Based on the information provided, issuing additional common stock through a private placement or OTC offering both have benefits and costs that Archie and his investors should consider:
Private placement:
- Pros: Quick to raise funds, flexibility in deal terms, easier negotiation on investor returns
- Cons: Difficult to find suitable investors, risk of raising insufficient funds
OTC offering:
- Pros: Shares sold widely to attract more investors and capital, no limit on amount of capital raised
- Cons: Lack of professional feedback, easy to lose control of company if large investors emerge
Overall, a private placement allows more control over ownership but risks not raising enough funds. An OTC offering raises capital more quickly but with less
The document contains a table of contents and summaries of 3 tasks related to analyzing financial ratios and budgets for a company called Archie's. Task 1 discusses manufacturing, sales, and inventory managers and the costs they should consider. Task 2 presents budgets for raw materials, production, and costs. It also discusses benefits and limitations of budgets. Task 3 shows Archie's financial ratios for profitability, borrowings, and shareholders' investment compared to industry averages for 2013 and 2012.
This document provides information and tasks for a group assignment on Archie's business for a BTEC HND in Business course. It includes:
- An assignment cover sheet with submission details.
- Four tasks involving analyzing information needs for decision makers, preparing budgets, and evaluating financial performance using ratios.
- Background information on Archie's proposed electronic components business and financial statements for 2013 and 2012.
- Grading criteria for a pass, merit, or distinction.
- Presentation requirements for submitting the assignment report.
The document discusses the nature and purpose of business. It defines economic and non-economic activities, and explains business, profession, and employment as forms of economic activity. It outlines the key features of each, and discusses objectives of business including profit earning and social responsibilities. The document also covers classification of industries into primary, secondary and tertiary sectors and defines commerce and its various components like trade, transport, banking etc. It concludes with definitions of business risk.
The document provides information about Company Secretarial Practise Afterscho☺ol, which conducts comprehensive social entrepreneurship programs. It details the PGPSE program, which aims to develop social entrepreneurs and change makers. It also discusses workshops conducted in schools and colleges to promote social entrepreneurship. The program has flexible specializations and is the world's most comprehensive program in social and spiritual entrepreneurship.
This document contains details about Marlia Haryanti, including her personal information, education, skills, work experience and responsibilities. She has 7 years of experience as an Assistant Accountant. Currently she works at PT Heat Exchangers Indonesia, where her responsibilities include accounts receivable, assisting the accountant, inventory management, and budget cost control. Previously she held similar roles at PT KPE Industries and other companies. She has a Bachelor's degree in Economics from Batam University.
Nikon has operated in the imaging products industry for nearly 100 years. It faces challenges from increasing smartphone popularity, including struggling to maintain competitiveness and stabilize declining income. The report analyzes Nikon, Fujifilm, and Olympus through an overview of Nikon, market analysis, financial/operational analysis, and scenario analysis. Recommendations are provided to help Nikon enhance performance.
Waqar Ahmad is an experienced finance professional seeking a challenging position applying his expertise. He has over 15 years of experience in accounting, finance, auditing and management roles. Currently he is the Deputy Manager of Accounts & Finance at Moiz Textile Mills Limited, where he oversees accounts receivable, accounts payable, general journal, and fixed assets. Previously he held positions as Manager of Accounts & Finance and Head of Internal Audit at various textile companies.
Waqar Ahmad is seeking a position applying his professional experience and knowledge to meet challenges and further organizational development and career advancement. He has over 15 years of experience in finance and accounting roles with various textile companies. His experience includes financial reporting, audit, accounts receivable/payable, payroll, and tax compliance. He is proficient in Oracle, Peachtree, and Microsoft Office applications.
The document contains a table of contents and summaries of 3 tasks related to analyzing financial ratios and budgets for a company called Archie's. Task 1 discusses manufacturing, sales, and inventory managers and the costs they should consider. Task 2 presents budgets for raw materials, production, and costs. It also discusses benefits and limitations of budgets. Task 3 shows Archie's financial ratios for profitability, borrowings, and shareholders' investment compared to industry averages for 2013 and 2012.
This document provides information and tasks for a group assignment on Archie's business for a BTEC HND in Business course. It includes:
- An assignment cover sheet with submission details.
- Four tasks involving analyzing information needs for decision makers, preparing budgets, and evaluating financial performance using ratios.
- Background information on Archie's proposed electronic components business and financial statements for 2013 and 2012.
- Grading criteria for a pass, merit, or distinction.
- Presentation requirements for submitting the assignment report.
The document discusses the nature and purpose of business. It defines economic and non-economic activities, and explains business, profession, and employment as forms of economic activity. It outlines the key features of each, and discusses objectives of business including profit earning and social responsibilities. The document also covers classification of industries into primary, secondary and tertiary sectors and defines commerce and its various components like trade, transport, banking etc. It concludes with definitions of business risk.
The document provides information about Company Secretarial Practise Afterscho☺ol, which conducts comprehensive social entrepreneurship programs. It details the PGPSE program, which aims to develop social entrepreneurs and change makers. It also discusses workshops conducted in schools and colleges to promote social entrepreneurship. The program has flexible specializations and is the world's most comprehensive program in social and spiritual entrepreneurship.
This document contains details about Marlia Haryanti, including her personal information, education, skills, work experience and responsibilities. She has 7 years of experience as an Assistant Accountant. Currently she works at PT Heat Exchangers Indonesia, where her responsibilities include accounts receivable, assisting the accountant, inventory management, and budget cost control. Previously she held similar roles at PT KPE Industries and other companies. She has a Bachelor's degree in Economics from Batam University.
Nikon has operated in the imaging products industry for nearly 100 years. It faces challenges from increasing smartphone popularity, including struggling to maintain competitiveness and stabilize declining income. The report analyzes Nikon, Fujifilm, and Olympus through an overview of Nikon, market analysis, financial/operational analysis, and scenario analysis. Recommendations are provided to help Nikon enhance performance.
Waqar Ahmad is an experienced finance professional seeking a challenging position applying his expertise. He has over 15 years of experience in accounting, finance, auditing and management roles. Currently he is the Deputy Manager of Accounts & Finance at Moiz Textile Mills Limited, where he oversees accounts receivable, accounts payable, general journal, and fixed assets. Previously he held positions as Manager of Accounts & Finance and Head of Internal Audit at various textile companies.
Waqar Ahmad is seeking a position applying his professional experience and knowledge to meet challenges and further organizational development and career advancement. He has over 15 years of experience in finance and accounting roles with various textile companies. His experience includes financial reporting, audit, accounts receivable/payable, payroll, and tax compliance. He is proficient in Oracle, Peachtree, and Microsoft Office applications.
The document outlines tasks and requirements for a group assignment on organizational behavior and management for a business management program. It provides the assignment details, including the title, submission deadlines, learning objectives to be assessed, and assessment criteria. Signatures are required from the group to confirm the work is original and from the assessor to verify the assessment.
This document provides an assignment brief for a digital video production project. Learners will produce a promotional video for a college department based on negotiations with a client. They will submit a proposal on using digital video technology, document all client communications, develop a brief with the client, and conduct a SWOT analysis. The assignment aims to take learners through the process of working to a brief, developing ideas with a client, and self-evaluating their completed work.
