HND商务会计高级outcome345报告答案.docx

HND商务会计高级outcome345报告答案.docx

《HND商务会计高级outcome345报告答案.docx》由会员分享，可在线阅读，更多相关《HND商务会计高级outcome345报告答案.docx（8页珍藏版）》请在冰点文库上搜索。

HND商务会计高级outcome345报告答案

Indexpage

Indexpage………………………………………..….

Introduction………………………………………….

Background………………………………………..…

Findings

Section1…………………………………………

Section2…………………………………………

Section3…………………………………………

Conclusion…………………………………………..

Reference…………………………………………….

Introduction

Background

SSPplcisacompanyoperatinginthefoodmanufacturingindustry.Itisengagedinfoodprocessing,supplyingallthemainsupermarketchainswithfirstclassprocessmeatproducts.DuringthelastfewyearsthecompanyhasbeendifficultbecauseoftheBSEandFootandMouthdiseasemadeadecliningdemandformeatproduct.Thebadoutstandingachievementstoppedin2004andapartialreboundinthemarketproducedanincreaseinturnoverbynearly15%.ItisexpectedthatthisreboundinthemarketwillgathermomentumoverthecomingyearandtheSSPplcisplanningtotakeevengreaterstridesforwardbyopeninganewprocessingplantinGlasgow.

Asrequestedinthechiefexecutive’smemoof30December,hereismyreportsummarisingandanalysisingthefinancialpositionoftheSSPplcfortheyear2003and2004.

Outline

Themainbodyofthereportwillevaluatefiveparts:

Part1---Analyzetheusersoffinancialinformationandthepurposeofusing.

Part2---Stateoffinancialsourceandcategorizewiththeircharacteristics.

Part3---ExplainthecashflowstatementofSSPplc.

AnalyzetherecentfinancialperformanceandpositionoftheSSPplc.

（Includingmyrecommendationsabouthowtoimprovementofbusinessperformance）

Findings

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:

GPP=£8,037,000/£13,382,000x100%=60.06%

Trend:

Increase

Analysis:

Theincreaseofratioisagoodsign.Thepositivetrendcanbeanindicationthatstockcontrolofmeatproducthasimproved,demandforthemeatproducthasincreasedafterthediseases,orpurchasingpolicieshaveimproved.Themanagersshouldkeepthegoodtrendandgoondevelopit,suchasimprovingmarketingstrategy,settingbetterpricingpolicy,orimprovingstockcontrol.

✧NetProfitPercentage=NetProfitbeforeTaxation/Turnoverx100%

2003:

NPP=£1,182,000/£11,674,000x100%=10.13%

2004:

NPP=£901,000/£13,382,000x100%=6.73%

Trend:

Decrease

Analysis:

Thedecreaseoftheratioisabadsignthatitindicatesalowprofitofthecompany.FromtheP&LAccountoftheSSPplc,weknowthatalthoughthegrossprofitincreased,theoperationcostismuchhigherin2004;itleadstoadecreaseinnetprofit.Sothemanagersshouldthinkabouthowtodecreaseouroperationcosttohelpourcompanyearnmoreprofit.

LiquidityRatios:

✧CurrentRatio=TotalCurrentAssets/TotalCurrentLiabilities

2003:

CR=£1,195,000/£767,000=1.56

2004:

CR=£1,248,000/£701,000=1.78

Trend:

Increase

Analysis:

theincreaseofratioisagoodsign.Generallyspeakingahealthycurrentratioisatleast2:

1.The1.56and1.78indicatethecompanyisalittlebitovertradingandhavedifficultyinmeetingitsshort-termdebts.Themainreasonfortheincreaseistheincreaseinthetotalcurrentassetsanddecreaseinthetotalcurrentliabilities.Isuggestthatthecompanymaykeep

moreprofitfortheshort-termdebts.

✧TheAcidTestRatio=LiquidAssets/CurrentLiabilities

2003:

（£1,195,000-£608,000）/£767,000=0.77

2004:

（£1,248,000-£796,000）/£701,000=0.64

Trend:

Decrease

Analysis:

Thedecreaseisabadsign.Theratioshouldbe1:

1.Buttheratioinbothof2003and2004islessthat1.Andunfortunately,theratioisstilldecreasing.SSPplcmeetsaliquidityproblemthattheliquidassetsdecrease.Thecompanymanagersshouldpayattentiontothisratioandorganization’sdevelopment.

EfficiencyRatios:

✧FixedAssetTurnover=Turnover/FixedAssets

2003:

£11,674,000/£4,017,000=2.91times

2004:

£13,382,000/£4,318,000=3.10times

Trend:

Increase

Analysis:

Wherethisratiogasincrease,thisisagoodsign.Itindicatesthattheexistingfixedassetsaregeneratingmoresalesandmaybeinvestmentinnewfixedassetsgascouldbebeenpaidoff.ManagersofSSPplcshoulddevelopandfocusonit.

✧DebtorsCollectionPeriod=Debtors/Turnoverx365

2003:

£306,000/£11,674,000x365=9.57days

2004:

£452,000/£13,382,000x365=12.33days

Trend:

Increase

Analysis:

ItisabadsignthatthereisanincreaseinDCP.ItindicatesthatSSP’smayhaveapoorcreditcontrolofpoorinvoicingsystem.Thebaddebtsmayalsoincrease.TheleadersofSSPshouldchecktheirinvoicingandremindersystemtokeeptheratioaproperrange.

InvestmentRatios:

✧InterestCover=ProfitBeforeInterest&Tax/InterestCharges

2003:

£1,416,000/£234,000=6.05

2004:

£1,135,000/£234,000=4.85

Trend:

Decrease

Analysis:

Thisratioshowshowcapablethecompanyisofcoveringitsinterestcharges.Thedecreaseisnotgoodbecausethecompanyislessabletomeetitsinterestpayments.Buttheratioisstillinareasonablerange.Leadersshouldtrytoincreasecompany’sprofittokeepthisratioahighlevel.

✧DebtRatio=TotalDebts/TotalAssetsx100%

2003:

（£767,000+£1,560,000）/（£4,017,000+£1,195,000）x100%=44.65%

2004:

（£701,000+£1,560,000）/（£4,318,000+£1,248,000）x100%=40.62%

Trend:

Decrease

Analysis:

Itisagoodsignthattheratioincreased.However,ahealthyratioshouldkeeparound50%.ItindicatesthatSSPhasfewerliabilitiesorkeepsmoreassets.Thesignshouldbekeptbymanagers.

3.Recommendation

AfterreadingandanalyzingthreeaccountsfromSSPCompany,IfoundsomeproblemswithitandnowIwillpresentmysuggestionsaboutthefuturemanagementinthesetwoparts.

Operationalrecommendation

AratioofNetProfitPercentageshowsusthatSSPplchasahighexpenditureinoperationcost.Italsoindicatesthatthecompanyhasalowlevelofcostcontrol.Therefore,IsuggestthatSSPshouldtrytodecreasethecostsofsalesandtheop