Managing Financial Resources
A) Prepare production plan for the year 2007, showing the production in each of the months. In the plan consider the same production as it was in 2006, i.e. 3,000 garage doors. Using the production plan calculate direct cost for concrete months.
2007 budget plan
direct cost budget
unit cost
total
Timber
3200
9600000
painting and coating materials
1000
3000000
fittings
800
2400000
direct labor
4000
12000000
total
9000
27000000
indirect cost budget
Depreciation
3200000
General administration
6000000
Electricity
3000000
Maintenance
2800000
rent
9000000
salaries
10000000
total
34000000
sales budget
unit price
unit
total
25416.67
3000
76250000
Above is the production plan for the year 2007, the budget includes indirect costs and direct cost budget for the year 2007, direct costs can be expressed as per unit and therefore this can aid in calculating the cost of producing one unit, the sales price can also be achieved as shown above and it aids in providing the sales level and the profit levels.
B) Prepare the proposal of price of garage door for the year 2007. Calculate the break-even point for the production of 3,000 doors.
The break even point is the point in which the sales level equals the total expenses and therefore we have zero profits, the proposed sales price as shown in the above is 25416.67 per garage door, the table below shows the calculation of the break even point:
break even point
revenue = expenses
expenses
61000000
revenue
61000000
unit price
20333.33
The break even point of producing 3000 garage doors is the point where sales equals expenses, to break even the firm will sell its products at a unit price of 20333.33.
C) The management of the company expressed the opinion that it is possible to increase the production of garage doors to 4,000 pcs in a year without any increase of indirect cost. Modify the plan of direct cost and calculate the new break-even point for the raised production.
In the table below the indirect costs will not increase but the direct costs of production will increase, using the unit cost of each factor used in the production process we can attain the new level of expenses and hence the break even point, in this case the break even point for the production of 4000 units is at the price 17500.
increase in production to 4000
direct cost plan
unit cost
4000 units
Timber
3200
12800000
painting and coating materials
1000
4000000
fittings
800
3200000
direct labor
4000
16000000
total
36000000
indirect cost plan
Depreciation
3200000
General administration
6000000
Electricity
3000000
Maintenance
2800000
rent
9000000
salaries
10000000
total
34000000
total direct and indirect
70000000
break even point
revenue = expenses
sales price
17500
D) Prepare a report for the management of the company. The report should include the results of previous tasks A – C.
According to the budget plan for the firm it is true that at 3000 units produced the firm does not exhaust all its capacity to produce, when a firm increases its production it experiences a reduction in indirect cost due to increasing returns to scale or economies of scale, this is evident from the fact that at 3000 units production point the break even price is 20333 while at 4000 unit production the break even price is 17500.
Form the above we can conclude that the firm should increase its production to 4000 in order to tap economies of scale, when the firm increases its production without increasing fixed or indirect cost, these cost will be much more divided to many units and therefore reduce cost, when the cost of production is reduced the firm could reduce its selling price and therefore increase sales, higher profits therefore will be achieved.
E) Appraise investment projected by the technical development department to increase the production capacity. Calculate Net Present Value and Payback Period of the proposed investment. Evaluate possibilities of financing the investment.
The proposed purchase of the machine whose value is 16000000 will follow the following depreciation over the years as shown in the table below
depreciation
year
machine value
depreciation rate
depreciation
value
1
16000000
8.50%
1360000
14640000
2
14640000
18.30%
2679120
11960880
3
11960880
18.30%
2188841
9772038
4
9772038
18.30%
1788283
7983754
5
7983754
18.30%
1461027
6522726
6
6522726
18.30%
1193658
5329066
After the six years due to depreciation the value of the machine will have a value of 5329066, however the second hand value after the six years is 200000, therefore after the six years if the machine will be disposed there will be a loss after disposal valued at 5129066.