All about my first assignment, I up it for anyone who want to read and check the private answer for yourself. Gook luck :). In My assignment, if there is something wrong, please tell me know :3 to help together to improve ^0^
The document discusses the marketing mix of Coca-Cola, known as the 4Ps - Product, Price, Place, and Promotion. It provides details on Coca-Cola's various product lines, positioning and branding strategies, packaging considerations, pricing approaches including penetration pricing, and distribution channels. Coca-Cola has effectively utilized the marketing mix over time to build its brand equity and achieve worldwide recognition as the leading soft drink company.
Marketing can be defined as a process of socializing or communicating the value of product or service to the customers with the objective to sell products or services. It is actually a very critical function of business which focuses towards attracting the customers (Kotler, 2001). If properly planned and executed, marketing aims at getting far better results in form of increased sales, brand /image building, higher revenues, etc. The aim of this report is to provide an understanding of how marketing, research, planning and marketing mix are used in all organizations (Palmer, 2012). Marketing not only earns profitability to the marketers but also to the customers, as they have all the options in front of them to choose the best among the available ones (Palmer, 2012). Marketing is done with the aim of selling goods, services, events, experiences, ideas, people, businesses, information, awareness programs etc.
The document provides an overview of Samsung's history and operations in India. It details Samsung's entry into the Indian market in 1995 and its subsequent expansion, including establishing manufacturing facilities and R&D centers. It also outlines Samsung's product portfolio, core values and vision, and some of its key achievements in India such as becoming the largest mobile brand and a leader in product categories like LED TVs and refrigerators.
session 3.ppt introduction to financial accountingmaliha152268
This document provides an overview of accounting concepts and standards. It discusses typical business organization charts, accounting terms and principles like the monetary unit and economic entity assumptions. It also covers the basic accounting equation, different forms of business ownership like proprietorships and corporations, and the four main financial statements. Finally, it discusses accounting standards set by bodies like the FASB, IASB, and the concept of GAAP.
Managing Financial Principles and Techniques Assignment SampleAssignment Desk
The true knowledge of financial information in today’s competitive scenario is very important so that the companies will not only know about their financial position as well as compete with their rivals. The present business environment is changing at a very fast pace so the corporate, now, strongly feel that working on the same traditional principles would not be fruitful so there is a need to adopt newer and modern strategies to gain profits (Drury, 2009).So, the financial data provides enough information on the working conditions of the business. In this report, techniques such as capital budgeting, activity based costing, budgets, forecasting techniques are discussed which helps to increase the productivity
This document provides an assignment brief for a financial management course. It outlines four tasks for students to complete covering various learning outcomes around sources of finance, financial planning, decision making, and evaluating financial performance. The tasks involve preparing cash budgets, analyzing appropriate financing options, and interpreting financial statements for different businesses. Students must meet various assessment criteria to pass and can achieve higher grades by meeting merit and distinction level descriptors through critical analysis, evaluation, and independent research.
- Working capital refers to funds used for day-to-day business operations and is comprised of current assets and current liabilities.
- There are two concepts of working capital - gross working capital, which is total current assets, and net working capital, which is current assets minus current liabilities or the portion of current assets financed by long-term funds.
- A company's working capital needs can be classified as permanent working capital, which is the minimum level required continuously, and temporary working capital, which is needed to support increased sales volume.
- There are three main approaches to financing working capital - the matching approach, which matches long-term financing to permanent needs and short-term to temporary; the conservative approach
The document is an assignment for learners studying managing financial resources for a business. It provides two scenarios and associated tasks. The first task involves creating an information pack identifying sources of finance for businesses and providing case studies. The second scenario has the learner taking a temporary role as a financial consultant for a company, which involves analyzing a cash flow forecast, making recommendations to address cash flow issues, and performing an investment appraisal of two projects using net present value.
Measuring, Projecting, and Evaluating New Venture Financial PerformanceTim R. Holcomb, Ph.D.
This document provides an overview of key financial concepts for new venture finance including how to prepare and interpret balance sheets, income statements, cash flow statements, and various financial metrics and ratios. It discusses calculating and analyzing metrics like net cash burn rate, liquidity ratios, conversion periods, leverage ratios, and comparing company performance to industry peers. The document uses an example company to illustrate how to apply these concepts to a real-world case.
The document provides an overview of an introductory financial accounting lecture. It discusses key accounting concepts such as the three questions every business asks about money in, money out, and money left. It also covers the importance of accounting in identifying, recording, and communicating relevant and reliable information about a business's activities to both internal and external users. Finally, it provides examples of accounting transactions and how to analyze them to prepare basic financial statements including the income statement, statement of retained earnings, balance sheet, and statement of cash flows.
PROCESS ENGINEERING & ECONOMICS - COST ACCOUNTING & ESTIMATIONpriyachemical
The document provides details on accounting procedures and concepts. It discusses:
1. The basic accounting equation that assets must equal liabilities plus equity. It explains debits and credits in accounting entries.
2. How accounting records like journals and ledgers are used to record transactions and summarize them in a trial balance.
3. Key financial statements like the balance sheet and income statement. The balance sheet presents assets, liabilities, and equity on a particular date while the income statement shows profits/losses over a period.
4. Illustrative examples are provided of balance sheet preparation from trial balance details for different companies. Accounting ratios and limitations of financial statements are also briefly covered.
This document provides information about obtaining fully solved assignments for the SMU BBA Spring 2014 semester. Students can send their semester and specialization details to help.mbaassignments@gmail.com or call 08263069601 to receive assignments for subjects like Management Accounting, Budgetary Control, Absorption Costing, Working Capital, and Dividend Policy. The document includes sample answers to assignment questions to demonstrate the level of detail and explanations that will be provided.
The document provides information on finance in the hospitality industry. It discusses various topics related to financial accounting and management accounting that are important for those seeking a career in this field. It outlines several tasks assessing learner knowledge of sources of finance, budgeting, variance analysis, financial statements, and break-even analysis. Learners are to complete the tasks in a business report style demonstrating understanding of key concepts and application of analytical techniques.
Kim Fuller started a business recycling plastic bottles. He invested $75,000 of his savings and borrowed $90,000 from his siblings. Fuller also purchased a $162,000 warehouse, making a $50,000 down payment and taking out a $112,000 mortgage loan. In its first year, the business had $37,400 in revenue from sales and asset appreciation. Expenses totaled $23,800, resulting in $13,600 in net income. The business's assets and owner's equity increased accordingly based on the financial statements prepared.
This document provides an introduction and overview of a project report on cash flow statements. It defines a cash flow statement and lists its key objectives as providing information about cash inflows and outflows from operating, investing, and financing activities. It discusses the importance of the study for identifying weaknesses/strengths and improving financial position. Limitations include the inability to replace other financial statements and limited data from only two years. The document outlines the scope of cash flows, importance, needs and types of activities. It provides examples of cash inflows and outflows for each type of activity and discusses research methodology and sources consulted for the report.
