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Letter of Advice for addressing key issues: Financial Growth Assignment Sample

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Letter of Advice for addressing key issues: Financial Growth

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To

Patrick Pty Ltd.

From: ABC Ltd.

Subject: Letter of Advice for addressing key issues.

Dear Patrick,

Please find the below-attached facets in order to understand key prevailing organisational issues addressed through this letter.

Research Demonstration Extent

Key Law Cases Identified

The evidence of identification is based on some legal advice which is to provide collaboration to the identification of the witness. The accounting system provides a conceptual structure to the business which is important for the financial growth of the country. Apart from that, some rules and regulations of companies act played a conceptual role which is important for future growth. Australian government includes some new principles which are crucial for financial growth and all the financial entities are thoroughly examined in a common way. During the same time, the government made some taxation rules which created future opportunities. As per the Income Tax Assessment Act 1997, the government implemented taxation rules which identify all the payment methods of the country (Blakeway, 2022). At the same time, taxable laws are applicable to the individual which is necessary for each origin of the country.

Associated reasons for decisions

An understanding of how taxation laws are worked in the complex situation and government made several changes in laws. After identifying all the financial origin government destines taxation rules which is important to improve the economic position of the country. Individual professional accountants are including partnership acts in business which is important for the business. The new taxation principle is included by the government and effectively improves managerial skills within the country. The business structure of the country is directly related to the taxation rules which have been made by the government of the country. The reason behind the major changes is improved the economical structure of the country which reflects current performance. In order to, deal with the complex situation of the financial position of the country is important that can effectively deal with the complex situation (Ezenagu, 2022).

In-Depth Evaluation and Analysis

Critical Illustration and Analysis

In order to conduct the critical illustration and analysis, the assessment of various financial indicators applicable for Patrick Ltd. shall be considered for study. The various financial indicators of Patrick Ltd. have been considered for an overall period of three years starting from 2019 till 2021. As per the financial metrics achieved for 2019, it can be ascertained that the company was able to generate an overall gross profit of $-30.0, while net profit for 2019 was computed as $-31.10. Hence, it can be considered that the valuation and profitability qualities of Patrick ltd. is considerably lower as it should be in normal business course. Doyle (2020), critically expressed concerns that a reduced margin of profitability or loss could hamper streamlined business flow conduct in regular business durations leading to improper market durability and sustainability.

The critical illustration and analysis of the financial metrics of Patrick Ltd. can be further studied for the financial year 2020. In this year, the company was unable to sell any of its existing land which is being traded as stock. Hence, with no sales or income generation, the company attracted an overall gross loss and a net loss of $-15.10 and $-24.10 respectively. During this year, the company also incurred high costs of development and up gradation due to which the outflow of money superseded the inflow of money leading to negative profit-seeking prospects. Hence, as per critical explanations of Gohil et al. (2021), high losses could effectively nullify degraded valuation or resale of trading stock. The overall investor orientation prospects could also be hampered significantly by the portrayal of nullified profitability prospects by the company.

In addition to the feasible discussion of critical analysis for 2019 and 2020, the explanation for 2021 provided is considered to be the polar opposite as compared to previous years. During the financial year, 2021, it can be ascertained that the company was able to generate gross profit and net profit valuation worth $ 25 million and $ 24 million respectively [Refer to Appendix 1]. However, it has also been observed that no specific additions were made to the overall land value possessed by the company. As per critical expressions and views of Zhang (2020), non-addition to an existing asset value could mainly be backtracked to previous year losses. Hence, it could be a possibility that the previous year losses in 2019 and 2020 have prevented Patrick Ltd. from making any additions to their investment values owing to the potential of reduced profit abilities and other market risks.

Various Implications discovered

The above critical explanation and assessment conducted to describe the financial analysis of Patrick Ltd. has discussed negative implications for the years 2019 and 2020 respectively. Hence, the primary implication that could be witnessed due to the financial performance of Patrick Ltd. can be attached with improper stakeholder propositions. As narrated and idealised byu Hyres (2020), establishing strong stakeholder credentials is an utmost area of importance for an organisation in order to establish a strong foothold in the relevant industry and markets. However, the stakeholder orientation propositions of Patrick Ltd. could be compromised owing to negative performances for the financial years 2019 and 2020 respectively. The second important implication that could be witnessed especially in the year 2021 could be attributed to the absence of any additions made for trading stock. The nullified additions for trading stock is a grave concern and an implication as it ascertains improper gross profit and net profit figures for the company.

Client-Centric Approach Implementation

Determination of taxable residential status

As per the Industry Research and Development Act 1986, the applicable tax by the government is 5% respectively based on the annual income from the individual sources. An individual resident of the country is considered a major category which is necessary to identify the numerical reconciliation between the annual income and the tax rate. As per the Income Tax Assessment Act 1997, each resident has to follow legal rules and regulations which is important for the economical growth of the country (Feng, 2022). The taxable income includes all types of financial origin related to the country and an important element which is created a source of income of individual residents. The tax rate is applicable for individual residents related to the country to increase financial growth.

Suitable Explanation for identifying the changes in profitability by applying the market value method.

The explanation provided for the identification of changes in profitability is further assessed by conducting the appropriate application of the market value method. Wen (2021), idealized and expressed that the implementation of the market value method only considers the net movement occurring in the value of capital or fixed assets during an accounting year. Hence, the application of the market value method has attracted a change in profitability for all three years as development and other operational costs were excluded from conducting the calculations. As per the calculations of profitability as per the market value method, the figures of profitability numerically translate to $-5, 0, and $$ 55 for financial years 2019, 2020, and 2021 respectively. Hence, it could be ascertained that the figures are considered to be contrasting as compared to the actual gross profit and net profit values sought from conducting the financial analysis [Refer to Appendix 2].

