Explain the concept of accrual accounting versus cash accounting, including the benefits and any limitations of each, with examples from this case study where relevant.

1.1 Case Study –T shirts LtdYou are a finance traineefor a company of Vests plc and have been asked by your marketing manager to review the business of your key competitorT-shirts plcand to assist her with helping the marketing team understand financial information.You know that T-shirts plc is struggling in the current economic climate and that other expenses have risen as a result of an aggressive advertising campaign to stimulate sales.Your sales manager has informed you that T-shirts plc increased the credit terms given to their customers from 30 days to 60 days in an attempt to attract more business.The rate of interest on the bank overdraft in 2019is significantly higher than the rate of interest on the loan.

1.2. Task Prepare a 2,500 wordbusiness report for your manager providing analysis and business advice following the requirements below.Presentation and format: Business report with a title page, contents page and clear structure. It must be written in an appropriate business tone with appropriate Harvard reference where necessary.Note no introduction is required. No marks will be awarded for an introduction.5 marks

Part 1: Business Performance Analysis: 40marks totalTo support your analysis for this part you will need to calculate and use appropriate ratios using the course definitions. You need to show all ratio calculations workings which should be placed in the appendices to your report.

1.1.Statement of Profit or LossAnalyse and comment on the financial performance of T-shirts Ltd using the case study information and exhibit

1. Your analysis should critically evaluate all the lines of the Statement of Profit or Loss.20marks

1.2.Statement of Financial PositionAnalyse and comment on the financial position of T-shirts Ltd using the case study information and exhibit

1. Your analysis should critically evaluate all the lines of the Statement of Financial Position.20marks

Part 2:Understanding Financial Information& Management of Cash: 25marks

2.1.Explain the concept of accrual accounting versus cash accounting, including the benefits and any limitations of each, with examples from this case study where relevant.15 marks

2.2.What is meant by Profit and Cashflow and how they are different.10marks
Part3: Budget techniquesand Company Finance: 30marks

3.1.Define Budget and explainpurposes of preparing a budget.15marks3.2.What might be the main benefits of forming a limited companyand listing it on a stock exchange