Financial Accounting 2 LO4: Measuring performance and financial position | IFA Direct

Learning Outcome 4 of Financial Accounting 2 (T/650/9637), Level 4 Unit 2 of the ATHE Level 4 Extended Diploma in Accounting, taught by UK Versity for learners on the IFA Direct programme. LO4: Can use techniques to measure performance and assess the financial position of organisations. This outcome shows you how to measure how well a small business is doing. You will calculate profitability, liquidity, working capital, efficiency and gearing ratios, build KPIs, use benchmarking and the balanced scorecard, and explain results to different stakeholders. Assessment criteria covered: 4.1: Calculate performance indicators to assess and monitor the financial position, performance and efficiency of a specific organisation 4.2: Develop key performance indicators relevant to a specific business organisation 4.3: Interpret and report on the results of performance indicators 4M1: Analyse the rationale for using quantitative and qualitative measures to assess organisational performance and position 4D1: Compare and contrast the financial performance of an SME using financial indicators Chapters 0:00 LO4 overview, aim and assessment criteria 0:35 Session roadmap 1:06 The ratio families and what each one asks 1:58 Case company: Millbrook Garden Supplies Ltd, income statement 2:46 Millbrook Garden Supplies Ltd, statement of financial position 3:31 Profitability ratios: margins and return on capital 4:25 Liquidity ratios: can Millbrook pay its short-term debts? 5:16 Working capital ratios and the cash operating cycle 6:11 Efficiency and resource utilisation ratios 7:00 Gearing and interest cover 7:47 Interpreting the results: Millbrook compared year on year 8:38 Growth that drains cash 9:31 Why ratio analysis helps, and where it misleads 10:40 Key terms for performance indicators 10:56 Developing KPIs for a specific business 11:48 A KPI set for Millbrook Garden Supplies Ltd 12:38 Benchmarking: Millbrook against an industry average 13:24 The balanced scorecard 14:09 Quantitative against qualitative measures 15:10 Case study: reading numbers and judgement together 15:55 Quality control, quality assurance and TQM 17:05 The cost of weak quality 17:55 How different stakeholders use financial analysis 19:02 What Pass, Merit and Distinction look like 19:54 Activity: interpret and report 20:23 Check your understanding 20:54 Key takeaways 21:48 Plenary: further reading and resources 22:25 Plenary Watch the full IFA Direct playlist on the UK Versity channel:    / @ukversity   Study accounting online with UK Versity: https://www.ukversity.co.uk Course enquiries: admin@ukversity.co.uk #IFADirect #ATHE #Accounting #UKVersity #FinancialAccounting2 #AccountingStudents UK Versity disclaimer: This video is UK Versity teaching material for learners on the ATHE Level 4 Extended Diploma in Accounting, studied with UK Versity on the IFA Direct programme. UK Versity is an ATHE approved centre; the video is produced by UK Versity and is not issued or endorsed by ATHE or the Institute of Financial Accountants. It is for study only and is not legal, tax, financial or professional advice. Organisation names are used for educational comment only. Figures and rules are correct at the time of recording; always check current guidance and your assignment brief. © UK Versity Online Limited. All rights reserved. COPYRIGHT NOTICE: All content in this video is the exclusive intellectual property of UK Versity Online. This video, in whole or in part, may not be copied, reproduced, distributed, uploaded to any third-party platform, embedded, or integrated into any website, application, or learning management system without the prior written permission of UK Versity Online and the payment of applicable royalties. Unauthorised use, reproduction, or distribution of this content constitutes an infringement of UK Versity's intellectual property rights and will be subject to legal action under applicable UK and international copyright law. For licensing or permissions enquiries, contact: info@ukversity.co.uk