HND商务会计高级outcome345报告答案Word格式文档下载.docx
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HND商务会计高级outcome345报告答案Word格式文档下载.docx
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SSPplcisacompanyoperatinginthefoodmanufacturingindustry.Itisengagedinfoodprocessing,supplyingallthemainsupermarketchainswithfirstclassprocessmeatproducts.DuringthelastfewyearsthecompanyhasbeendifficultbecauseoftheBSEandFootandMouthdiseasemadeadecliningdemandformeatproduct.Thebadoutstandingachievementstoppedin2004andapartialreboundinthemarketproducedanincreaseinturnoverbynearly15%.ItisexpectedthatthisreboundinthemarketwillgathermomentumoverthecomingyearandtheSSPplcisplanningtotakeevengreaterstridesforwardbyopeninganewprocessingplantinGlasgow.
Asrequestedinthechiefexecutive’smemoof30December,hereismyreportsummarisingandanalysisingthefinancialpositionoftheSSPplcfortheyear2003and2004.
Outline
Themainbodyofthereportwillevaluatefiveparts:
Part1---Analyzetheusersoffinancialinformationandthepurposeofusing.
Part2---Stateoffinancialsourceandcategorizewiththeircharacteristics.
Part3---ExplainthecashflowstatementofSSPplc.
AnalyzetherecentfinancialperformanceandpositionoftheSSPplc.
(Includingmyrecommendationsabouthowtoimprovementofbusinessperformance)
Section1.Usersoffinancialaccounts.
Usersoffinancialstatementsareagroupofpeopleororganizationswhousetheinformationtomakeevaluationsanddecisions.Usersoffinancialinformationcanbedividedintotwocategories:
internalandexternalusers.
Now,Iwilluseatabletoshowyoutheusers’purposeandsourcesofinformationtheyusetogetthestatements.
Section2.Sourceoffinances
Torunabusiness,organizationsrequirefinancefordifferentproposesandforvaryinglengthsoftime.Inthefinance,wedividesourcesofcapitalintotwocategories:
equitycapitalandloancapital.Equitycapitalisthefinanceprovidedbytheownerandthereisnointeresttopay.Loancapitalreferstomoneythatisborrowedfromasourceoutsidethebusiness.Theinterestofloancapitalmustbepaid.Sourcesoffinancescouldbeclarifiedintoshort,mediumandlongterm.Theshort-termreferstofinancethatareborrowedforaperiodofnomorethanoneyear.Themedium-termreferstofundsthatareborrowedforaperiodofbetweentwoandtenyears.Long-termreferstofundsthatareborrowedforaperiodofmorethantenyears.
Inthecasestudy,thesourceoffinancesofSSPplcis:
tradecreditors,tax,bankoverdraft,debentures,ordinarysharecapitalandtheretainedprofitsfromlastaccountperiod.
Short-termsources:
1.Tradecreditors:
Tradecreditorsareproducedwhenthepurchaseofrawmaterialsorstockisdelayingtopay,thus,thereismorecashwhichwouldbeusedforotheruses.Thereisalsoaninterestfreewayofraisingfinance.However,thecreditcouldleadtopoorrelationswithsuppliersandthecustomersmayforfeitdiscounts.
Thecreditis£
544,000in2003anditdecreasedto£
405,000in2004.Thepercentageofdecreaseis25.56%.ThedecreaseofcreditinfersthatSSPplchasagoodfinancialsituationthatithasastrongabilitytopaycreditsbacktosuppliers.Thiscouldimprovetherelationshipwithsuppliers.
2.Bankoverdraft:
Bankaccountholderscanprearrangewiththebanktodrawchequestoagreatervaluethantheactualbalanceintheaccount.Interestshouldbepaidbycustomersandbankchargeswillapplywhereanoverdraftlimithasbeenexceeded.Bankoverdraftisflexibleandcheap.Ithasalowcost.Somesmallbankoverdraftevenhasafreeofcharge.
SSPplchadnooverdraftbutthenumberincreasedto£
86,000in2004.TheincreaseshowsthatthecompanyborrowedmoneyfrombankforitsexpansioninGlasgow.
Long-termsources:
1.Debentures:
Debenturesareloansmaketocompaniesthatcarryafixedrateofinterest.Thecompany’sfixedassetsnormallysecuredebentures.Debentureshaveafixedtimeperiodoranopentimeperiod.Theshareholdersarenotdebentureholders.Adebentureinterestispaidasanexpensenotanappropriationofprofit.
SSPplchasafixeddebenture(£
1,560,000)intheyearof2003and2004.Ittellsusthecompany’sfixedassetsaresteady.
2.Ordinaryshares:
Ordinaryshareholdersreceivingpay-outsfromcompanyafterpreferenceshareholdersarepaid.Ordinarysharedividendsarenotfixedandsubjecttocompany’speriodicalperformancesanddecisionsofmanagementinpayingdividend.
InSSPCompany,theordinarysharecapitalis£
1,950,000inboth2003and2004.Itinfersthatthecompanyhasasteadyoperationsituation.
3.RetainedProfits
Theretainedprofitisthefinancebroughtfromthelastfinancialperiod.Itisnotfixedandmaybeanegativenumber.Itpresentsoperationalsituationoflastperiod.