BCO114 ACCOUNTING I Task brief & rubrics Task Final Ass.docxjasoninnes20
BCO114 ACCOUNTING I Task brief & rubrics
Task: Final Assignment (40% of the Final grade)
You must answer all the questions in the proposed business case.
This task assesses the following learning outcomes:
• Critically understand the differences between the methods of valuation of the inventory
• Knowing how to properly elaborate an income statement and determine the ending inventory balance.
LAUNCH: WEEK 10 / DELIVERY: MAY 10th, 2020, 23:59HRS ON MOODLE
Submission file format: Excel document with all the answers, clearly identifying all steps, results, journals and including comments besides each answer.
BUSINESS CASE (100 points)
Jim has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios.
During its first month of activity, the company has made the following transactions:
February 2: Purchase of Pistachios: [email protected]$/Kg $ 25.000
Purchase of Almonds: 4.000Kg @ 5$/Kg $ 20.000
Purchas of Peanuts: 6.000Kg @ 3$/ Kg $ 18.000
February 3: Purchase of Pistachios: [email protected]$/Kg $18.000
Purchase of Almonds: 2.000Kg @ 6$/Kg $ 12.000
Purchas of Peanuts: 2.000Kg @ 4$/ Kg $ 18.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
February 6: Sold to several clients:
Pistachios: [email protected] 20$/Kg $40.000
Almonds: 2.500Kg @ 11$/Kg $ 27.500
Peanuts: 3.000Kg @ 7$/ Kg $ 21.000
February 6: Sold to Fruits Lovers Inc.:
Pistachios: 500Kg @20$/Kg. $ 10.000
Almonds: 1.000Kg @ 11$/Kg $ 11.000
Peanuts: 1.500Kg @ 8$/ Kg $ 12.000
February 12 Purchase of Pistachios: [email protected]$/Kg $ 21.000
Purchase of almonds: 2.000Kg @ 8$/Kg $ 16.000
February 13: Sale of peanuts to Peanuts Lovers Inc.: 3.500Kg @8$/kg $ 28.000
February 14: Purchase of Peanuts 6.000 Kg @4$/Kg $24.000
February 19: Sold to several clients:
Pistachios: [email protected] 21$/Kg. $ 21.000
Almonds: 1.500Kg @ 13$/Kg $ 19.500
Peanuts: 3.000Kg @ 9$/ Kg $ 27.000
February 25: Purchased from various suppliers:
Pistachios: [email protected]$/Kg. $ 13.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
Almonds: 1.000Kg @ 9$/Kg $ 9.000
Peanuts: 1.000Kg @ 4$/ Kg $ 4.000
Besides these transactions, the company has had the following expenses:
Salaries: $3500
Electricity bill: $300
Renting of equipment: &800
Rent of warehouse and office: $1.500
Miscellaneous: $1.200
Jim’s accountant recommended that he should use the average cost method in order to determine the cost of the inventory sold but he is not sur e about the
consequences it nay have on his financial situation
Relying on your accounting knowledge, Jim asks you the following questions:
1: Why in your opinion did Jim’s accountant recommend the average cost method and what difference is there whit the three other methods? Explain the main
c ...
BCO114 ACCOUNTING I Task brief & rubrics Task Final Ass.docxgarnerangelika
BCO114 ACCOUNTING I Task brief & rubrics
Task: Final Assignment (40% of the Final grade)
You must answer all the questions in the proposed business case.
This task assesses the following learning outcomes:
• Critically understand the differences between the methods of valuation of the inventory
• Knowing how to properly elaborate an income statement and determine the ending inventory balance.
LAUNCH: WEEK 10 / DELIVERY: MAY 10th, 2020, 23:59HRS ON MOODLE
Submission file format: Excel document with all the answers, clearly identifying all steps, results, journals and including comments besides each answer.
BUSINESS CASE (100 points)
Jim has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios.
During its first month of activity, the company has made the following transactions:
February 2: Purchase of Pistachios: [email protected]$/Kg $ 25.000
Purchase of Almonds: 4.000Kg @ 5$/Kg $ 20.000
Purchas of Peanuts: 6.000Kg @ 3$/ Kg $ 18.000
February 3: Purchase of Pistachios: [email protected]$/Kg $18.000
Purchase of Almonds: 2.000Kg @ 6$/Kg $ 12.000
Purchas of Peanuts: 2.000Kg @ 4$/ Kg $ 18.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
February 6: Sold to several clients:
Pistachios: [email protected] 20$/Kg $40.000
Almonds: 2.500Kg @ 11$/Kg $ 27.500
Peanuts: 3.000Kg @ 7$/ Kg $ 21.000
February 6: Sold to Fruits Lovers Inc.:
Pistachios: 500Kg @20$/Kg. $ 10.000
Almonds: 1.000Kg @ 11$/Kg $ 11.000
Peanuts: 1.500Kg @ 8$/ Kg $ 12.000
February 12 Purchase of Pistachios: [email protected]$/Kg $ 21.000
Purchase of almonds: 2.000Kg @ 8$/Kg $ 16.000
February 13: Sale of peanuts to Peanuts Lovers Inc.: 3.500Kg @8$/kg $ 28.000
February 14: Purchase of Peanuts 6.000 Kg @4$/Kg $24.000
February 19: Sold to several clients:
Pistachios: [email protected] 21$/Kg. $ 21.000
Almonds: 1.500Kg @ 13$/Kg $ 19.500
Peanuts: 3.000Kg @ 9$/ Kg $ 27.000
February 25: Purchased from various suppliers:
Pistachios: [email protected]$/Kg. $ 13.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
Almonds: 1.000Kg @ 9$/Kg $ 9.000
Peanuts: 1.000Kg @ 4$/ Kg $ 4.000
Besides these transactions, the company has had the following expenses:
Salaries: $3500
Electricity bill: $300
Renting of equipment: &800
Rent of warehouse and office: $1.500
Miscellaneous: $1.200
Jim’s accountant recommended that he should use the average cost method in order to determine the cost of the inventory sold but he is not sur e about the
consequences it nay have on his financial situation
Relying on your accounting knowledge, Jim asks you the following questions:
1: Why in your opinion did Jim’s accountant recommend the average cost method and what difference is there whit the three other methods? Explain the main
c.
The document provides information about the Afterschoool Centre for Social Entrepreneurship and its PGPSE (Post Graduate Programme in Social Entrepreneurship). The 3 year program aims to develop social entrepreneurs and change makers. It teaches accounting, spiritual entrepreneurship, and offers flexible specializations. The program is available online or through part-time and distance learning. It includes case studies, industry projects, and workshops to promote social development and positive change.
The document outlines tasks and requirements for a group assignment on organizational behavior and management for a business management program. It provides the assignment details, including the title, submission deadlines, learning objectives to be assessed, and assessment criteria. Signatures are required from the group to confirm the work is original and from the assessor to verify the assessment.
This document provides an assignment brief for a digital video production project. Learners will produce a promotional video for a college department based on negotiations with a client. They will submit a proposal on using digital video technology, document all client communications, develop a brief with the client, and conduct a SWOT analysis. The assignment aims to take learners through the process of working to a brief, developing ideas with a client, and self-evaluating their completed work.
