2016 Fiscal Year
2017 Fiscal Year
2018 Fiscal Year
2019 Fiscal Year
The revenue and expenses increased between the 2016 and 2017 fiscal years but reduced in 2018 and 2019. The trends in the expenditures and revenue from each financial year indicate that the company was performing relatively lower than expected since there was minimal difference in eth revenue and expenses from the company during the four financial years. The variances between the expenditures and revenues also ranged in lower values showing that the operating expenses were slightly indifferent to the revenues generated.
In 2016, the budgeted and actual expenses were less than the revenue generated, indicating that the company attained profit during this fiscal year. However, in 2017, the budgeted and actual expenditure exceeded the revenues generated, showing a decline in profit trend within the fiscal year. The variance was adverse, indicating that the losses exceeded the profit made in the fiscal year. In 2018, the actual and budgeted revenue was higher than the actual revenue expenditures, which generated profit. The variance in 2018 was favorable since the profit exceeded the losses incurred during the year.
In 2019, the revenue and expense incurred almost equalized, indicating that the company spent relatively the same as they generated the revenue; hence minimum profits were attained. Therefore, the company should improve on the different activities through diversification and implementation of key investment opportunities available to reduce the variance and improve the profit outlay of the firm’s performance (Sangster, A., & Wood, F. 2018). In addition, the management should concentrate on improving the sales revenues and reducing expenditures to improve the profit.
Reference
Sangster, A., & Wood, F. (2018). Frank Wood’s Business Accounting Volume 1 (14th edition.). Harlow: Pearson Education Ltd.