The following financial statements have been prepared for Clearview for the month of June. The financial statements have been prepared using accrual accounting, except to the extent evident in the information provided. The business is a sole proprietorship. Trading commenced on 1 June. The business offers a window cleaning service on both cash and credit terms. Forty per cent of the work completed in June was on credit. Customers are given 30 days to pay. The proprietor invested cash of $2500 and a vehicle valued at $27 000 at 1 June.
Clearview
Statement of comprehensive income
For the month of June
Clearview
Balance sheet
As at 30 June
Discuss the performance of the business for the period as revealed by the foregoing financial statements, paying particular attention to the entity's profitability and cash position.
Definitions:
Pure Play
A company that focuses exclusively on a single product or service area.
Risk Characteristics
The inherent features of an investment that determine its potential return and the likelihood of loss.
Risk-Free Rate
The theoretical rate of return on an investment with zero risk, typically associated with government bonds.
Market Risk Premium
The extra return that investors require to hold a risky market portfolio instead of risk-free assets.
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