The machine however will lead to an increase in production by 500 units in the first year and 2000 units in the next year; the table below shows the production process in the next six years:
production in the next six years
4500
5000
5000
5000
5000
5000
direct cost plan
1
2
3
4
5
6
unit cost
Timber
3200
14400000
16000000
16000000
16000000
16000000
16000000
painting and coating materials
1000
4500000
5000000
5000000
5000000
5000000
5000000
fittings
800
3600000
4000000
4000000
4000000
4000000
4000000
direct labor
4000
18000000
20000000
20000000
20000000
20000000
20000000
TOTAL
40500000
45000000
45000000
45000000
45000000
45000000
Indirect costs
1
2
3
4
5
6
1360000
2679120
2188841
1788283
1461027
1193658
Depreciation
3200000
4560000
5920000
7280000
8640000
10000000
11360000
General administration
6000000
6000000
6000000
6000000
6000000
6000000
6000000
Electricity
3000000
3000000
3000000
3000000
3000000
3000000
3000000
Maintenance
2800000
2800000
2800000
2800000
2800000
2800000
2800000
rent
9000000
9000000
9000000
9000000
9000000
9000000
9000000
salaries
10000000
10000000
10000000
10000000
10000000
10000000
10000000
total
34000000
35360000
36720000
38080000
39440000
40800000
42160000
TOTAL COST
1
2
3
4
5
6
75860000
81720000
83080000
84440000
85800000
87160000
SALES
YEAR
UNITS
PRICE
TOTAL
1
4500
25416.67
114375015
2
5000
25416.67
127083350
3
5000
25416.67
127083350
4
5000
25416.67
127083350
5
5000
25416.67
127083350
6
5000
25416.67
127083350
PROFITS
YEAR
1
38515015
2
45363350
3
44003350
4
42643350
5
41283350
6
39923350
From the above production plan it is then possible that the project will add value to the firm, it will increase production levels and therefore increase the profit levels, it is possible that the project can be financed through loan or even that the machine is payable in installments. The machine has increased the revenue levels and at the same time profit levels are high, therefore it is advisable that the firm purchases the machine to experience growth and high profits.
References:
Stratton (1999) Economics: A New Introduction, McGraw Hill Publishers, US
John Francis Nash and Martin Roberts (1984) Accounting Information Systems, Collier Macmillan publishers, UK
Robin Wood (2001) Managing Complexity, Prentice hall publishers, UK
Douglas R. and John Willingham (1979) Auditing Concepts and Methods McGraw-Hill publishers, US
Case study (2006)Garage doors, s.r.o., Prague,
Author is associated with SuperiorPapers.us which is a global Research Papers and Term Papers Writing Company. If you would like help in Research Papers and Term Paper Help you can visit
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Posted by admin on May 20th, 2010
Do you think you need a credit card? At the present time, the average American family spends more than what they really should per month. In this regard, they turn to credit cards to help them make payments when they are low on cash. Statistics shows that an average US credit card owner has about four different types of cards in his wallet. The Federal Reserve Bank even states that a huge part of consumer debts is attributed to credit cards, while the rest lies in home loans, auto loans, and others.
If you are set on applying a credit card to help you out with your monthly expenses, there are some pointers for review. Note that signing up for a card means you are opening yourself to be committed to make payments on time, every month. Plus, remember that credit card companies earn from the interest that their cardholders pay, and they may even impose charges on certain credit card related services.
So what are your criteria for judging a winner? Since there are dozens of credit card companies out there, how do you decide? First, why not check out the list of already reliable card issuers. According to CreditCards.com, the top 10 card companies in the US as of 2006 are: Bank of America, JPMorgan Chase, Citigroup, American Express, Capital One, Discover Card, HSBC, Washington Mutual, Wells Fargo, and US Bancorp. Of the types of credit cards, Visa credit cards take about 54% of the market share for US card holders, while Master Card credit cards take 29%.
You can check out your bank or card company of choice online. A smart thing to do is learn about the company profile, the types of cards and differences between each one and what will you get out of being a client of theirs. Find out if you can make applications online, so things will be easier and less of a hassle for you, especially if you have a busy schedule.
When choosing a card, be sure you know what your financial needs are. Do you want a card that gives you discounts? Do you want a credit card that offers airline miles for every purchase made? Is there a card out there that allows online transactions? Are you hoping to get a credit card with low interest rates and reasonable fees? These are important points of consideration, so you get to narrow down your credit card choices better.
