Accounting Project PSO

Abstract

The balance sheet shows that the current ratios and the current liabilities have both increased as assets of PSO have increased due to expansion in operations. The owner equity has also increased mainly because of retained earnings showing continue trend of high profits over the year. The overall depiction that analyst can perceive from the balance sheet is that PSO is a very profitable company and has a very bright future and no going concern. Over the years long term investments have dropped and there is a decrease in loans and advances .the current assets have decreased till 2003 and rose in 2004-05 short term liability have increased and the long term liability have also decreased. The share and capital reserves kept on declining but retained earnings increase from 2002-04 In the statement of changes of changes in equity shows that both the companies are very profitable companies and both are continuously expanding there businesses and they are passing larger portion of profits to there investors and stock holders. The companies have a very strong financial position that is depicted by expanding retained earnings of both Shell and PSO. Income statement of both shell and PSO show that net income over the year has increase due to increase in sales and decrease in expenditure operating. Along with this, the expansion that was done in the previous year is giving out profit and most of profits are coming from operating activities The overall cash inflow of the operating activities of PSO has increased by 89% which is due to the increase in sales volume and also because of the better administration which has cut down the cost to minimum. The cash inflow of Shell from the operations has decreased by 21% which is due to the declining trend of cash generation. In PSO the fixed capital expenditure has decreased by 28.10% due to the disposing off its various equipments. The overall cash outflow from investing operations has increased by 28.6% because of the sales of their fixed assets. In case of shell the investing activities have decreased by 27% due to the lesser investments in the current year. In case of PSO the cash outflow from the financing have decreased by 399% and in case of Shell it is decreased by 112%.