HND 会计考试outcome文档格式.docx

HND 会计考试outcome文档格式.docx

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Short-termCreditors

Short-termCreditorswasIndividualsororganizationsthatlendthecompanymoneyorgoods@short-termcredit.Inthecase,theshort-termcreditorwaspayfortradecreditorsbasedonthefinancialstatement.

Theywillbeanalyzingtheliquidityandlong-termfutureofthebusinesstodecidetheleveloffinancetobegiven.Short-terminvestorsusethefinancialinformationtoevaluatethelevelofriskandtheprospectsofmoneybeingrepaid.

Short-termcreditorswillrefertothecashflowstatement,thiswillshowifthecompanyhassufficientfundstopayforstockboughtoncredit

Long-termCreditors

Long-termCreditorswasIndividualsororganizationsthatlendthecompanymoneyonalong-termbasis.AccordingtotheSSPplc'

sfinancialstatement,TheLong-tbasedonthefinancialstatement.TheLong-termCreditorwaspayforDebenturesbasedonthefinancialstatement.

Similarly,long-termcreditorswillusethefinancialinformationtoanalyzetheliquidityandlong-termfutureofthecompanytoevaluatethelevelofrisk.Long-termcreditorswillusethefinancialinformationinordertodetermineifinterestpaymentarelikelytobemadepromptlyandifthecompanycanmakethecapitalrepayments.Inaddition,thisgroupofuserwillbeinterestedinthevalueoftheassetsintermsofcollateralwhendecidingonofferingfinance.

Long-termcreditorswillrefertothecashflowstatementandliquidityratios.Inadditioninformationrelatingtothecollateralcanbesourcedfromthebalancesheet.

3.Sourceoffinance

AtableofsourceoffinanceintermsoffinancialstatementofSSPplcasfollows:

Sourceoffinance

Typeoffinance

Termoffinance

Creditors

Loancapital

Short-term

Billoffinance（Debtors）

Bankoverdraft

Debentures

Long-term

OrdinaryShareCapital

Equitycapital

Retainedprofits

ShortTermFinanceisthatborrowslessthanoneyearandappliestofinanceseasonalintrading,generalworkingcapitalrequirementsorpurchasingminorfixedassetwithashortworkinglife.

MediumTermFinanceisthatborrowsbetween2-10yearsandappliestofinancetheacquisitionofmaterials,orfixedassetswithamediumtermlifespan,toovercomeapersistentcashflowproblemorfinancesmall-scaleexpansion.

LongTermFinanceisthatborrowsover10yearsandappliestofinancetheacquisitionoffixedassetswithalong-termlifespanorfinancelarge-scaleexpansion.

AccordingtheSSP’sPlc,therearetwotypesoffinance:

EquitycapitalandLoancapital.

Equitycapitalreferstocapitalsourcedbytheownerofthebusinesswhichincludeordinarysharecapitalandreservesthatisprofitandlossaccount（inappropriateprofit）,arenointerestpayment,norepaidpayment;

moreflexibilityonthepaymentofadividend.But,anywaytheownersusethelimitedliability,thecompanywillfailstopayoutadividendandthesharepricewillfall,leavingthecompanyatriskofaturnoverbid.

Thesharecapitalandreservesarelong-termfinance.Sotheordinarysharedividendpaidwillvaryaccordingtothelevelofprofits.Inappropriateprofitistheunusedprofitremainingiscarriedintothenexttradingperiod.

Loancapitalisreferstomoneythatisborrowedfromasourceoutsidethebusiness.Thisloanmustberepaidinfullwithinterestadded.Inthecase,TheSSP’stradecreditors;

bankoverdraftanddebenturesareincludedinthiscategory.Theymustberepaidinfullwithinterestadded.Astheresult,thereisthepossibilityoflosingthecollateralorsecurityifrepaymentstermsarenotmeet.

Inthecase,Bankoverdraftwasshort-termloanandthatisincreasedfrom0in2003to86,000in2004,thisactionisagoodwaytofinancing.Thiskindofsourceisafairlycheapformoffinancewiththeaddedadvantageofflexibility.Insomecasesasmalloverdraftfacilitymaybeofferedfreeofcharge.

