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Financial Statement

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Required:

(a) Analyse the financial position and performance of the business and comment on any features that you consider to be significant.

(b) State, with reasons, whether or not the investor should invest in the business on the terms outlined.

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Solution Summary

The expert analyses the financial position and performance of the business. Whether the investor should invest in the business on the terms outlined is determined,

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Attached is your response.

A)Significant elements:
Balance Sheet

- The amount of CASH is NOT STATED under current assets in their balance sheet. Cash is an essential account in company's balance sheet as it tells the users the available amount that the company has under the accounting period. Cash also tells the company liquidity. The less liquid company should be avoided, especially in the recession era where cash is king. A company with no cash, will not be able to pay for their liabilities, loan and other expenses. This company does not have any cash because it does not have any good management system that used up all of the money available or could be because this company is trying to hide something from the investors.

- The order of the balance sheet is not very common, most balance sheets listed current asset first then their non-current asset

- Land, building, property, plant and machinery should be recorded under Tangible assets. They should list these items and depreciation separately so it can give investors more vivid clue of their assets and depreciation cost.

- No marketable securities  this ...

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