Using Accounting to Facilitate Judgement and Decision Making for the Future Essay

TABLE OF CONTENTS.INTRODUCTION.PROCEDURE.FINDINGS.1.0 INVESTMENT RATIOS MEASURES OF EFFICIENCY. 1.1 Earnings per Share. 1.2 PE Ratio or Price Earnings Ratio 1.3 Dividend Yield. 1.4 Dividend Cover. 2.0 PRIMARY OPERATING RATIOS MEASURES OF EFFICIENCY.2.1 Return on Capital Employed2.2 Debtors Turnover Ratio2.3 Creditors Turnover Ratio2.4 Return on Shareholders Fund3.0 PRIMARY FINANCIAL RATIOS GEARING AND LIQUITY. 3.1 Gearing Ratio 3.2 Liquidity Ratio3.2.1 Current Ratio3.2.2 Quick or Acid Ratio4.0 CASH FLOWCONCLUSIONRECOMMENDATIONSAPPENDICESBIBLIOGRAPHY REFERENCESINTRODUCTIONIt can be suggested that accounting consists of identifying, measuring and communicating business information to facilitate judgements and decision making for the further future. This specific report is pointed at investigate National Grid Group Plcs report and accounts in order to decide whether someone should invest or not in this company. Someone, who is able to analyse this company, must have its Annual Report for at least two years, which will help the person, because it contains basic components like the Profit and Loss Account, the Balance Sheet, the Cash Flow Statement and the Directors Report. PROCEDUREIn order to guide you to understand about this specific company, I have used the Annual Review by following some steps1) To summarise the size, the structure and the profit of the company I have first check the balance sheet and the profit and loss accounts.2) I have read very carefully the chairmans statement and the directors report, which helped me to understand better things about the company. 3) I have also calculated the trends and ratios.The performance data, PL AC, Balance Sheet, Ratios and Trends were obtain from the following sources- Annual Review of National Grid Group of 1997-98.- Articles from Financial Times newspaper.- Books related to the subject. FINDINGS.1.0 INVESTMENT RATIOS MEASURES OF EFFICIENCY. Investment ratios are the ratios used by the investors when deciding whether a...

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