Finance for non financial managers

Hi Nick

I have the answers to your questions below (with your questions repeated for clarity). I have also emailed them to you directly. Do let me know if you have any further questions. Kind regards, Andrew

Re training booklet p11 why is £30k shown as 15 +15K why is 60K rent not shown in this years account; what is the difference between accruals and creditors? The financials are for three months to 31/3/07 so one quarter's rent is £15k and the other piece is 'prepayment'. The rent is only shown to the extent that it has actually been paid.

p14 why is share capital shown in this year's a/c when it may have already been spent in previous years? Share capital stays permanently in the company (unless it is wound up). It is used to fund the company's net assets which can take the form of fixed assets, cash, stock or debtors.

p26 are number of months shown historical or future due dates - why no time on tax? Page 26 of the course manual refers to the Quick Byte Computers Cashflow Statement which refers to the previous twelve months. I do not understand the reference to 'no time on tax'. The profit figure shown is the figure after tax has been deducted and paid.

p28 why is depreciation added back? Depreciation is added back because it is purely an accounting entry and never crystallises as a cash movement.