digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. Assessing a Company’s Future Financial Health Assessing the long-term financial health of a company is an important task for management as it formulates goals and strategies and for outsiders as they consider the extension of credit, long-term supplier agreements, or an investment in a company’s equity. History abounds with examples of companies that embarked on overly ambitious
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Treasury management (or treasury operations) includes management of an enterprise's holdings, with the ultimate goal of maximizing the firm's liquidity and mitigating its operational, financial and reputational risk. Treasury Management includes a firm's collections, disbursements, concentration, investment and funding activities. In larger firms, it may also include trading in bonds, currencies, financial derivatives and the associated financial risk management. Most banks have whole departments devoted
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Principle 1: Establish Clear Roles and Responsibilities The chairman leads the Board, and the President and Group Chief Executive Officer (CEO) leads the executive management of the Company and provides direction for the implementation of the strategies and business plan as approved by the Board and the overall management of the business operations Groupwide. The Board of Directors (Board) of PETRONAS Gas Berhad recognizes that its primary responsibility is to safeguard and promote the interests
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(comparison and relative advantages of the chosen organization) 5 (c) Compare and comment on the finances of business: 7 (d)Recommend potential investor for the investment decision: 8 (e)All possible Sources of finance for 500000 and best source 8 (f) Management of working capital: 10 Task 2: 11 (a)Preparations of a cash flow forecast and comment on budget and cash flow: 11 (b)Recommendation for managing cash flow: 12 Task 3: 12 (a)Assessment of projects by financial techniques: 12 (b) Recommendation
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other current liabilities. Jackie needs to scrutinize all relevant information, and finds the reasons of the change. • lawsons’ trade debt The current trade debt was owned by Forsyth Wholesale Ltd. The high interest is one of the biggest expenditure. This is why Mackay wanted to transfer this trade debt to bank loan from Commercial Bank. Analysis Financial Ration Analysis • Profitability COGS has remained constant, it showing good purchasing and cost control management. Also reasonable
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days | Days Payables | 60.38 | 58.83 | days | Total Asset Turnover | 0.81 | 3.17 | times | Fixed Asset Turnover | 13.33 | 5.26 | times | | | | | Profitability | | | | Net Profit Margin | 3.05 | 2.45 | % | Return on Assets | 5.91 | 7.77 | % | Return on Equity | 4.03 | 16.8 | % | Quality of Income | 254 | 7.03 | cents | | | | | Leverage | | | | Times Interest Earned | 2.64 | 64.72 | times | Assets/Equity | 1.63 | 2.16 | times | | | | | Dividends |
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Income Statement: Revenue Expenses Operating profit Financial income and expenses Profit before income tax Net profit for the year Consolidated Balance Sheet: Total assets Equity Liabilities Consolidated Cash Flow Statement: Cash flows from operating activities Investment in property, plant and equipment Investment in intangible assets Cash flows from financing activities Total cash flows Employees: Average number (full-time) Financial ratios (in %): Gross margin Operating margin Net profit margin
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Summary………………………………………………………………….3 Financial Statement Overview……………………………………………………….4 Purpose of Study……………………………………………………………………..6 Limitations of Study………………………………………………………………….6 Definition of Term/Formulas…………………………………………………………6 Management Discussion and Analysis………………………….…………………….6 Notes to Consolidated Financial Statements…….…………..……………………….11 Exploration of Balance Sheet…………….……….………………………………….15 Exploration of Income Statement………….………..……………….……………….20
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2. Assets on the balance sheet are recorded at market value or replacement cost. True False 3. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners. True False 4. The accounting period in which service revenue is recognized (i.e., revenue for services rendered) is generally the period in which the cash is collected. True False 5. Total assets are $70
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Current Ratio 2002 Current Ratio = Current Assets/Current Liabilities 1,165065.00/1185008.00 = 0.983 2003 Current Ratio = Current Assets/Current Liabilities 1,244,261.00/1,316,101.00 = 0.945 2004 Current Ratio = Current Assets/ Current Liabilities 2,191,243.00/1,972,131.00 = 1.111 Long Term Solvency 2002 Long Term Solvency = Total Liabilities/Total Assets 1185008.00/1165065.00 = 1.017 2003 Long Term Solvency = Total Liabilities/ Total Assets 1316681.00/1244261.00 = 1.058 2004
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