All about my first assignment, I up it for anyone who want to read and check the private answer for yourself. Gook luck :). In My assignment, if there is something wrong, please tell me know :3 to help together to improve ^0^
The document discusses the marketing mix of Coca-Cola, known as the 4Ps - Product, Price, Place, and Promotion. It provides details on Coca-Cola's various product lines, positioning and branding strategies, packaging considerations, pricing approaches including penetration pricing, and distribution channels. Coca-Cola has effectively utilized the marketing mix over time to build its brand equity and achieve worldwide recognition as the leading soft drink company.
Marketing can be defined as a process of socializing or communicating the value of product or service to the customers with the objective to sell products or services. It is actually a very critical function of business which focuses towards attracting the customers (Kotler, 2001). If properly planned and executed, marketing aims at getting far better results in form of increased sales, brand /image building, higher revenues, etc. The aim of this report is to provide an understanding of how marketing, research, planning and marketing mix are used in all organizations (Palmer, 2012). Marketing not only earns profitability to the marketers but also to the customers, as they have all the options in front of them to choose the best among the available ones (Palmer, 2012). Marketing is done with the aim of selling goods, services, events, experiences, ideas, people, businesses, information, awareness programs etc.
The document provides an overview of Samsung's history and operations in India. It details Samsung's entry into the Indian market in 1995 and its subsequent expansion, including establishing manufacturing facilities and R&D centers. It also outlines Samsung's product portfolio, core values and vision, and some of its key achievements in India such as becoming the largest mobile brand and a leader in product categories like LED TVs and refrigerators.
session 3.ppt introduction to financial accountingmaliha152268
This document provides an overview of accounting concepts and standards. It discusses typical business organization charts, accounting terms and principles like the monetary unit and economic entity assumptions. It also covers the basic accounting equation, different forms of business ownership like proprietorships and corporations, and the four main financial statements. Finally, it discusses accounting standards set by bodies like the FASB, IASB, and the concept of GAAP.
Managing Financial Principles and Techniques Assignment SampleAssignment Desk
The true knowledge of financial information in today’s competitive scenario is very important so that the companies will not only know about their financial position as well as compete with their rivals. The present business environment is changing at a very fast pace so the corporate, now, strongly feel that working on the same traditional principles would not be fruitful so there is a need to adopt newer and modern strategies to gain profits (Drury, 2009).So, the financial data provides enough information on the working conditions of the business. In this report, techniques such as capital budgeting, activity based costing, budgets, forecasting techniques are discussed which helps to increase the productivity
This document provides an assignment brief for a financial management course. It outlines four tasks for students to complete covering various learning outcomes around sources of finance, financial planning, decision making, and evaluating financial performance. The tasks involve preparing cash budgets, analyzing appropriate financing options, and interpreting financial statements for different businesses. Students must meet various assessment criteria to pass and can achieve higher grades by meeting merit and distinction level descriptors through critical analysis, evaluation, and independent research.
- Working capital refers to funds used for day-to-day business operations and is comprised of current assets and current liabilities.
- There are two concepts of working capital - gross working capital, which is total current assets, and net working capital, which is current assets minus current liabilities or the portion of current assets financed by long-term funds.
- A company's working capital needs can be classified as permanent working capital, which is the minimum level required continuously, and temporary working capital, which is needed to support increased sales volume.
- There are three main approaches to financing working capital - the matching approach, which matches long-term financing to permanent needs and short-term to temporary; the conservative approach
The document is an assignment for learners studying managing financial resources for a business. It provides two scenarios and associated tasks. The first task involves creating an information pack identifying sources of finance for businesses and providing case studies. The second scenario has the learner taking a temporary role as a financial consultant for a company, which involves analyzing a cash flow forecast, making recommendations to address cash flow issues, and performing an investment appraisal of two projects using net present value.
Measuring, Projecting, and Evaluating New Venture Financial PerformanceTim R. Holcomb, Ph.D.
This document provides an overview of key financial concepts for new venture finance including how to prepare and interpret balance sheets, income statements, cash flow statements, and various financial metrics and ratios. It discusses calculating and analyzing metrics like net cash burn rate, liquidity ratios, conversion periods, leverage ratios, and comparing company performance to industry peers. The document uses an example company to illustrate how to apply these concepts to a real-world case.
The document provides an overview of an introductory financial accounting lecture. It discusses key accounting concepts such as the three questions every business asks about money in, money out, and money left. It also covers the importance of accounting in identifying, recording, and communicating relevant and reliable information about a business's activities to both internal and external users. Finally, it provides examples of accounting transactions and how to analyze them to prepare basic financial statements including the income statement, statement of retained earnings, balance sheet, and statement of cash flows.
PROCESS ENGINEERING & ECONOMICS - COST ACCOUNTING & ESTIMATIONpriyachemical
The document provides details on accounting procedures and concepts. It discusses:
1. The basic accounting equation that assets must equal liabilities plus equity. It explains debits and credits in accounting entries.
2. How accounting records like journals and ledgers are used to record transactions and summarize them in a trial balance.
3. Key financial statements like the balance sheet and income statement. The balance sheet presents assets, liabilities, and equity on a particular date while the income statement shows profits/losses over a period.
4. Illustrative examples are provided of balance sheet preparation from trial balance details for different companies. Accounting ratios and limitations of financial statements are also briefly covered.
This document provides information about obtaining fully solved assignments for the SMU BBA Spring 2014 semester. Students can send their semester and specialization details to help.mbaassignments@gmail.com or call 08263069601 to receive assignments for subjects like Management Accounting, Budgetary Control, Absorption Costing, Working Capital, and Dividend Policy. The document includes sample answers to assignment questions to demonstrate the level of detail and explanations that will be provided.
The document provides information on finance in the hospitality industry. It discusses various topics related to financial accounting and management accounting that are important for those seeking a career in this field. It outlines several tasks assessing learner knowledge of sources of finance, budgeting, variance analysis, financial statements, and break-even analysis. Learners are to complete the tasks in a business report style demonstrating understanding of key concepts and application of analytical techniques.
Kim Fuller started a business recycling plastic bottles. He invested $75,000 of his savings and borrowed $90,000 from his siblings. Fuller also purchased a $162,000 warehouse, making a $50,000 down payment and taking out a $112,000 mortgage loan. In its first year, the business had $37,400 in revenue from sales and asset appreciation. Expenses totaled $23,800, resulting in $13,600 in net income. The business's assets and owner's equity increased accordingly based on the financial statements prepared.
This document provides an introduction and overview of a project report on cash flow statements. It defines a cash flow statement and lists its key objectives as providing information about cash inflows and outflows from operating, investing, and financing activities. It discusses the importance of the study for identifying weaknesses/strengths and improving financial position. Limitations include the inability to replace other financial statements and limited data from only two years. The document outlines the scope of cash flows, importance, needs and types of activities. It provides examples of cash inflows and outflows for each type of activity and discusses research methodology and sources consulted for the report.
