hnd商务会计高级outcome 4 5报告答案

IndexpageIndexpage………..….Introduction………….Background………..…FindingsSection1…………Section2…………Section3…………Conclusion…………..Reference…………….IntroductionBackgroundSSPplcisacompanyoperatinginthefoodmanufacturingindustry.Itisengagedinfoodprocessing,supplyingallthemainsupermarketchainswithfirstclassprocessmeatproducts.DuringthelastfewyearsthecompanyhasbeendifficultbecauseoftheBSEandFootandMouthdiseasemadeadecliningdemandformeatproduct.Thebadoutstandingachievementstoppedin2004andapartialreboundinthemarketproducedanincreaseinturnoverbynearly15%.ItisexpectedthatthisreboundinthemarketwillgathermomentumoverthecomingyearandtheSSPplcisplanningtotakeevengreaterstridesforwardbyopeninganewprocessingplantinGlasgow.Asrequestedinthechiefexecutivesmemoof30December,hereismyreportsummarisingandanalysisingthefinancialpositionoftheSSPplcfortheyear2003and2004.OutlineThemainbodyofthereportwillevaluatefiveparts:Part1Analyzetheusersoffinancialinformationandthepurposeofusing.Part2Stateoffinancialsourceandcategorizewiththeircharacteristics.Part3ExplainthecashflowstatementofSSPplc.AnalyzetherecentfinancialperformanceandpositionoftheSSPplc.(Includingmyrecommendationsabouthowtoimprovementofbusinessperformance)FindingsSection1.Usersoffinancialaccounts.Usersoffinancialstatementsareagroupofpeopleororganizationswhousetheinformationtomakeevaluationsanddecisions.Usersoffinancialinformationcanbedividedintotwocategories:internalandexternalusers.Now,Iwilluseatabletoshowyoutheusers’purposeandsourcesofinformationtheyusetogetthestatements.Section2.SourceoffinancesTorunabusiness,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.Itlowcost.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.RetainedProfitsTheretainedprofitisthefinancebroughtfromthelastfinancialperiod.Itisnotfixedandmaybeanegativenumber.Itpresentsoperationalsituationoflastperiod.Theretainedprofitsdecreasedfrom£505,000to£420,000.Thepercentagechangeofdecreaseis16.83%.Thelowerratioshowsusthecompanyhadmadefewerprofitsin2003thenitwasin2002.Section3.RatioAnalysis1.MajorinflowsisNetcashflowoperatingactivatesof£1,345,000.MajoroutflowisPaymentstoacquirefixedassets,whichtakes£984,000.2.RatioAnalysisProfitabilityRatios:GrossProfitPercentage=Grossprofit/Turnoverx100%2003:GPP=£7,000,000/£11,674,000x100%=59.96%2004:GPP=£8,037,000/£13,382,000x100%=60.06%Trend:IncreaseAnalysis: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:DecreaseAnalysis:Thedecreaseoftheratioisabadsignthatitindicatesalowprofitofthecompany.FromtheP&LAccountoftheSSPplc,weknowthatalthoughthegrossprofitincreased,theoperationcostismuchhigherin2004;itleadstoadecreaseinnetprofit.Sothemanagersshouldthinkabouthowtodecreaseouroperationcosttohelpourcompanyearnmoreprofit.LiquidityRatios:CurrentRatio=TotalCurrentAssets/TotalCurrentLiabilities2003:CR=£1,195,000/£767,000=1.562004:CR=£1,248,000/£701,000=1.78Trend:IncreaseAnalysis:theincreaseofratioisagoodsign.Generallyspeakingahealthycurrentratioisatleast2:1.The1.56and1.78indicatethecompanyisalittlebitovertradingandhavedifficultyinmeetingitsshort-termdebts.Themainreasonfortheincreaseistheincreaseinthetotalcurrentassetsanddecreaseinthetotalcurrentliabilities.Isuggestthatthecompanymaykeepmoreprofitfortheshort-termdebts.TheAcidTestRatio=LiquidAssets/CurrentLiabilities2003:(£1,195,000-£608,000)/£767,000=0.772004:(£1,248,000-£796,000)/£701,000=0.64Trend:DecreaseAnalysis:Thedecreaseisabadsign.Theratioshouldbe1:1.Buttheratioinbothof2003and2004islessthat1.Andunfortunately,theratioisstilldecreasing.SSPplcmeetsaliquidityproblemthattheliquidassetsdecrease.Thecompanymanagersshouldtothisratioandorganization’sdevelopment.EfficiencyRatios:FixedAssetTurnover=Turnover/FixedAssets2003:£11,674,000/£4,017,000=2.91times2004:£13,382,000/£4,318,000=3.10timesTrend:IncreaseAnalysis:Wherethisratiogasincrease,thisisagoodsign.Itindicatesthattheexistingfixedassetsaregeneratingmoresalesandmaybeinvestmentinnewfixedassetsgascouldbebeenpaidoff.ManagersofSSPplcshoulddevelopandfocusonit.DebtorsCollectionPeriod=Debtors/Turnoverx3652003:£306,000/£11,674,000x365=9.57days2004:£452,000/£13,382,000x365=12.33daysTrend:IncreaseAnalysis:ItisabadsignthatthereisanincreaseinDCP.ItindicatesthatSSP’smayhaveapoorcreditcontrolofpoorinvoicingsystem.Thebaddebtsmayalsoincrease.TheleadersofSSPshouldchecktheirinvoicingandremindersystemtokeeptheratioaproperrange.InvestmentRatios:InterestCover=ProfitBeforeInterest&Tax/InterestCharges2003:£1,416,000/£234,000=6.052004:£1,135,000/£234,000=4.85Trend:DecreaseAnalysis: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:DecreaseAnalysis:Itisagoodsignthattheratioincreased.However,ahealthyratioshouldkeeparound50%.ItindicatesthatSSPhasfewerliabilitiesorkeepsmoreassets.Thesignshouldbekeptbymanagers.3.RecommendationAfterreadingandanalyzingthreeaccountsfromSSPCompany,IfoundsomeproblemswithitandnowIwillpresentmysuggestionsaboutthefuturemanagementinthesetwoparts.OperationalrecommendationAratioofNetProfitPercentageshowsusthatSSPplchasahighexpenditureinoperationcost.Italsoindicatesthatthecompanyhasalowlevelofcostcontrol.Therefore,IsuggestthatSSPshouldtrytodecreasethecostsofsalesandtheoperationcost,suchasadoptingnewmanagementsystemandusingcontractorstofinddistributi