SWOT analysis

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

SW → Internal OT → External

Financial Statements

Management accounting

  • The creation of financial information for use by the internal users within the business in order to predict, plan, review and control the financial performance of the business.

  • Management accounting data:

    • Revenue, cost and profit objectives
    • Decision trees
    • Investment data
    • Capital structure data and source of finance
    • Cash flow forecast and outcomes
    • Budget and outcomes
    • Break-even charts
    • Etc

Financial accounting

  • The provision of financial information to show external users the financial position of the business; it concentrates on historical data.

  • Financial accounting data:

    • Cash flow statements
    • Data on profitability
    • Capital structure
    • Sources of finance
    • Income statements
    • Balance sheets

Income Statements

  • Profit and loss accounts
  • Historical record of the income and expenditure over a period of time (typically the preceding year or quarter)
  • Sole trader, private limited company, public limited company
  • Gross profit, gross profit margin, net profit, net profit margin

Example income statement