Theretainedprofitsdecreasedfrom£
505,000to£
420,000.Thepercentagechangeofdecreaseis16.83%.Thelowerratioshowsusthecompanyhadmadefewerprofitsin2003thenitwasin2002.
Section3.RatioAnalysis
1.MajorinflowsisNetcashflowoperatingactivatesof£
1,345,000.
MajoroutflowisPaymentstoacquirefixedassets,whichtakes£
984,000.
2.RatioAnalysis
ProfitabilityRatios:
✧GrossProfitPercentage=Grossprofit/Turnoverx100%
2003:
GPP=£
7,000,000/£
11,674,000x100%=59.96%
2004:
8,037,000/£
13,382,000x100%=60.06%
Trend:
Increase
Analysis:
Theincreaseofratioisagoodsign.Thepositivetrendcanbeanindicationthatstockcontrolofmeatproducthasimproved,demandforthemeatproducthasincreasedafterthediseases,orpurchasingpolicieshaveimproved.Themanagersshouldkeepthegoodtrendandgoondevelopit,suchasimprovingmarketingstrategy,settingbetterpricingpolicy,orimprovingstockcontrol.
✧NetProfitPercentage=NetProfitbeforeTaxation/Turnoverx100%
NPP=£
1,182,000/£
11,674,000x100%=10.13%
901,000/£
13,382,000x100%=6.73%
Decrease
Thedecreaseoftheratioisabadsignthatitindicatesalowprofitofthecompany.FromtheP&
LAccountoftheSSPplc,weknowthatalthoughthegrossprofitincreased,theoperationcostismuchhigherin2004;
itleadstoadecreaseinnetprofit.Sothemanagersshouldthinkabouthowtodecreaseouroperationcosttohelpourcompanyearnmoreprofit.
LiquidityRatios:
✧CurrentRatio=TotalCurrentAssets/TotalCurrentLiabilities
CR=£
1,195,000/£
767,000=1.56
1,248,000/£
701,000=1.78
theincreaseofratioisagoodsign.Generallyspeakingahealthycurrentratioisatleast2:
1.The1.56and1.78indicatethecompanyisalittlebitovertradingandhavedifficultyinmeetingitsshort-termdebts.Themainreasonfortheincreaseistheincreaseinthetotalcurrentassetsanddecreaseinthetotalcurrentliabilities.Isuggestthatthecompanymaykeep
moreprofitfortheshort-termdebts.
✧TheAcidTestRatio=LiquidAssets/CurrentLiabilities
(£
1,195,000-£
608,000)/£
767,000=0.77
1,248,000-£
796,000)/£
701,000=0.64
Thedecreaseisabadsign.Theratioshouldbe1:
1.Buttheratioinbothof2003and2004islessthat1.Andunfortunately,theratioisstilldecreasing.SSPplcmeetsaliquidityproblemthattheliquidassetsdecrease.Thecompanymanagersshouldpayattentiontothisratioandorganization’sdevelopment.
EfficiencyRatios:
✧FixedAssetTurnover=Turnover/FixedAssets
£
11,674,000/£
4,017,000=2.91times
13,382,000/£
4,318,000=3.10times
Wherethisratiogasincrease,thisisagoodsign.Itindicatesthattheexistingfixedassetsaregeneratingmoresalesandmaybeinvestmentinnewfixedassetsgascouldbebeenpaidoff.ManagersofSSPplcshoulddevelopandfocusonit.
✧DebtorsCollectionPeriod=Debtors/Turnoverx365
306,000/£
11,674,000x365=9.57days
452,000/£
13,382,000x365=12.33days
ItisabadsignthatthereisanincreaseinDCP.ItindicatesthatSSP’smayhaveapoorcreditcontrolofpoorinvoicingsystem.Thebaddebtsmayalsoincrease.TheleadersofSSPshouldchecktheirinvoicingandremindersystemtokeeptheratioaproperrange.
InvestmentRatios:
✧InterestCover=ProfitBeforeInterest&
Tax/InterestCharges
1,416,000/£
234,000=6.05
1,135,000/£
234,000=4.85
Thisratioshowshowcapablethecompanyisofcoveringitsinterestcharges.Thedecreaseisnotgoodbecausethecompanyislessabletomeetitsinterestpayments.Buttheratioisstillinareasonablerange.Leadersshouldtrytoincreasecompany’sprofittokeepthisratioahighlevel.
✧DebtRatio=TotalDebts/TotalAssetsx100%
767,000+£
1,560,000)/(£
4,017,000+£
1,195,000)x100%=44.65%
701,000+£
4,318,000+£
1,248,000)x100%=40.62%
Itisagoodsignthattheratioincreased.However,ahealthyratioshouldkeeparound50%.ItindicatesthatSSPhasfewerliabilitiesorkeepsmoreassets.Thesignshouldbekeptbymanagers.
3.Recommendation
AfterreadingandanalyzingthreeaccountsfromSSPCompany,IfoundsomeproblemswithitandnowIwillpresentmysuggestionsaboutthefuturemanagementinthesetwoparts.
Operationalrecommendation
AratioofNetProfitPercentageshowsusthatSSPplchasahighexpenditureinoperationcost.Italsoindicatesthatthecompanyhasalowlevelofcostcontrol.Therefore,IsuggestthatSSPshouldtrytodecreasethecostsofsalesandtheop
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