Contents Executive Summary 2 Business and Strategic Analysis 3 1. Economic Analysis 3 2 Industry Analysis 4 3 Competitive Strategy 6 4 Industry and company’s potential 7 Accounting analysis 9 Step 1: Identify Key Accounting Policies 9 Step 2: Accounting Flexibility 10 Step 3: Evaluate accounting strategy 11 Step 4: Quality of disclosure 12 Step 5: Potential red flags 12 Step 6: Undo accounting distortion 13 Financial Analysis 13 1. Profitability 13 2. Liquidity 14 3. Solvency 16
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DEBT MANAGEMENT & LEASING CASE STUDIES Case study 1 Situation: Raiyan Mellizas works as a clerk in one of the clothing companies in the Philippines for about seven years. He supports his family and himself through his job. He uses credit cards for additional to pay his essentials and his expenses. Question1: By the time Raiyan couldn’t control his expenditure using credit cards and he is having a difficulty in paying his debt‚ what he supposed to do? Carrying debt can be extremely stressful
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1. Introduction Over the past few decades‚ there is a continuing global expansion of trade and investment. As there are more and more companies doing business not only in their home country‚ they may have assets and/or establishment in other countries‚ or even their activities take place other than the company has its registered office. In case of insolvency of such a company‚ many legal issues arise. Therefore‚ a well-equipped national insolvency laws dealing with such cases is needed. Without
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1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family‚ unless the law or the stipulation of the parties requires another standard of care. (1094a) Article 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However‚ he shall acquire no real right over it
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unless authorized by the other partners. Except when authorized by the other partners or unless they have abandoned the business‚ one or more but less than all the partners have no authority to: (1) Assign the partnership property in trust for creditors or on the assignee’s promise to pay the debts of the partnership; (2) Dispose of the goodwill of the business; (3) Do any other act which would make it impossible to carry on the ordinary business of a partnership; (4) Confess a judgment; (5)
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firm | 3 | Debt –Equity ratios | long term debtequity | 1:2 | Indicates long term solvencyHigher ratio is riskier for the creditors | 4 | Proprietary ratio | Shareholders’ fundsTotal tangible assets | | Variant of debt-equity ratioShows the extent of shareholders funds in the total assets employed in the businessHigher ratio indicates relatively little danger to creditors and vice versa | Notes 1) Current assets are those assets which can be converted into cash within a period of one year
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covered by the Consumer Credit Acts 1974. Consumer Credit Acts 1974 consist of several types of Credit Transactions‚ including hire purchase‚ conditional sale and so on. In terms of agreements‚ one is “Credit Agreement that is an agreement where the creditor providers the debtors with credit. Exempt agreement‚ which contains mortgages and fixed sum agreements‚ is another agreement but not covered by the Consumer Credit Acts.”(Consumer and Commercial law textbook p146) Achieving requirements from Credit
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liquidates assets that are not exempt and uses the proceeds to pay creditors. In this bankruptcy creditors may be paid in full or a percentage based on the assets that were available. There is Chapter 11 which is for a business. Chapter 11 allows a business to reorganize its operation and finances so that it can pay its creditors. Sometimes in Chapter 11 another entity may take over the original entity in the reorganization. Creditors are told to give the entity time to reorganize and pay the debts
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Abstract Financial statements are used by so many different types of people from investors‚ to creditors‚ managers and even employees. These statements are proven useful tools that provide valuable information about a business enabling the user of the statements to make the most appropriate business decisions. Financial Statements Four Basic Financial Statements There are four basic financial statements in accounting: 1. Balance Sheet 2. Income Statement 3. Retained Earnings Statement
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internal user; such as managers and employees‚ but also to external users; such as investors and creditors to communicate the company’s respective accounting information. “The balance sheet reports assets and claims to assets at a specific point and time. Claims to assets are subdivided into two categories: claims of creditors and claims of owners” (Kimmel‚ Weygandt‚ & Kieso‚ 2011‚ p. 13). The claims of creditors are also known as liabilities‚ which are funds owed‚ and assets are the items that a company
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