Contents

INTRODUCTION......................................................................................................................2

SCENARIO 1...........................................................................................................................2

TASK 1:................................................................................................................................2

TASK 2:................................................................................................................................3

SCENARIO 2:..........................................................................................................................6

TASK 1:................................................................................................................................6

TASK 2, 3: Evaluation of the company's success and a quick conclusion after a

comparison of the Uma Foodstuff Ltd. performance between the years 2021 and
2020......................................................................................................................................7

1. Total assets turnover (times):................................................................................7

2. Average inventory turnover period:.......................................................................8

3. Average settlement period for trade receivables:................................................8

4. Average settlement period for trade payables:....................................................8

5. Net profit margin:.....................................................................................................8

6. Gross profit margin:................................................................................................9

7. Return on total assets (ROA):................................................................................9

8. Return on Equity ( ROE):........................................................................................9

9. Current Ratio ( time):...............................................................................................9

10. Quick Ratio (time):.............................................................................................10

11. Debt-to-equity ratio (time):................................................................................10

12. Interest Cover Ratio:..........................................................................................10

Conclusion:...................................................................................................................10

SCENARIO 3.........................................................................................................................11

Task 1:...............................................................................................................................11

Task 2:...............................................................................................................................11

1. Benefit:...................................................................................................................11

2. Limitations:............................................................................................................12

Task 3:...............................................................................................................................12

a. GAP problems:.......................................................................................................12
 b. Solutions:...............................................................................................................13

REFERENCES.......................................................................................................................13
 INTRODUCTION
Financial statements are documents that reveal information about a company's financial
activities and consequences in a clear and complete way. (Murphy, 2022). As part of my
research, I want to create comprehensive financial documents such as an income statement,
a statement of financial situation, and a cash budget. In addition, depending on the
outcomes of my investigation, I will do a company appraisal.

SCENARIO 1
TASK 1:
TASK 2:
 SCENARIO 2:
TASK 1:
TASK 2, 3: Evaluation of the company's success and a quick conclusion after a
comparison of the Uma Foodstuff Ltd. performance between the years 2021 and 2020

