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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Accounts Receivable Management Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services. They are generally expected to be collected within thirty to sixty days and are the most significant type of claim held by a company. There are two costs associated with extending credit to customers: 1. The cost of the selling company not being able to deposit the monetary value of a completed sale in its bank that is‚ as a result of not collecting cash
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April Sales LESS: Cost of Sales GROSS PROFIT LESS EXPENSES: Salaries/Wages General Expenses Depreciation TOTAL EXPENSES NET PROFIT ADDITIONAL INFORMATION: all sales are made on credit: 60% of debtors pay in the month following the sale; 30% of debtors pay in the second month following the sale; 10% of debtors pay in the third month following the sale. (All purchases are made on credit) Purchases for March were $30‚000 Throughout the three months‚ stock
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ii. Several debtors’ confirmation letters were returned because the addressees had changed their mailing addresses. iii. A large sum of sales transactions was found with no supporting documents. Most of these transactions involved small clients. iv. A loan received from a Hong Kong based company was found to be incorrectly recorded in the debtors’ account. v. Several abnormal transactions involving the purchase of aircrafts by FCB and offsetting the debtors’ accounts were
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Basic Bookkeeping - Assessment 1 Will Oliver 1. An example of daily financial records that you would have to maintain is any transaction (in monetry terms) made by an organisation which encompasses the cash and cash equivalant you receive or spend on any day. It is essential to keep separate evidence of each transaction. This evidence is called a source document i.e invoices‚ reciepts‚ cheques etc. Also‚ maintaining and updating your accounts receivable and accounts payable daily is another
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Depreciation (Continued) ……………………... Depreciation on Purchase and Disposal of Fixed Assets ……………… Revaluation of Fixed Assets …………………………………………... Bank Reconciliation Statement ……………………………………….. Bank Reconciliation Statement (Contd.)………………………………. Debtors‚ Creditors‚ Accruals and Provision for Bad Debts …………… Provision for Bad Debts and Control Accounts ……………………… Control Accounts (Contd.) …………………………………………… Control Accounts (Contd.) …………………………………………… Rectification of Errors ………………………………………………… Presentation
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PROJECT REPORT ON WORKING CAPITAL MANAGEMENT AT KIRLOSKAR PNEUMATICS CO. LTD‚ HADAPSAR. Submitted By: Rajesh Menon (M.B.A-II) In Partial Fulfillment for Degree of Master of Business Administration during the year 2006-07 VISHWAKARMA INSTITUTE OF MANAGEMENT‚ PUNE. 1 ACKNOWLEDGEMENT It is a matter of great satisfaction and pleasure to present this report on Working Capital Management of KIRLOSKAR PNUEMATIC CO. LTD. (KPCL)‚ Pune 411013. I take this opportunity to owe my thanks to all
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Assessment 1. Written Assessment 1. Give an example of daily financial records that you could have to maintain? Update your accounts receivable and accounts payable daily on your accounting computer using the software provided or modifies to suit the organisational particular needs. 2. What are the requirements regarding identifying and rectifying errors in documentation? - Using the right accounting method: cash and accrual - Using professional bookkeeping method: hiring specialist‚ qualified
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there must be one more party-receiver. If one part is seller; there must be the other party purchases. Receiver of the transaction is debtor and the giver is the creditor. Thus the transactions take place between two parties‚ according to Double Entry System every transaction is recorded twice. One party is the debtor and the other party is giver. Receiver is the debtor and giver is the creditor. Benefits: • Accuracy of accounts. The greatest advantage of Double Entry System is that arithmetical
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TO: Kelvin Tan‚ Board of Director FROM: Amy Lim‚ Finance Director DATE: 20 May 2013 SUBJECT: Capital structure and financing of Cheetah Holdings Berhad Introduction Cheetah Holdings Berhad was established in year 1977. The company was listed on the Second Board of Bursa Malaysia Securities Berhad on 19th January 2005. In year 2007‚ they have moved into the First Board of Bursa Malaysia Securities Berhad. The objective of Cheetah Holdings Berhad is to grow its bottom
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