flow problems. The business owner believes that his customers are taking too long to settle their accounts. By calculating their debtors days and recording the results‚ it will be possible not only to establish what the current position is‚ but also to set targets for the future. This may be to reduce the debtor days from thirty five to twenty five days. A reduction in debtor days will help ease cash flow and reduce the risk of bad debts. An organisation should select a number of ratios which provide
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related to these topics and provide your comments and opinions in your write-up‚ not more than 10 pages. Financial distress can be defined as situation in which a company can’t meet or faces difficulty paying off its due financial obligation to its creditors. Generally the chance of financial distress enhances when a firm has high fix cost and high leveraged‚ it has illiquid assets‚ or revenue are sensitive to economic downturn. A company under financial distress incurs related to the situation for instance
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(a) DEL CREDERE : A del credere agent is a mercantile agent who in addition to his work of bringing a contract between his principal and third parties also undertakes to be liable to the principal for the default of the third party to perform the contract. In other words‚ he also guarantees to his principal the performance of the contract by the third party. He gets extra commission for this extra risk taken by him. Such commission is called ‘Del credere’ commission. Thus the Del credere agent
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Foakes v Beer is a case similar to Pinnel’s case. It is argued that nominal consideration is adequate; it’s solely designed to point out that the promise is meant to be de jure enforceable. In the case of Foakes v Beer‚ there are in a debtor (Dr Foakes) and creditor (Mrs. Beer) relationship. Dr Foakes owed Beer a sum of money to Mrs. Beer about £2000‚ and he is unable to pay the full amount in a lump sum‚ awarded in damages from an earlier case. The parties agreed that if Dr Foakes paid £500 promptly
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EVALUATING FINANCIAL PERFORMANCE 1 Prepared by: Kha Pham CHAPTER OBJECTIVES The principles of interpretation of financial information‚ especially the importance of comparisons Why non-financial information is needed to supplement financial information How to calculate and interpret profitability ratios‚ especially ROCE and its components How to analyse a company’s borrowings in terms of gearing and interest cover 2 CHAPTER OBJECTIVES (CONT’D) How to calculate liquidity and
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T1 & 2 (Q) (1) Which one of the following is an example of an internal stakeholder? A A shareholder B Investment analyst / consultant C A manager D A supplier (2) What is the primary responsibility of the external auditor? A To verify all the financial transactions and supporting documentation of the client B To ensure that the client’s financial statements are reasonably accurate and free from bias C To report all financial irregularities to the shareholders of the client D To ensure that
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Reasons for cashlow problems : Overtrading/over expanding Short trade credit Long debtors period Over stocking Idle assets Outflows more than inflows(mismanagement of working capital) Uncontrolled expenses Decline in sales Solutions to cash flow problems Slow down expansion Prolong trade credit Shorten debtors period Get rid of stocks (JIT) Sell idle assets Improve the working capital cycle Control expenses Increase sales by promotion and advertising It seems
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M004LON Finance‚ Funding and Legislative Frameworks For Success Coursework One: Data Response (Evaluation of Marks & Spencers plc) Submitted by: Binish Babu ( Nakul Vinod (3943256) Julin Ann Thomas (3997710) Date of submission: 4th March‚ 2012 Word count : 1492 words Contents EXECUTIVE SUMMARY 2 INTRODUCTION 2 Ratio Analysis 3 1) Liquidity ratios 3 2) Solvency ratios 3 3) Working capital management ratios 3 4) Profitability
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result in inadequate and inharmonious legal approaches‚ which hamper the rescue of financially troubled businesses‚ are not conducive to fair and efficient administration of cross-border insolvencies‚ impede the protection of assets of the insolvent debtor against dissipation‚ and hinder maximization of the value of those assets. 2. Definition of “cross-border” insolvency Cross-border insolvency is a term used to describe circumstances in which an insolvent entity has assets or debts in more than
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of one of their clients M/s Vinod Enterprise. Liabilities Amount Assets Amount Equity Share Capital 50000 Fixed assets 87500 8% Pref Share Capital 10000 Investments 25000 Reserve Fund 40000 Stock 30000 6% Debentures 20000 Sundry Debtors 13500 Sundry Creditors 30000 Bank Balance 7000 P & L account Year 2000 - 1000 2001 - 20000 21000 Preliminary expenses 8000 Total 171000 Total 171000 The director intent to transfer a sum of Rs.5000 out of the current year’s profit to provision for
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