Given the numerous calculations involved, the word count for this assignment of 2,000 words is not specifically appropriate, but will be considered in relation to any deduction (10%) of the available marks. Provide responses to the assessment scenarios in report format.

John Davenport is a sole trader, he has been running his tile business for over 2 years. He is fairly new in the trade, and sees the company growing. John Davenport has hired you as a Financial Analyst to offer him advise, prepare his company’s financial statement, analyse and interpret the financial statements.
Scenario 1 (40 marks)

You are required to prepare the financial statements of John Davenport for the year ending 31 March 20-1.

(Statement of profit or loss, and the Statement of Financial Position)

Scenario 2: (10 marks)

Analyse and calculate John Davenport’s business performance, using performance indicators from Statement of profit or loss; and Statement of Financial Position you have conducted.

(Profitability and Liquidity ratios).

Scenario 3: (15 marks)

Comment on the differences and similarities of the accounting ratios for John Davenport and Celia Smith. Which business appears to be the most efficient? Justify your reasons.

Scenario 4: (10 marks)

Discuss the different types of depreciation methods and advise John Davenport which depreciation method he should use, and justify your answers.

(Straight line, Reducing Method, and Weighted Average)

Scenario 5: (15 marks)

Explain each of the following accounting concepts referencing where possible to financial statements:
a. Accrual concept (5 marks)
b. Prepayment concept (5 marks)
c. Goodwill concept (5 marks)

A further 10 marks are available for quality of presentation style and format, considering: Introduction; Analysis and Justification; Recommendation and Conclusion