ANNUAL REPORT AND ACCOUNTS

Annual report and accounts can be used to analyse market and financial performance

Annual report and accounts can be used to analyse market and financial performance

Outline

Introduction

Discussion

Conclusion

Introduction

There is no doubt that economic accounts/reports are significant in investigating the success of a business both from the inside and out-of-doors of the company. The allowance of significance it has though is often widely argumentd. “The Financial anecdotes or anecdotes are one source of information accessible to those who wish to evaluate its performance”. This extract thus recognises that accounts/reports are one procedure to which we can use to analyse performance, but it is not the only method. Therefore the amount of importance it carries in analysing the presentation of a business in its market, and also its economic and creative performance is questionable.

 Discussion Generally we will find that in many countries companies are required to provide some sought of financial account/report for a particular year, this is particularly apparent when it comes to Plc's where there are many shareholders thus annual accounts must be publicly announced. The accounts should be relatively complete in their depiction of the financial state of a business. Although this does however convey us to our first problem, which is really a general problem. The expectancy of anecdotes does alter considerably from country to homeland; therefore what is anticipated to be encompassed in an account may vary. Therefore when comparing businesses across worldwide borders against market, financial or creative presentation we may well struggle. For demonstration we discovered it very tough to get labour charges for businesses inside the UK, while American businesses appeared to be much more forthcoming in asserting its cost of labour. But this can also happen in other localities of the accounts. E.g. number of employees, etc.

We will first gaze at the utility of economic accounts/reports in considering the performance of a business productively. Obviously using the figures obtained from particular accounts there are a large number of methods in which we could analyse productive performance. Although the figures which tell us most about the efficiency of the production line are linked to the amount of inputs opposed to the number of outputs on a particular line. “There are many measures of productive performance but the most important are productivity measures that measure the relationship between inputs and outputs”. There are a couple of ways in which we can analyse productive performance and efficiency. Firstly we can look at the amount of physical input against output, using BT as an example and the figures below:

British Telecom (Selected Data) 1985-1997

Year

Sales (£mil)

Employees

Sales per employee(£)

1985

7653

238304

32114.4

1988

10185

235647

43221.4

1991

13154

237400

55408.6

1994

13675

165700

82528.7

1997

14935

129600

115239.2

In this example it would have been more conclusive to use output as in units against employees, but these output figures are difficult to distinguish for group predominantly in the service sector, therefore I had to use sales.

Looking at the accounts we can see that there has been a massive increase in the amount of sales per employee quadrupling over the period ...