BCO114 ACCOUNTING I Task brief & rubrics Task Final Ass.docxjasoninnes20
BCO114 ACCOUNTING I Task brief & rubrics
Task: Final Assignment (40% of the Final grade)
You must answer all the questions in the proposed business case.
This task assesses the following learning outcomes:
• Critically understand the differences between the methods of valuation of the inventory
• Knowing how to properly elaborate an income statement and determine the ending inventory balance.
LAUNCH: WEEK 10 / DELIVERY: MAY 10th, 2020, 23:59HRS ON MOODLE
Submission file format: Excel document with all the answers, clearly identifying all steps, results, journals and including comments besides each answer.
BUSINESS CASE (100 points)
Jim has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios.
During its first month of activity, the company has made the following transactions:
February 2: Purchase of Pistachios: [email protected]$/Kg $ 25.000
Purchase of Almonds: 4.000Kg @ 5$/Kg $ 20.000
Purchas of Peanuts: 6.000Kg @ 3$/ Kg $ 18.000
February 3: Purchase of Pistachios: [email protected]$/Kg $18.000
Purchase of Almonds: 2.000Kg @ 6$/Kg $ 12.000
Purchas of Peanuts: 2.000Kg @ 4$/ Kg $ 18.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
February 6: Sold to several clients:
Pistachios: [email protected] 20$/Kg $40.000
Almonds: 2.500Kg @ 11$/Kg $ 27.500
Peanuts: 3.000Kg @ 7$/ Kg $ 21.000
February 6: Sold to Fruits Lovers Inc.:
Pistachios: 500Kg @20$/Kg. $ 10.000
Almonds: 1.000Kg @ 11$/Kg $ 11.000
Peanuts: 1.500Kg @ 8$/ Kg $ 12.000
February 12 Purchase of Pistachios: [email protected]$/Kg $ 21.000
Purchase of almonds: 2.000Kg @ 8$/Kg $ 16.000
February 13: Sale of peanuts to Peanuts Lovers Inc.: 3.500Kg @8$/kg $ 28.000
February 14: Purchase of Peanuts 6.000 Kg @4$/Kg $24.000
February 19: Sold to several clients:
Pistachios: [email protected] 21$/Kg. $ 21.000
Almonds: 1.500Kg @ 13$/Kg $ 19.500
Peanuts: 3.000Kg @ 9$/ Kg $ 27.000
February 25: Purchased from various suppliers:
Pistachios: [email protected]$/Kg. $ 13.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
Almonds: 1.000Kg @ 9$/Kg $ 9.000
Peanuts: 1.000Kg @ 4$/ Kg $ 4.000
Besides these transactions, the company has had the following expenses:
Salaries: $3500
Electricity bill: $300
Renting of equipment: &800
Rent of warehouse and office: $1.500
Miscellaneous: $1.200
Jim’s accountant recommended that he should use the average cost method in order to determine the cost of the inventory sold but he is not sur e about the
consequences it nay have on his financial situation
Relying on your accounting knowledge, Jim asks you the following questions:
1: Why in your opinion did Jim’s accountant recommend the average cost method and what difference is there whit the three other methods? Explain the main
c ...
BCO114 ACCOUNTING I Task brief & rubrics Task Final Ass.docxgarnerangelika
BCO114 ACCOUNTING I Task brief & rubrics
Task: Final Assignment (40% of the Final grade)
You must answer all the questions in the proposed business case.
This task assesses the following learning outcomes:
• Critically understand the differences between the methods of valuation of the inventory
• Knowing how to properly elaborate an income statement and determine the ending inventory balance.
LAUNCH: WEEK 10 / DELIVERY: MAY 10th, 2020, 23:59HRS ON MOODLE
Submission file format: Excel document with all the answers, clearly identifying all steps, results, journals and including comments besides each answer.
BUSINESS CASE (100 points)
Jim has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios.
During its first month of activity, the company has made the following transactions:
February 2: Purchase of Pistachios: [email protected]$/Kg $ 25.000
Purchase of Almonds: 4.000Kg @ 5$/Kg $ 20.000
Purchas of Peanuts: 6.000Kg @ 3$/ Kg $ 18.000
February 3: Purchase of Pistachios: [email protected]$/Kg $18.000
Purchase of Almonds: 2.000Kg @ 6$/Kg $ 12.000
Purchas of Peanuts: 2.000Kg @ 4$/ Kg $ 18.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
February 6: Sold to several clients:
Pistachios: [email protected] 20$/Kg $40.000
Almonds: 2.500Kg @ 11$/Kg $ 27.500
Peanuts: 3.000Kg @ 7$/ Kg $ 21.000
February 6: Sold to Fruits Lovers Inc.:
Pistachios: 500Kg @20$/Kg. $ 10.000
Almonds: 1.000Kg @ 11$/Kg $ 11.000
Peanuts: 1.500Kg @ 8$/ Kg $ 12.000
February 12 Purchase of Pistachios: [email protected]$/Kg $ 21.000
Purchase of almonds: 2.000Kg @ 8$/Kg $ 16.000
February 13: Sale of peanuts to Peanuts Lovers Inc.: 3.500Kg @8$/kg $ 28.000
February 14: Purchase of Peanuts 6.000 Kg @4$/Kg $24.000
February 19: Sold to several clients:
Pistachios: [email protected] 21$/Kg. $ 21.000
Almonds: 1.500Kg @ 13$/Kg $ 19.500
Peanuts: 3.000Kg @ 9$/ Kg $ 27.000
February 25: Purchased from various suppliers:
Pistachios: [email protected]$/Kg. $ 13.000
mailto:[email protected]$/Kg
mailto:[email protected]$/Kg
Almonds: 1.000Kg @ 9$/Kg $ 9.000
Peanuts: 1.000Kg @ 4$/ Kg $ 4.000
Besides these transactions, the company has had the following expenses:
Salaries: $3500
Electricity bill: $300
Renting of equipment: &800
Rent of warehouse and office: $1.500
Miscellaneous: $1.200
Jim’s accountant recommended that he should use the average cost method in order to determine the cost of the inventory sold but he is not sur e about the
consequences it nay have on his financial situation
Relying on your accounting knowledge, Jim asks you the following questions:
1: Why in your opinion did Jim’s accountant recommend the average cost method and what difference is there whit the three other methods? Explain the main
c.
The document provides information about the Afterschoool Centre for Social Entrepreneurship and its PGPSE (Post Graduate Programme in Social Entrepreneurship). The 3 year program aims to develop social entrepreneurs and change makers. It teaches accounting, spiritual entrepreneurship, and offers flexible specializations. The program is available online or through part-time and distance learning. It includes case studies, industry projects, and workshops to promote social development and positive change.
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The document summarizes information about an afterschool program called BUSINESS QUIZ AFTERSCHOOL that aims to develop social entrepreneurs. It provides details about the program such as its comprehensive curriculum in social and spiritual entrepreneurship, flexible specializations, and pedagogical approach based on top business schools. The program is available fully online and aims to promote entrepreneurship and social development through workshops, case studies, and networking opportunities with entrepreneurs.
