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2.2 What benefits might a company gain from having its shares listed on a stock exchange?

Business Finance Analytical report

TASK 1

 For each transaction, decide whether it should be included in the cash budget for the business; prepare a cash budget for the three months ending 31 March, 2022. (30 Marks)

1. Anton invested £10,000 cash in the business on 1 January, 2022.
2. Anton plans to make drawings of £800 per month for each personal expenditure.
3. Anton purchases a computer for his personal use at a cost of £499 in January.
4. Anton also purchased a computer in January for business purposes at a cost of £720 cash.
5. He plans to buy a motor vehicle for £3,200 cash on 1 March, for business purposes.
6. Sales estimates are as following: January = £4,200 February = £ 3,200 March = £2,950
7. Sales are made 30% cash and 70% on one months’ credit.
8. Purchases will be made for cash as follows: January = £ 2,800 February = £1,500 March = £1750
9. Other expenses are estimated as follows:

• Electricity £285 payable at the end of the quarter.
• Telephone costs of £120 per month, payable at the end of each month by cash.
• Fuel cost for motor vehicle estimated to be £65 per month, payable in the same month.

 TASK 2

2.1 What is Accounting Equation and explain why the accounting equation will always work? Also, provide an example with your explanation.

2.2 What benefits might a company gain from having its shares listed on a stock exchange?

2.3 Who do you think might be stakeholders in a large listed company like Marks and Spenser?

2.4 Is the profit that a business makes a reliable indicator of its cash balances? What are the differences between Profit and Cash?