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¶ … profit loss statement Virtual Organizations: • Riordan • McBride • Kudler Describe important elements, noting means company.
Profit and Loss Statement for McBride Plc.
McBride Plc. has enjoyed a positive increase in its financial results, as it is best revealed throughout their most recent income statement. Starting at the end of the statement, where the costs are deduced from the incomes, it is revealed that the company has generated a net income in the amount of £22,000 thousands. The figures are revealed in the table below:
= in thousands GBP=
Net income
Yahoo Finance, 2012
The latest net income of McBride Plc. reveals a £5,000,000 increase comparative to the previous year (2009). In 2008, the net income had been of £12,000 thousand, and in 2007, it had been of £21,000 thousand. The latest figures as such indicate an important downfall in 2008 comparative to 2007, when the company's net income had decreased to almost one half of its value in the previous fiscal year. The following years nevertheless, namely 2009 and 2010, have both revealed increases in the net incomes.
The movements in McBride's recent net incomes...
Nevertheless, the organization proved able to recover and began to increase its net results in 2009; this result is indicative of a strong company, able to support itself and to withstand the trials of various economic cycles. In other words, the fluctuations were due to the crisis, but the recovery is due to the internal strength of the firm.
In such a setting, the 2010 net results of McBride have managed to out total the 2007 net income by £1,000,000. During the years between, the company has fought to revive its financial strength. They have managed to attain this objective, but the period from 2007-2010, when the net income only increased from £21,000 thousand to £22,000 thousand reveals an important decrease in the growth rate of the firm's profits.
While the company's net income has revealed a major decrease, followed by gradual increases in the following years, the same trend was not followed by the total revenues of the firm, nor by the gross profit at McBride. In these two instances, the company's financial results had been following a constantly…
References:
Bragg, S.M., 2006, Financial analysis: a controller's guide, 2nd edition, John Wiley and Sons
Helfert, E.A., 2001, Financial analysis: tools and techniques: a guide for managers, McGraw Hill
McBride Plc., Yahoo Finance, http://uk.finance.yahoo.com/q/is?s=MCB.L&annual last accessed on June 6, 2012
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This is the result of the decline in inventory levels. If the inventory levels had not changed, there would have been no difference between the net profit for the two methods. If the company sold another 10,000 units, it would have a higher profit. This calculation was based on the contribution margin method. What occurs in this method is that the company sells more, but it does not produce more.
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