Tradecreditorisanotherformofshort-termfinance.Inthecase,wecanseethetradecreditorisdecreaseby25.6%overoneyear（2003-2004）,butthisisanotgoodsignbecausetheCreditorsPaymentPeriodRatioin2004isshorterthan2003.Usingtradecreditmayappeartobeaninterestfreewayofraisingfinance,however,bydelayingpaymentforgoodscustomersmayforfeitdiscounts.Delayedpaymentscanalsoleadtopoorrelationswithsuppliers.

Debenturesarelong-termloans.Inthecase,thedebenturesofthetwoyearsarethesame,itis1560,000,andwecanfindthisisalargepartofmoneyinthecashrunningofthiscompany,whichmadetocompaniesthatcarryafixedrateofinterest.Thecompany’sfixedassetsnormallysecuredebentures.Debenturesmayhaveafixedtimeperiodoranopentimeperiod.Debentureholdersarenotshareholders;

thereforeitreferredtoasexternal.

4.RatiosanalysisaboutSSP’sbusiness

a.ProfitabilityRatios:

GrossProfitPercentage:

GrossProfit

Turnover×

100%

2003:

7000

11674×

100%=59.96%

2004:

8037

13382×

100%=60.05%

ReturnonCapitalEmployed:

NetProfitbeforeTax

OrdinaryShareholderEquity×

1182

2885×

100%=40.97%

901

3305×

100%=27.26%

TheGrossProfitpercentagehasincreasedform59.96%to60.05%.Thisisanimprovementonthepreviousyearandshowthatthecompanyhasincreasedprofitabilityatthetradinglevel.

ReturnonCapitalEmployedhasdecreasedfrom40.97%to27.26%.ThisisnotahealthysignandisduealmostentirelytoadecreaseinNetProfitbeforeTaxof￡1182.Existingshareholderswillnotbehappywiththereturnandpotentialshareholdersmightbedissuadedfrominvesting.

b.LiquidityRatios:

CurrentRatio

1195:

767→1.56:

1

1248:

701→1.78:

1

AcidTest:

LiquidAssets:

CurrentLiabilities

（1195-608）:

767→0.77:

（1248-796）:

701→0.64:

TheCurrentratiohasincreasedfrom1.56:

1to1.78:

1,butthisisnothealthyastheratioiscurrentlywellbellowtheidealof2:

1.TheSSPpresentleveloftradecreditorswasreduced,thecompanynowhasan$86,000overdraft.Stockhasincreasedby30.92%.

Theacidtestratiohasdecreasedfrom0.77:

1to0.64:

1（theperfectsituationis1:

1）.Thisisnotagoodsignandsincestockisexcludedfromthecalculation,isdueentirelythe86,000overdrafts.

c.EfficiencyRatios:

FixedAssetTurnover:

Turnover

FixedAssets

11674

4017=2.91times

13382

4318=3.10times

StockTurnover:

CostofGoodsSold

ClosingStock

4674

608=7.69times

5345

796=6.71times

DebtorsCollectionPeriod:

Debtors

365

306

365=9.57days

452

365=12.33days

CreditorsPaymentPeriod:

Creditors

CostofGoodssold×

544

4674×

365=42.48days

405

5345×

365=27.66days

TheFixedassetsturnoverratiohasincreasedslightlyfrom2.91to3.10times—thisisagoodsign.Each￡offixedassetsnowgenerated$3.10ofsalesasopposedto$2.91thepreviousyear.Fixedassetsarenowbeingusedmoreefficientlyandmaybeduetoreduceddowntimeonmachineryandthereplacementofoldplantandmachineryduringyear2004（$984,000spentonfixedassets）.

StockTurnoverratiohasdecreasedfrom7.69timesperyearto6.71times.Thisisnotagoodsign.Inthecase,SSPshouldinvestigatestockmixasitmaycontainsomeslowmovingorobsoletelines.Theseshouldbereducedinpricetoclear.

DebtorsCollectionperiodhasimprovedwith