HND商务会计高级outcome345报告答案.docx
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HND商务会计高级outcome345报告答案.docx
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HND商务会计高级outcome345报告答案
Indexpage
Indexpage
Introduction
Background
Findings
Section1
Section2
Section3ConclusionReferenee
Introduction
Background
SSPpicisacompanyoperatinginthefoodmanufacturingindustry.Itisengagedinfood
processing,supplyingallthemainsupermarketchainswithfirstclassprocessmeatproducts.DuringthelastfewyearsthecompanyhasbeendifficultbecauseoftheBSEandFootandMouthdiseasemadeadecliningdemandformeatproduct.Thebadoutstandingachievementstoppedin2004andapartialreboundinthemarketproducedanincreaseinturnoverbynearly15%.ItisexpectedthatthisreboundinthemarketwillgathermomentumoverthecomingyearandtheSSPplcisplanningtotakeevengreaterstrides
forwardbyopeninganewprocessingplantinGlasgow.
Asrequestedinthechiefexecutivesmemoof30December,hereismyreportsummarisingandanalysisingthefinancialpositionoftheSSPplcfortheyear2003and2004.
Outline
Themainbodyofthereportwillevaluatefiveparts:
Part1---Analyzetheusersoffinancialinformationandthepurposeofusing.
Part2---Stateoffinancialsourceandcategorizewiththeircharacteristics.
Part3---ExplainthecashflowstatementofSSPplc.
AnalyzetherecentfinancialperformaneeandpositionoftheSSPplc.
(Includingmyrecommendationsabouthowtoimprovementofbusiness
performanee)
Findings
Section1.Usersoffinancialaccounts.
Usersoffinancialstatementsareagroupofpeopleororganizationswhousethe
informationtomakeevaluationsanddecisions.Usersoffinancialinformationcanbe
dividedintotwocategories:
internalandexternalusers.
Now,Iwilluseatabletoshowyoutheusers'purposeandsourcesofinformation
togetthestatements.
Section2.Sourceoffinances
Torunabusiness,organizationsrequirefinancefordifferentproposesandforvarying
lengthsoftime.Inthefinance,wedividesourcesofcapitalintotwocategories:
equity
capitalandloancapital.Equitycapitalisthefinanceprovidedbytheownerandthereisno
interesttopay.Loancapitalreferstomoneythatisborrowedfromasourceoutsidethe
business.Theinterestofloancapitalmustbepaid.Sourcesoffinancescouldbeclarified
intoshort,mediumandlongterm.Theshort-termreferstofinancethatareborrowedfor
aperiodofnomorethanoneyear.Themedium-termreferstofundsthatareborrowedfor
aperiodofbetweentwoandtenyears.Long-termreferstofundsthatareborrowedfora
periodofmorethantenyears.
Inthecasestudy,thesourceoffinancesofSSPplcis:
tradecreditors,tax,bankoverdraft,
debentures,ordinarysharecapitalandtheretainedprofitsfromlastaccountperiod.
Short-termsources:
1.Tradecreditors:
Tradecreditorsareproducedwhenthepurchaseofrawmaterialsorstockisdelayingto
pay,thus,thereismorecashwhichwouldbeusedforotheruses.Thereisalsoan
interestfreewayofraisingfinance.However,thecreditcouldleadtopoorrelations
withsuppliersandthecustomersmayforfeitdiscounts.
Thecreditis£544,000in2003anditdecreasedtohep由c40fa0e0oh2004.T
decreaseis25.56%.ThedecreaseofcreditinfersthatSSPplchasagoodfinancialsituationthatithasastrongabilitytopaycreditsbacktosuppliers.Thiscouldimprovetherelationshipwithsuppliers.
2.Bankoverdraft:
Bankaccountholderscanprearrangewiththebanktodrawchequestoagreatervalue
thantheactualbalaneeintheaccount.Interestshouldbepaidbycustomersandbank
chargeswillapplywhereanoverdraftlimithasbeenexceeded.Bankoverdraftisflexible
andcheap.Ithasalowcost.Somesmallbankoverdraftevenhasafreeofcharge.
SSPplchadnooverdraftbutthenumberincreasedto£86,000in2004.The
showsthatthecompanyborrowedmoneyfrombankforitsexpansioninGlasgow.
Long-termsources:
1.Debentures:
Debenturesareloansmaketocompaniesthatcarryafixedrateofinterest.The
company'fixedassetsnormallysecuredebentures.Debentureshaveafixedtimeperiodoranopentimeperiod.Theshareholdersarenotdebentureholders.A
debentureinterestispaidasanexpensenotanappropriationofprofit.
SSPplchasafixeddebenture(£1,560,000)intheyearof2003and2004.Ittellsusthe
company'sfixedassetsaresteady.
2.Ordinaryshares:
Ordinaryshareholdersreceivingpay-outsfromcompanyafterprefereneeshareholders
arepaid.Ordinarysharedividendsarenotfixedandsubjecttocompany
performancesanddecisionsofmanagementinpayingdividend.
infersthatthecompanyhasasteadyoperationsituation.
3.RetainedProfits
Theretainedprofitisthefinancebroughtfromthelastfinancialperiod.Itisnotfixed
andmaybeanegativenumber.Itpresentsoperationalsituationoflastperiod.
Theretainedprofitsdecreasedfrom5£5,000to42£000.Thepercentagechangeofdecreaseis16.83%.Thelowerratioshowsusthecompanyhadmadefewerprofitsin2003thenitwasin2002.