Legal Writing Quality using IRAC rule

Issues

The risk aspect in the country is involved by the less profitability which directly affects countries economical structure. The business structure of the organization is mandatory but a lower profit margin rate can directly affect the economical structure of the country. Most business organizations are working accordingly to the country's rules which are important for the individual. In order to, less profitability also hampered the organizational structure and the unable to meet customer-centric approach in the business. As a result, lower earnings can be included in the business. 

Rules

Legislation rule is important to control a country's economic structure which has directly affected the country's economy. Most business organizations are trying to identify the customer-centric approach which is to maintain some legal rules and regulations of the country. Hence, the rules applicable for determining the economic and financial structure are considered to be important especially in Australia to ascertain a detailed degree of legislative control for organizations and individuals.

Application

The application of laws is important to identify the flow of legal consequences which is to remove negative elements which are harmful to economic growth. The relevant laws and legislation identify some important principles which are important for the individual and that are able to understand how dynamic effects are included in the business.

Conclusion or Summary

As per the letter of advice proposed to Patricks ltd, it can be concluded that prowess business flow affects profit seeking opportunities which is the major reason for penalties. All the taxable dues have not been cleared during the same time which is identified by the government’s new regulation. All the future investment positions effectively identify how to improve the financial aesthetics of Patricks.

Yours Sincerely

ABC Ltd.

References

  • Blakeway, A., 2022. Taxation and Finance. In Parliament and Convention in the Personal Rule of James V of Scotland, 1528–1542 (pp. 177-225). Palgrave Macmillan, Cham.
  • Doyle, P., 2020. Taxation, politics, and protest in Ireland, 1662–2016: edited by Douglas Kanter and Patrick Walsh, Basingstoke, Palgrave Macmillan, 2019, xvii+ 367 pp.,£ 109.99 (hardback), ISBN 9783030043087.
  • Ezenagu, A., 2022. Taxation as Protection Finance for the African Child. In The Palgrave Handbook of Democracy, Governance and Justice in Africa (pp. 349-359). Palgrave Macmillan, Cham.
  • Feng, T., 2022. Research on the Systematization of Educational Finance and Taxation Issues in Education Code. Journal of East China Normal University (Educational Sciences), 40(5), p.89.
  • Gohil, S., Jain, P. and Ganguly, S., 2021, Perception of People in Crypto Trading after Taxation Policy Changes. Journal homepage: www. ijrpr. com ISSN, 2582, p.7421.
  • Hyres, A., 2020. Racial taxation: schools, segregation, and taxpayer citizenship, 1869-1973, by Camille Walsh, Chapel Hill, University of North Carolina Press, 2018, xii+ 235 pp., 90.00(hardback),ISBN978-1-469-63893-5; 29.95 (paperback), ISBN 978-1-469-63894-2.
  • Wen, J., 2021. ANXIETY OF ENTERPRISE ACCOUNTANTS BASED ON INTELLIGENT FINANCE AND TAXATION BACKGROUND AND ITS COUNTERMEASURES. Psychiatria Danubina, 33(suppl 7), pp.386-387.
  • Zhang, M., 2020. Research on the application of financial and taxation big data in enterprise taxation risk management. In E3S Web of Conferences (Vol. 218, p. 01053). EDP Sciences.

Appendices

Appendix 1: Computation of Financials for Patrick

Computation of Financials for Patrick

Particulars

Amount (2019)

Amount (2020)(M)

Amount (2021)(M)

Sale of Land (30%)

 $ 45.00

Cost Incurred in Sub Division of Sales Costs

 $ 1.00

Cost Incurred as Interest and Land Tax Expenses

 $ 0.10

Opening Stock of Land in 2019

 $ 100.00

Purchase of Land

 $ 50.00

Closing Stock of Land

 $ 75.00

Cost of Sales

 $ 75.00

Gross Profit

 $ -30.00

Net Profit

 $ -31.10

For the Year 2020

Cost of Planning Approvals

 $ 4.00

Development Costs

 $ 5.00

Interest and Taxes

 $ 0.10

Opening Stock of Land in 2020

 $ 75.00

Purchases of Land

 $ -

Closing Stock of Land

 $ 90.00

Cost of Sales

 $ -15.00

Gross Profit

 $ -15.00

Net Profit

 $ -24.10

For the Year 2021

Sales of 50% Land

 $ 55.00

Sales Costs

 $ 1.00

Opening Stock of Land in 2021

 $ 90.00

Purchases of Land

 $ -

Closing Stock of Land

 $ 60.00

Cost of Sales

 $ 30.00

Gross Profit

 $ 25.00

Net Profit

 $ 24.00

 (Source: Created by the researcher)

Appendix 2: Profitability Using the Market Value Method

Particulars

Amount (2019)

Amount (2020)(M)

Amount (2021)(M)

For the Year 2019

Sales Value of Land

 $ 45.00

Purchase Value of Land

 $ 50.00

Profitability Using the Market Value Method

 $ -5.00

For the Year 2020

Sales Value of Land

 $ -

Purchase Value of Land

 $ -

Profitability Using the Market Value Method

 $ -

For the Year 2021

Sales Value of Land

 $ 55.00

Purchase Value of Land

 $ -

Profitability Using the Market Value Method

 $ 55.00

(Source: Created by the researcher)

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