1. Total assets turnover (times):

It is possible to discover in the statistics portion of Uma Foodstuff's Total Asset
Turnover Ratio that the ratio has declined from 2019 to 2020 and then leveled off in
2021. This is something that is noticeable. The notion of the Total Asset Turnover
Ratio assisting organizations in measuring the degree to which they are making
efficient use of their assets is simple to grasp. And the more efficient a firm is, the
higher the value of the total asset turnover ratio should be. Based on the information
shown above, we can conclude that the company had a variety of operational issues
throughout 2019, 2020, and 2021. The fact that the value of the company's Total
 Asset Turnover Ratio has decreased supports this theory. This suggests that the firm
is not making the best use of its resources. In order to come up with the most
feasible business and investment plans to boost the Total Asset Turnover, the
management of the company and the board of directors will need to perform an
analysis of the firm's present business strategies and investment plans.
2. Average inventory turnover period:
In recent years, the company has witnessed an upward tendency in the average
length of time it takes to turn over its inventory. In recent years, the company's
average inventory turnover time has increased by more than double, particularly
between 2020 and 2021. The fact that the score is high implies that the company is
having difficulty advertising its products and selling items, which should raise severe
red flags. This situation may occur for a variety of reasons; however, the fundamental
issue is that the company in question lacks effective marketing and promotional plans
for its items, and the individuals in charge of inventory management at the company
have not carried out the plan. The company's management must have business
strategies in place to reduce KPIs, such as selling things in bundles, giving price
discounts, incentives, or promotions for the appropriate products.
3. Average settlement period for trade receivables:
In the period between 2019 and 2021, the normal settlement term for the company's
trade receivables will stretch deeper into the future. The average settlement period
for the company's trade receivables in 2021 has risen significantly beyond the
industry average. This demonstrates that the organization is having difficulty
collecting money from its customers, partners, and the company itself. As a
consequence, the organization is experiencing difficulty with another obstacle, that of
getting funds. Because the typical payment term for commercial income has
increased, there may be times when the company is unable to meet its capital
requirements due to urgent duties.
4. Average settlement period for trade payables:
The payables period for Uma Foodstuff will now comprise a few more working days
in 2020 than it did in 2019. This increase will take effect in 2020. This indicates that
the Company is encountering some challenges in terms of financial issues and
concerns with the repayment of debt. However, by the year 2021, its value has been
cut in half. It's possible that the management of the firm has the correct policies in
place to assist the business have a higher cash flow, and the owner of the business
could be able to shorten the amount of time it takes for investors to get their money
back.
5. Net profit margin:
 This is a financial statistic that shows how much profit a firm makes for every dollar of
sales it receives. However, by the year 2021, it is clear that its worth has declined.
Uma Foodstuff will need to build adequate sales and advertising tactics in order to
effectively improve this ratio.
6. Gross profit margin:
According to McLaney (2017), "gross profit" refers to the difference between the
money generated by sales and the cost of sales. Gross profit may be computed by
subtracting sales revenue from sales costs. As a consequence, the ratio is a
measure of financial success in terms of acquiring (or producing) and selling things
or services before any other expenses are calculated. It is evident that the gross
profit margin for 2020 and 2019 is very high on average; however, it is also clear that
this index has drastically decreased and is now much lower than the average level.
The improvement of this ratio makes it possible for the company to grow.
7. Return on total assets (ROA):
This ratio is frequently considered as the single most important component in
obtaining an accurate overall estimate of a company's profitability. Based on the
falling trend shown over the previous few years, it seems that business at Uma
Foodstuff Ltd. is not performing well, as well as the negative gap that exists between
the ROA that the company intends to reach in 2020 and the industry average.
8. Return on Equity ( ROE):
This metric shows how successfully the company utilises the money supplied by its
shareholders to generate profits. This index has dropped from 52.4% to 33.77% in
the last year. (This is much lower than the industry average). This sends a bad
message to the firm as well as its shareholders. If the ROE is low, it implies that the
firm's business methods are facing several obstacles, as well as that the company is
not providing investors with a large enough return. If this issue is not addressed, it is
quite likely that investors would withdraw cash and cease participation in the
business. At this stage, the company's financial situation may be quite dangerous.
9. Current Ratio ( time):
The current ratio is also known as the ratio of short-term payments to current assets.
This is an indicator of the capacity to pay off debts that are owing in the near future.
This indicator provides company executives with the data they need to assess if they
need more financing. The number of workers at Uma Foodstuff company will almost
certainly have expanded significantly by 2021. Almost three times the industry
average. Because of this, the management of the business have every reason to be
sure that Uma will be able to fulfill all of their financial commitments as they fall due,
and the company has not yet been obliged to seek extra investment.
10. Quick Ratio (time):
According to McLaney(2017), when used to measure the solvency of short-term
loans, the Quick Ratio is also quite equivalent to the Current Ratio. However, the
Quick Ratio will examine short-term and liquid assets more completely than the
Current Ratio. Most of the time, the only assets considered are those in the form of
cash or cash equivalents. This is done so that unexpected payments may be made
with ease. According to the table that combines and analyzes statistics, Uma
Foodstuff will have a Quick Ratio that is around twice as high as the industry average
in 2021. This shows that there are a large number of assets available for quick
settlement, such as money, that may be utilized to cope with emergency situations.
11. Debt-to-equity ratio (time):
The debt-to-equity ratio is the percentage of borrowed money to the total amount of
capital held by the firm. Businesses nowadays must borrow money in addition to the
capital given by their owners. This form of funding originates from banks or other
organizations and corporations, and it is utilized to support the company in
establishing and extending its activities on a wider scale. If this proportion is
excessively high, the owner may be unable to meet the company's commitments,
which may lead to the owner declaring bankruptcy. According to the spreadsheet that
was just displayed, the index for Uma FoodStuff will decline to roughly 0.48 in 2021,
which is little lower than the average. This might imply that the corporation has large
owner resources and is still managing its debts incredibly well. Furthermore, this
might signal that the firm is still performing well. As a consequence, owners may rest
certain that they will not go bankrupt as a result of their debt, and investors can rest
assured that they can invest here.
12. Interest Cover Ratio:
Another way to look about interest cover ratio is a company's ability to make interest
payments on its obligations. This ratio may be easily understood to demonstrate the
financial capacity that the company can grow in order to pay off the organization's
existing debts. This Index's unexpected decrease in 2021, as predicted, will be
detrimental to businesses. This indicator is expected to fall around seven times as
much in 2021 as it did in 2020. The fact that the Interest Payment Ratio is
substantially lower than it should be indicates that Uma Foodstuff Ltd. has a
restricted ability to pay the loan's interest. It is probable that the firm's management
may need to consider seeking assistance and managing money in order to make it
easier to pay the loan's interest.
Conclusion:
 Finally, it can be asserted without a doubt that Uma Foodstuff Ltd possesses a
source of equity capital, despite the fact that it possesses a number of positive
attributes, such as an extremely high capacity to liquidate short-term debts and a
consistent amount of time required to pay off customer debts. mostly from the owner
rather than from loans; nonetheless, the firm remains deficient in several areas,
including the ability to handle and manage inventories, pay interest on long-term
loans, and sustain a low level of profitability for both owners and investors.
Regardless, the firm has a lot of promise. Several of Uma's indexes are expected to
be much lower than the sector average. Users that utilize financial information should
avoid investing in Uma since the firm's profitability is poor, and interest on debt will
continue to rise, negatively impacting the company. This proposal is made from the
standpoint of investors and creditors that utilize financial data.
SCENARIO 3