Section3.RatioAnalysis
1.
£1,345,000.
MajorinflowsisNetcashflowoperatingactivatesof
MajoroutflowisPaymentstoacquirefixedassets,whichtakes
2.RatioAnalysis
ProfitabilityRatios:
GrossProfitPercentage=Grossprofit/Turnoverx100%
2003:
GPP=£7,000,000/
£11,674,000拓9
%=
2004:
GPP=£8,037,000/
£13,382,000)60
Trend:
Increase
Analysis:
Theincreaseofratioisagoodsign.Thepositivetrendcanbeanindication
thatstockcontrolofmeatproducthasimproved,demandforthemeatproducthas
increasedafterthediseases,orpurchasingpolicieshaveimproved.Themanagersshouldkeepthegoodtrendandgoondevelopit,suchasimprovingmarketingstrategy,settingbetterpricingpolicy,orimprovingstockcontrol.
NetProfitPercentage=NetProfitbeforeTaxation/Turnoverx100%
Trend:
Decrease
Analysis:
Thedecreaseoftheratioisabadsignthatitindicatesalowprofitofthecompany.FromtheP&LAccountoftheSSPplc,weknowthatalthoughthegrossprofitincreased,theoperationcostismuchhigherin2004;itleadstoadecreaseinnetprofit.Sothemanagersshouldthinkabouthowtodecreaseouroperationcosttohelpourcompanyearnmoreprofit.
LiquidityRatios:
CurrentRatio=TotalCurrentAssets/TotalCurrentLiabilities
2003:
CR=£1,195,000/£7656000=
2004:
CR=£1,248,000/£7078000=
Trend:
Increase
Analysis:
theincreaseofratioisagoodsign.Generallyspeakingahealthycurrentratioisatleast2:
1.The1.56and1.78indicatethecompanyisalittlebitovertradingandhavedifficultyinmeetingitsshort-termdebts.Themainreasonfortheincreaseisthe
increaseinthetotalcurrentassetsanddecreaseinthetotalcurrent
liabilities.
suggestthatthecompanymaykeep
moreprofitfortheshort-termdebts.
TheAcidTestRatio=LiquidAssets/CurrentLiabilities
2003:
(£1,195,00608,000)/£767,000=
2004:
(£1,248-,(£)(796,000)/£701Q0B0=
Trend:
Decrease
Analysis:
Thedecreaseisabadsign.Theratioshouldbe1:
1.Buttheratioinbothof2003and2004islessthat1.Andunfortunately,theratioisstilldecreasing.SSPplcmeetsaliquidityproblemthattheliquidassetsdecrease.Thecompanymanagersshouldpayattentiontothisratioandorganization'sdevelopment.
EfficiencyRatios:
FixedAssetTurnover=Turnover/FixedAssets
2003:
£11,674,000/£4,Q191Q0ees
2004:
£13,382,000/£4,3H8)Q0Qes
Trend:
Increase
Analysis:
Wherethisratiogasincrease,thisisagoodsign.Itindicatesthattheexistingfixedassetsaregeneratingmoresalesandmaybeinvestmentinnewfixedassetsgascouldbebeenpaidoff.ManagersofSSPplcshoulddevelopandfocusonit.
DebtorsCollectionPeriod=Debtors/Turnoverx365
Trend:
Increase
Analysis:
ItisabadsignthatthereisanincreaseinDCP.ItindicatesthatSSPhaveapoorcreditcontrolofpoorinvoicingsystem.Thebaddebtsmayalsoincrease.TheleadersofSSPshouldchecktheirinvoicingandremindersystemtokeeptheratioaproperrange.
InvestmentRatios:
InterestCover=ProfitBeforeInterest&Tax/InterestCharges
2003:
£1,416,000/
!
5000=
2004:
£1,135,000/£2385000=
Trend:
Decrease
Analysis:
Thisratioshowshowcapablethecompanyisofcoveringitsinterestcharges.
Thedecreaseisnotgoodbecausethecompanyislessabletomeetitsinterest
payments.Buttheratioisstillinareasonablerange.Leadersshouldtrytoincrease
company'sprofittokeepthisratioahighlevel.
DebtRatio=TotalDebts/TotalAssetsx100%
2003:
(
2004:
(
£767,000+£1,56040007/000+£,195,000)x100%=44.65%
£701,000+£1,5604308/000+£1,248,000)x100%=4^62%
Trend:
Decrease
Analysis:
Itisagoodsignthattheratioincreased.However,ahealthyratioshouldkeeparound50%.ItindicatesthatSSPhasfewerliabilitiesorkeepsmoreassets.Thesignshouldbekeptbymanagers.
3.Recommendation
AfterreadingandanalyzingthreeaccountsfromSSPCompany,Ifoundsomeproblems
withitandnowIwillpresentmysuggestionsaboutthefuturemanagementinthese
twoparts.
Operationalrecommendation
AratioofNetProfitPercentageshowsusthatSSPplchasahighexpenditureinoperationcost.Italsoindicatesthatthecompanyhasalowlevelofcostcontrol.
Therefore,IsuggestthatSSPshouldtrytodecreasethecostsofsalesandtheoperationcost,suchasadoptingnewmanagementsystemandusingcontractorstofinddistributionchannelsbuttofindthemitself.
Financialrecommendation
Forthesourceoffinance,SSPhasabadperformanceoffinancialoperating.IntheCash
FlowS
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