Essay
BTEC Business Studies Level 3 Unit 2 Business Resources-P5
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Essay of 2 pages for the course Unit 2 Business Resources at BMet
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Waqar chaudaryUnit 2, Business Resources
P5
P5- Interpret the contents of a trading and profit and loss account and balance sheet for a selected
company.
In this assignment I will interpret the contents of a trading, profit and loss account and a balance of
domestic Dog Homes. I will be defining the key factors in the balance sheet and profit and loss
account, as well as putting forward my own opinion on how I feel the company’s solvency is rated.
Scenario
“Domestic Dog Homes specialises in supplying pet bedding for dogs in a range of sizes from
miniature to giant dog sizes. The also cater for all ages, ie puppies and mature dogs. They stock
innovative items such as dog tents for owners who like camping and incontinence beds for mature
dogs which do not leak and can be washed every day for a year”.
Profit and loss sheet
Sales- Sales on a profit and loss sheet is the monetary value that comes into the organisation which
in this case is £250,000
Net profit- Net profit is the figure minus all the expensive that the business may have used for
example electricity and gas bills. £102.250
Gross profit- Gross profit is the figure when all the cost of sales has been taken away from the sales
total. £102,250
Overheads- Over heads consists of many things that an organisation needs to pay out for as part of
their expensive; in this case they will include salaries, electricity and gas, rents and rates and sundry
expensive. £59,400
Sundry Expenses- this includes factors such as phone bills, building insurance, maintenance of
machinery and Postage. £8,400
From looking at profit and loss sheet there are many things that are striking. One thing is that the
wage bill for the year is very high and stands at £46,000, which could mean that the employees at
the company are on a very healthy salary. Another factor that is evident form the profit and loss
sheet is that the sundry expensive which stand at £8,400 are higher that the rent and electricity and
gas bills out together which collectively stand at £5,000, this could mean that the company spends a
lot of money on sundry expenses.
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