Task 1:

Task 2:
A budget, according to Weetman (2019), is a plan that is often used to estimate future
revenue and expenditures that will need to be utilized in the future. A budget is sometimes
known as a financial plan.

1. Benefit:
Budget planning is something that all companies or organizations must do in order to
ensure that the strategy and idea are in agreement with the goals that have been
 defined as well as the budget that has been prepared. Anywhere may be considered
to have budget transparency when everything is ensured and the management will
rely on it to make judgments about the organization's operations and plans for the
future. In the event of the Gap, the management board will be able to clearly assess
and evaluate the company's income and expenditures in the near future with the help
of budget planning, as well as discover early dangers connected to the company's
money and general budget. Ensure that all of the firm's future events go off without a
hitch and precisely as planned. Similarly, if the accounting department has a precise
budget plan to follow, they will be able to do their duties in a more responsible and
professional way. Additionally, it encourages employees to put in lengthy hours.
2. Limitations:
It is a fact that everything has both good and bad aspects. The creation of a budget
plan for management by the GAP company will result in the implementation of certain
limits. To begin, unfavorable deviations might sometimes be produced by
inexperienced budget planners, as well as by constantly changing environments and
markets. Second, developing a management budget entails a plethora of processes
and procedures that may be both time consuming and costly to fulfill. Furthermore,
keeping a budget will allow the business to sometimes run into problems with
unexpected charges. At this point, the company will take a significant amount of time
and work to process, not to mention the fact that they may be compelled to restart
the budget plan from the beginning. In conclusion, strictly sticking to budgets may
sometimes result in the goals and objectives of distinct corporate divisions clashing
directly. For example, if the sales department, rather of focusing on quickly collecting
money from customers, develops campaigns and programs to increase sales, but
these activities slow the pace at which the business cashes in on its sales, the cash
inflow rate suffers. As a result, the firm's accounting department will have a more
difficult time regulating the company's budget and risk.

Task 3:
a. GAP problems:
The firm is now grappling with financial concerns, in addition to the advantages and
downsides of corporate budgeting and budget preparation and management. In this
case, the organization's problem was that they were overdrafted for an extended
period of time. This scenario continued for an extended period of time. The firm will
continue to utilize an existing bank overdraft of $40,000 from previous months. This
will be done over the months of April and May. As a result, the amount paid on
interest during the months of April and May was greater, while the amount generated
 was lower during those two months. The reason for this is because the interest rates
that are linked with overdrafts are quite high, which causes the cost of interest to
grow. If the loan is extended for a longer period of time, the monthly interest payment
will increase.
b. Solutions:
- Receiving an additional $450,000 from consumers, which is an increase above
the total amount collected from customers the previous month, which was
$356,000
- Speak with the property's owner about the possibility of paying rent on a monthly
basis at the cost of $18,000.
- Negotiating a total advertising budget of 35,000 dollars for May and 10,000
dollars for April.
- Reduce the wages of the staff.
- Reduce the organization's dependence on its human resources...

REFERENCES
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%2C%20financing%2C%20or%20investing%20purposes.
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Ed. Harlow: Pearson.
3. McLaney, E. andAtrill, P.,n.d. Accounting and finance
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Harlow: Pearson.
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budget plans. Journal of consumer research, 12(4), pp.446-462.
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management accounting practices: an Australian study. Management accounting
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