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Working capital requirements for 2014 for Archie’s company
1. NATIONAL ECONOMICS UNIVERSITY
BTEC HND IN BUSINESS
Assignment Cover Sheet
NAME OF STUDENT
REGISTRATION NO
UNIT TITLE
ASSIGNMENT TITLE
ASSIGNMENT #
NAME OF ASSESSOR
Due date
Nguyễn Hùng Chiến
10120115
Unit 2: Managing Financial Resources and Decisions
Individual Assignment 1: Archie’s Company
1 of 3
Marcus Lang and Nguyen Huu Chi
10 am Oct 25, 2013
I, __________________________ hereby confirm that this assignment is my own work and not
copied or plagiarized from any source. I have referenced the sources from which information is
obtained from me for this assignment.
________________________________
Signature
______________________
Date
-----------------------------------------------------------------------------------------------------------FOR OFFICIAL USE
1
2. ASSIGNMENT GRADE
Unit Outcomes
Outcome
Evidence for
the
criteri
a
Feedback
Assessor’s
decision
Identify the
sources of
finance
available to a
business
Explore the
sources of
finance
available to
a business
(Unit 2, 1)
Analyse the
implications
of finance as
a resource
within a
business
(Unit 2, 2)
a
Assess the
implications
of the
different
sources
b
Select
appropriate
sources of
finance for a
business
project
c
Assess and
compare the
costs of
different
sources of
finance
a
Explain the
importance of
financial
planning
b
Assess the
information
needs of
different
decision
makers
c
2
Internal
Verification
3. Outcome
Evidence for
the
criteri
a
Feedback
Assessor’s
decision
Explain the
impact of
finance on
the financial
statements
d
Merit grades awarded
M1
M2
M3
Distinction grades awarded
D1
D2
D3
Professor’s additional feedback and comments
Assignment
( ) Well-structured
Reference is done properly / should be done (if any)
Overall, you’ve
Areas for improvement:
ASSESSOR SIGNATURE
DATE /
/
NAME:.........................................................................................
(Oral feedback was also provided)
STUDENT SIGNATURE
DATE
/
/
NAME :........................................................................................
3
Internal
Verification
4. FOR INTERNAL USE ONLY
VERIFIED
YES
NO
DATE
: ..............................................................................
VERIFIED BY : ........................................................................
NAME
: ..............................................................................
4
5. Table of Contents
NATIONAL ECONOMICS UNIVERSITY....................................................................................................1
BTEC HND IN BUSINESS ............................................................................................................................1
Evidence for the criteria...............................................................................................................................2
Table of Contents..............................................................................................................................................5
Assignment.......................................................................................................................................................6
I.Introduction....................................................................................................................................................6
II.Assumption project business:.......................................................................................................................7
III.Major Finding..............................................................................................................................................8
1.Task1: ........................................................................................................................................................8
2.Task 2:......................................................................................................................................................11
3.Task 3:......................................................................................................................................................12
4.Task 4:......................................................................................................................................................15
CONCLUTION..............................................................................................................................................17
REFERENCES...............................................................................................................................................18
5
6. Assignment
I.
Introduction
Archie Andrew is a man who has been working in the electronic industry for 15 years.
Now, he want to have owner company and find four investor will go into business with him.
The main product of his company are electronic product.
About the capital, Archie has $50000, each of the investors has $125000 and they will
put into company’s assets, in company, through agreement of four investor, Archie will run
the company
Because The Archie’s company will require a total of $1500000 of financing to invest
and star up company, Archie plans to borrowing more money from other sources or sell their
shares, bonds. Firstly, he identifies the following assets he will need to conduct his
operations:
Vehicle: $50000
Equipment: $675000
Furthermore, he want to rent office space, factory space, computer machines, labour,
raw material, etc. So Archie need the possible strategy and analysis clear working capital,
balance sheet, etc. to choose suitable plan for company.
6
7. II.
Assumption project business:
Assumption Archie is a new company, and was set up in UK
UK’s general situation and the industry
-Country and capital:
England: London
Xcốt-len :Edinburgh
Side Uên :Cardiff
South Ai-len:Belfast
-Languages: English and UEN
-Region: Christian
-Government and Monarchy: Constitutional
monarchy
The UK is a leader in power and trade finance.
-Currency: Pound
City of London is one of the leading financial
market in the world.
(UK is at the forefront in conducting privatization of State enterprises, focused on
investing abroad. This country has built a capitalist economy with strong industry, excellent
services.)
7
8. III.
Major Finding
1. Task1:
A. Calculate the working capital requirements for 2014 for Archie’s company and
explain the importance of financial planning to Archie and his investors.
The costs incurred in a year
$
625,000
500,000
$
Materials
25% of $2,500,000
Labour
20% of $2,500,000
Variable
10% of $2,500,000
250,000
overheads
Fixed oberheads
20% of $2,500,000
500,000
Selling and
5% of $2,500,000
125,000
distribution
2. Raw materials are in stock for 3 months
Raw materials
3/12 of $625,000
156,250
3.Work in progess inventory is 2 months worth of 1/2 produced goods
Materials (50%
1/12 of $625,000
52,083
complete)
Labour (50%
1/12 of $500,000
41,667
complete)
Variable
1/12 of $250,000
20,833
overheads (50%
complete)
114,583
4.Finished goods represent one month of production
Materials
1/12 of $625,000
52,083
Labour
1/12 of $500,000
41,667
Variable
1/12 of $250,000
20,833
overheads
114,583
1. Dentoers take 2 months before payment
Debtors
2/12 of $2,500,000
416,667
802,083
5.Credis is taken as
Materials
1.5/12 of $625,000
78,125
Labour - 50 weeks
Variable
overheads
Fixed overheads
Selling and
distribution
1/50 of $500,000
10,000
1/12 of $250,000
20,833
1/12 of $500,000
41,667
0.5/12 of $125,000
5,208
155,833
Working capital
requirement
8
$(802,083 - 155,883)
646,250
9. - The importance of financial planning
to Archie and his investors:
B. Archie has heard of JIT and EOQ,
but does not understand the difference
between the two. Explain the difference to
him and articulate the underlying
assumptions of each approach.
“Finance is money, or, in broader terms,
it is a monetary arrangement made in
exchange for the ability to do something.
The basic sources of money are saved,
borrowings, grants and earning.” (Course
book, 2013, p25). So, Financial Planning is
a continuous process to help you in making
sensible decisions about your money that
can help you achieve your goals in life. But
the question is “Why financial planning is
important”. There are three reasons.
Good inventory management is key to a
company’s achieving its goal of meeting
customer demands and having high
profitability. There are two ways of
managing inventory, EOQ and JIT.
- Strategy Just-In-Time (JIT) is a concept
in modern manufacturing. The brief
summary is: "Right product - with the right
amount - in the right place - at the right time
necessary." In other words, the JIT is a
production system in which the flow of raw
materials, goods and products circulating in
the production and distribution planning in
detail step by step, so that the next following
can be done as soon as the process is
terminated. Thereby, there are no items in
the manufacturing process in order not to
fall into the state, pending, no labour or
equipment that has to wait for input
operation.
