A public limited company (PLC) is a company created in the United Kingdom or Ireland, as delineated by the Companies Act of 2006. A PLC is a corporation that is lawfully disconnected from all its directors. It is capable of proffering shares to the public via floating each share on the public stock exchange. The two Plc companies being analysed are Barclays bank plc and standard charted bank plc. Both companies are involved in the banking service industry.
A) Explain the structure of a published account referring to one of these published accounts
An annual report of a PLC company comprises:
Trading account
It compares the value of sales to the customer and the cost of sales. It may contain items like sales, purchases, returns (inwards, outward), and stock. It items any details involving sales and expenses.
Profit and loss account
Used for both external and internal reporting. It calculates the net profit and loss that a company has incurred over a financial period. Lists any item of extra revenue not directly linked to the trading since it is a continuation of trading account.
Balance sheet
The consolidated balance sheet is one among four fundamental financial statements. The consolidated balance sheet (appendix 1) is broken down into three primary segments: Assets, liabilities, and shareholders’ equity. It also demonstrates the net value of the bank, through getting the difference between the bank's total assets and liabilities.
B) Analyze and compare the two published reports
Both the financial statements from the banks have similar format. The balance sheets have been partitioned into three primary segments: assets, liabilities and equities. They are both made at the year ending 31 December 2009. From the both Barclays and Standard bank balance sheet, it is evident that there is a significant decrease in assets from the previous year, 2008, down from 2,053,029 to 1,379,148 and 329,205 to 266,102 respectively. However, there is also a significant reduction in liabilities from 2,009,455 to 1,320,449 and 307,753 to 248,707. There are also slight decreases in the net value of the banks from the net value in 2008. However, the total shareholders’ equity for both banks increased from 43,574 to 58,699 in Barclays bank and 17,395 to 21,452 in Standard Charted Bank.
