potential effects of life factors and events on the development of the individual 3. Understand the physical…

Words: 1142 - Pages: 5