- Manage your income and capital or
cash management. Many businesses or
organizations have monthly changing in
revenues, they have period cash is plentiful,
have period cash is shortages. Building the
financial planning help the top to control
more easily, income expenditure budgeting
will show the best way possible in managing
income. Thus, management of income or
financial planning is necessary in increasing
cash flow.
- Costs priority: The financial planning
process helps a company can be identify the
most important expenditures, that bring
about
immediate
improvements
in
productivity, efficiency. Since, financial
planning can help in appreciating the best
investment opportunities for companies
The JIT system allows the system to
operate
most
effectively,
avoiding
unnecessary waste.
- Assess the level of risk in the
investment:
Every
business wants to reach
the long-run investment.
Thus, financial planning
helps them to assess and
avoid the risk in the
investment
9
10. - EOQ, Economic Order Quantity: is
one of the techniques for inventory control
which minimizes total holding and ordering
costs for this year. Economic order quantity
is the technique that solves the problem of
materials management. EOQ is essentially
an accounting formula determined at which
the combination of order costs and inventory
costs to the least. The result is the most cost
effective way to order quality
Based on these principles, calculation
methods will calculate the additional time to
inventory and the numbers of adding
product after each order. The model applied
in the context of supply and stable supplies
of relatively have good planning
JIT
EOQ
Just-in-Time (JIT) is a management
philosophy in Japan with the aim of
providing for the right time, right product
and amount of shares at the right time.
Economic Order Quantity (EOQ) is a method
That at producing period large quantities of
materials, businesses maintained at the
desired level with minimal cost
JIT focus on meeting the needs of customers
on time with the right quality and quantity
with minimal resources, time, and waste
material.
EOQ maintains a fixed amount of material in
their inventory and have a degree of
reorganization, in which it must be added in
order to avoid shortages and additional costs
JIT is dependent on the work ethic and EOQ is dependent on financial and marketing
commitment of the entire workforce of the strategy
company.
Assumption for the JIT model:
- It depends on the kind of product that a company produce. JIT works best in
food (perishable) business, fashion but can also be applied in cars
manufacturing like in Toyota.
-
Have good buyer-supplier relationships
-
Buyer should near the supplier in location
-
Get effective communication between buyer and supplier in both ways
-
Good demand predicting or stable demand.
- Suppliers should be flexible (if having a changing in demand, suppliers should
be able adaptation)
10
11. Assumption for the EOQ model
-
The cost of the ordering remains constant.
-
Demand is constant. (Course book, 2013)
-
The produce time is not changing or zero (Course book, 2013)
-
Purchase cost per unit are constant (i.e. no bulk discounts) (Course book,
2013).
-
The optimize plan is figured out for only one product.
-There is no delay in the replenishment of the stock, and the order is delivered in
the quantity that was demanded. (i.e. in whole batch)
2. Task 2:
they can increase both the volume of
suppliers and Archie’s sales. However, in
case if Archie pays late fee and interest,
suppliers will have more benefit in contact
like Archie must pay more interest than
normally.
On the market today, in the short
term, there are many factors affecting
customer when deciding to extend trade
credit. Specially, with Archie- a new
company, customer wants to see more and
more information like application forms,
Cost of Trade Credit ,etc. Of Archie.
To be extended a short-term (1 year)
or a long-term (more than 1 years) loan from
the bank, the banks will be checked some
information from your company. Applying
Archie, assuming Archie wants a banker
extend a short-term or long-term loan. In
deciding whether or not to extend for
Archie, how long to extend, how the interest
rate, banks will consider your financial
ability (you have grounds to show repay the
bank in a timely manner, ...), Through the
credit agreement signed, Archie’s financial
report, business plan, affordability. Bankers
can predict the Archie’s ability for repaying
the fees and interests or not. If they see a
suitable situation, Archie can be extended
loan banking. It the way the bank see con
your company when you want to extend
more money from the short-term or longterm loan bank. To be more opening, before
being extended, there are some principles of
lending if a company want to borrow money
from bank. The bank must look business
- Trade credit is one part of the process
to build business credit. It is an open
account with a supplier who lets a customer
buy now and pay later. A formal credit card
must be complete with application: The
legal name of businesses, legal owner, year
in business, industry SIC code, ID of
company, number employees, total revenues
per year, bank references, and Signatures of
the owners/officers of the company. Then, a
credit institution licensed will check the
quality of your company's reputation
through
purchase
history,
banking
information, overall financial health, and
other data. This check will be kept
continuing monthly. Besides, If Archie
wants to be accepted by the supplier, they
must ensure the contract with pay on time
the fees and interest. Different suppliers will
have different terms and conditions for
company Archie when they pay trade
credits. If Archie uses suitable trade credits,
11
12. asking for loan from you company. Can they
be trusted, is your company able to repay
(i.e. “is it a profitable one and are there
enough spare profits to be able to afford the
interest and the periodic repayment of
portions of the loan” – Course book, 2013).
Furthermore, the bank want to know the
purpose of the loan, repayment term of the
loan are very significant. Special, the bank
will need some form of security that it can
turn to if your company can not repaid (just
like a mortgage).
investor buys Archie’s shares, they become
shareholders. Shareholders own a share of
the company in which they have invested or
bought shares. This means the shareholder
can have a say in the running of Archie’s
activities. They may take part in a key
making decision of the company. In other
side, Archie is an electronic company, so in
the stock market, Archie’s share can get high
stably, so the shareholders can return on
their investment quickly and get a high
dividend per year. Adding reasonable
financial resources, ability controls the
capital, assets and income, Archie are
perfect berth stop for investor when they are
deciding to purchase a part of a stock issue
from Archie.
Financial resources, ability to return
on investment, dividends per year are
elements to help Archie to attract an equity
investor when they sell shares. When an
3. Task 3:
A. Unit 2, 1.b, 1.c: Archie and his group of investors are interested in raising the
additional needed capital by issuing more shares of common stock even if they don’t retain
control of the company
(The issuance of shares of the company and investors Archie has many advantages. it
helps companies have a large capital to help companies attract and maintain good
staff, have the opportunity to cooperate with high potential companies and more
professional. however The Archie companies willing to sell 100% of shares can lead
to unpredictable consequences. For example, dispersion of ownership, profit or loss
can be entirely firm. All information of the company have been widely publicized and
rigorous.)
Benefit
Private
placement
Cost
Quick and expense
effective.
Difficult to find
suitable investors.
Shareholders are
choice of investors.
Be danger of
insufficient in funds.
Flexibility in kind and
type of funding.
Some case limited
investors.
Burdens
Practically
Power was divided
to many part or
power of
shareholders are not
big
Lost money and time
to find suitable
investors
Investors easily
affected by small
Practicality is not
high, a company will
Easier to negotiate on
return.
Money for scrutiny
not too much.
OTC
Shares are sold widely
and publicly
Lack of comment and
feedback from
12
13. Quick attract investors
and capital to expand
rapidly
economic investment
professionals
The capital increase is
not limited from the
investor.
Easy to lose company
if appear the investor
buy all Archie’s
shares
changes, and sold
his shares
need to take time to
be permitted from
the competent
authority. But if you
want quickly
investment, this is a
good way for get fast
capital
Day by day, Archie
always proves their
ability that they can
be good in business
and show their
financial capital per
month or year.
