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# USING THE SEQUENCE OF THE POA SBA:

## Please use as an example or guide.

You are to follow the specific requirements of the sequence of the
SBA:
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From the analysis of the final accounts it is safe to conclude
that Peter Joseph has made a decent profit and is deemed
profitable. After two months of completed trading Mr. Joseph
made a Net Profit of \$6 667.50.

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## Further interpretation of results Ratios and Comparison

CHAPTER 42 IN TEXT PAGE 381 (follow the structure of the
Use one ratio from each category i.e. profitability, liquidity &
efficiency.
Remember to state what they represent, measure and
indicate whether its a good or bad ratio. Also give reasons
Remember the business is being compared to two months,
using two out of three: sales figures, purchase figures OR
capital. (Continue with the other requirements of point 8
given in the sba sequence). You are required to use graphs
for comparison purposes eg. Comparing sales, purchases,
debtors, creditors etc. for the two month period.

## Below is an example of how # 8 should be done: (profitability &

liquidity page 381 -382 textbook)

## Profitability any ONE of the profitability ratios can be used eg.

Gross Profit & Net profit margin OR Return on capital employed
ETC.
Liquidity any ONE of the liquidity ratios can be used eg. The Acid
test ratio/quick ratio OR the Debtor: Creditor Ratio, Debtors: Sales
Ratio, Creditors: Purchases Ratio ETC.

## AN EXAMPLE OF THE STRUCTURE/FORMAT

LIQUIDITY
We decided to test the liquidity of the firm and used the Current
Ratio (refer to textbook page 381)
This ratio measures current assets: current liabilities. In general
terms, we are comparing assets that will be turned into cash
within the two months with liabilities that will have to be paid
within the same period.
Current Ratio = Current Assets / Current Liabilities
Current Ratio = 38 112.50 / 27 725 = 1.3:1
ANALYSIS: from the above ratio we can see that the firms current
ratio is acceptable since the results are positive. It also shows that
the firm is managing its debts wisely.
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## Suggestions and recommendations

At least 2 suggestions or recommendations that are
related to the business or project. Eg. Strategies used
cheaper suppliers, managing the resources available,
investing capital to get higher returns ets. Elaborate
giving the effects and impact these will have on the

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Conclusion
This area must relate to your aims mentioned previously.

## Here are some AIMS that can be used if needed:

The aims of this Principles of Accounts SBA are to: (Choose only
one group)
To complete the accounting cycle for a business and create
the accounting records for the business.
To analyse and interpret the performance of the business
and assess the financial position of the business using the
accounts that were calculated.
To make suggestions and recommendations for the business
in relation to its performance
To study the accounting records in order to evaluate the
To apply the principles I have learnt to recommend the