If Archie want to
follow a long term
business, this a good
way to get a safety
funds.
Not count overall
In short time, Archie
financial and in some
can be expansion to
case, there are high
bigger with fast capital ricks.
Public stock
market
Archie’s shares are
post on NYSE, it
increase the belief of
customer
through financial
statements and
information publicly
available on the
market, Archie
increased safety for
buyers
High fees take part in
and high taxation.
Archie must follow
many rules.
The transaction will
take more time
Archie always be
carefull with any
decision investment
and must get great
satisfaction from the
investors
Increase speed
investment and reduce
the risk of high
concept of investment
However Archie
must be a company
that had a history
business in the past,
and assets more and
more than 500000$
they have. So it is
impossible for
Archie to appear in
Public stock market.
B. Unit 2, 1.a, 1.c:
With one company begin a business like Archie, they should improve their
financial through issuing bond. The company will be proactive and easy to control debt and
plan to create a payment plan. However bond still have constraints, raising by using bond are
good and safety than borrowing from a lender.
Benefit
Bonds
Bond is relatively safe
because it kind of
securities fixed income.
Issuance costs and pay
lower interest rates than
conventional bonds as
compared to the interest
rates and this means
Cost
Due to shareholder
participation in the
management of the
company should switch
can cause a change in
control of the company.
When bonds are
converted, the equity is
13
Constraints
Typically, bonds can be
sold at any time - this is
one of the advantages
compared to other types of
bonds are fixed income
securities otherwise.
However, it is also an
inherent risk of price
fluctuation. That is when
14. reducing the risk to the
issuer.
"diluted" by the
increased number of
Increase in share capital in shares outstanding, each
share when it represents a
the future to move from
lower percentage of
bond debt into equity.
ownership in the
Stock price declines are not company.
due to avoid an increase in
the number of shares on the The results of conversion
will reduce interest costs,
market quickly.
I,e, increase the taxable
Before switching bonds
income of the company.
will not reduce the income Therefore, companies
of the shareholders from
have to pay more taxes
issuing shares.
when converting.
Easier to raise capital due
to the attraction of being
able to switch from bonds
to stocks.
the sale of bonds by the end
of its term, if the price falls
at the loss, the investor will
receive less than the initial
investment (capital loss).
Professional stressed that
only invest in bonds when
you have detailed advice,
including investment
objectives and risk
tolerance of the client has
been thoroughly reviewed.
It is important, investors
must own an idle funds (not
to be used during the term
of the bonds) sufficient to
provide for the case of
capital loss due to loss of
bond prices. Overall the
biggest constraints is “Risk
of price fluctuations”
C. Unit 2, 1.a, 1.b:
From introduction, beginning capital of Archie is $5500000. Archie want to raise their
financial to $1500000 by adding $950000. However Archie want to keep the control of the
company. There are two way for Archie now, raising capital by shares and borrowing from
other sources. If Archie choose the way using shares, and still keep the control, Archie must
have at less 50% share of company or at less $750000. Then Archie should borrow
($950000-$750000= $200000).
Tax
By Shares
Rick
Financial costs
implications
Profits tax from the
financial shares
approved and all
investors are supported
by government by
coincidence tax
If a shareholders or
investors buy more
than 50% shares of
company, Archie will
be lost control. (OTC
of public stock
market). If Archie use
private placement, they
can control the amount
of shares
Dividend and money
services for keeping the
investor stay for
investment
14
15. By Borrowing
When Archie borrow
money from bank or
other sources, the
company must pay the
tax, and interest rate
depend on bank loans.
If the company is not
good business, can’t
repay debt, interest rate
that the company will
lose control or
bankruptcy
If Archie get profit,
they must pay interest,
so profit line will
decline.
4. Task 4:
A. Following profit and lost statement for Archie’s Company for 2014, we can see there
are two evidence to show Archie did raise their financing. That are “Interest Payable: 40000$
and Dividends: 22,500$”
Assumption Archie loan short term and long term.
- That dividends of 3% have been declared at year’s end, so Archie’s share equity is
22,500/3%= 750000$
- Initial, Archie has been able to utilize 150000$ of trade credit, Archie’s financial
requirement is 1500000$, then borrowing requirement is 1500000-750000-1500000 =
600000$
- 600000$ here are include short term and long term loan. So if short term is X, long term
loan will be (600000-X)
- Archie’s interest payable is 40000 with lines of credit and short term loan at 4%, long
term borrowings are available from bank at 8%, we have
4% * X + 8% * (600000-X)=40000
X=200000$
Finally, Archie’s short term loan is 200000$ and long term loan is 400000$
B. Impact the financial statement:
- Loans often require repayment monthly , which will impact your financial
statements regularly. Loan payments structured in many different ways can impact your
financial statements better in some months than in others. Some loans (gyre loans) offer
regular cash to your cash flow while other loans disappear, it will make a changing with
financial statements.
- Shares offer an cash flow, in many case not require repayment. Common shares will
impact your financial statements less than preferred shares. besides, when a company put
shares into market, contemporary it make raise dividends, and make a changing in a financial
statement
Impact the value of the company:
15
16. - If a company are borrowing more and more, tax will be low, it make increasing
mobility of capital and labor , attract skilled workers and many different sources. Then profit
before tax decrease, neither tax repayment. It make increase the value of a company
- Shares: When a company sell put more share into market, ability financial of a
company will increase because shares make increase capital. However this also make
increase tax of capital, profit after tax will decrease, so value of the company will decrease.
C. With a corporation , Shareholder has the most important role for the company , the
role of Shareholder more important . The Shareholder who directly contribute money to the
company to help companies invest in the project . Apply to Archie companies , some
shareholders are unhappy with the interest rate of dividends . If they feel that the company
pay the interest rate for the bank at 4 % and 8 % for short term and long term loan . In fact
they have only received 3 % dividend rate . They feel the money they can get to more than 3
% , they are a loss . However, if you look at the table of Archie fiscal 2014 , Revenue was $
2.5 million , which suggests the company is profitable , with revenues of non-negative , and
particularly Retained Profit for the year of the company is $ 387,880 , which this confirms
the company is to invest in a particular project in the next year . They showed us a lot of
money to keep the scale of large projects . So until next year , make sure the company will
continue to profit , and 3 % dividend that much more valuable when compared with 4 % and
8 % bank interest rates . So , a word of advice to shareholders and investors , continue to
invest in companies Archie
16
17. CONCLUTION
With a joint stock company and the new company as Archie, the efficiency is
essential. As a company in the field of electricity, Archie needs to attract more and more
investors efficiently, so companies need to have specific business strategies, creation of trust
with customers and neck their shareholders to continue to stay invested. Through the sale of
stocks, bonds, bank lending, Archie also need to calculate to please shareholders, increasing
the interest dividends and retained profits for the company to continue investing in next year.
To do that, Archie should assess the situation through financial reports, updated full
information to shareholders, and the promises made in conjunction with the development
rising dividend rate for shareholders
17
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