Also, explore the rates and fees that these credit card companies impose on their card holders. It will be preferable if you get a grace period per month, so you have enough time to make payments. Some credit card companies allow you to access your billing statement online, and make payments online as well. If you want cards that earn you points for the purchases you make, then you can select one that offers reasonable rewards in exchange for points. Some rewards come in the form of discounts, other products, and also electronic gadgets which are shown in the company catalog.
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Posted by admin on May 7th, 2010
If you are in a tough financial situation, and find yourself needing cash and your next paycheck is several days away a payday loan just might be the solution to all of your financial needs. If your think you have seen those ads for the fast cash payday loans, and you and others you know assume right away that they are scams, maybe you should think again. Sure they do charge more interest than a more traditional loan for the cash that they lend you until your next payday, but you know what, there are plenty of people who need money immediately, and have been saved by a easy, simple fast payday loans that give you cash when you need it.
Yeah, I know that I am well off now, and really want very little in my life but this was not always quite the case, just as it is not the case for millions of Americans today that work hard and live from paycheck to paycheck. There was a time when I was on the edge of absolute abject poverty with not a thing in the world. It had gotten so bad that the banks were threatening to repossess my car, which would have meant that I would not have had a vehicle to travel to and from work, and if I lost my job I would only get deeper in debt and had zero income. I needed money pretty darn bad. So, I decide to look into getting money through a payday loan advance.
By money, I mean almost a thousand dollars. It’s strange to have all that cash in transferred to your bank account when your used to your balance never being over a couple of hundred dollars, and knowing that you can not spend any of it on luxury items. It is all set aside for important bills, which I paid and I was no longer worried about losing my car, or anything else for that matter. The payday loan I received saved my job, and my car.
I had suddenly gotten enough to get back on my feet again. The process of getting my payday loan was really quite simple. I filled out the forms on the Internet and gave them all of the information they requested, including my bank account number and bank routing number. Very quickly I was informed my loan was approved and the money would be in my bank account within twenty four hours, and sure enough the money was tin my account the next morning. I did not have to beg a loan officer to ignore my bad credit, or convince someone that the reason I needed to borrow the money was for a good cause. There was absolutely no embarrassment on my part or judgments from the payday loan company. I did not even have to fax the payday loan company any documents, the whole process was just easy.
Several weeks after I got my loan, I paid it off. Since I paid the loan off on time the company let me know that I could get another loan with them without any problems if I needed it. I took the up on that offer several months later; I borrowed less money this time to make sure I had enough cash for my vacation. Payday Loans can be a powerful tool to help those in financial need, if used correctly.
Posted by admin on May 4th, 2010
Summary
Industrial Bank Co.,Ltd. (Industrial Bank) is a Chinese financial institution which is engaged in corporate, personal and institutional banking. The product portfolio of the company includes deposits, loans, credit cards, wealth management, corporate finance, international settlement, advisory services, financing express, liability business, fund management, sales of government bonds and financial bonds, services or agency service in trading of foreign currencies, provision of letters of credit and guarantee facilities and safe-box service. The company also provides online services including internet banking and telephone banking. Industrial Bank has operations at 40 branches in China.
Industrial Bank Co., Ltd. – Financial Analysis Review is an in-depth business, financial analysis of Industrial Bank Co., Ltd.. The report provides a comprehensive insight into the company, including business structure and operations, executive biographies and key competitors. The hallmark of the report is the detailed financial ratios of the company
Scope
- Provides key company information for business intelligence needs
The report contains critical company information – business structure and operations, the company history, major products and services, key competitors, key employees and executive biographies, different locations and important subsidiaries.
- The report provides detailed financial ratios for the past five years as well as interim ratios for the last four quarters.
- Financial ratios include profitability, margins and returns, liquidity and leverage, financial position and efficiency ratios.
Reasons to buy
- A quick “one-stop-shop” to understand the company.
- Enhance business/sales activities by understanding customers’ businesses better.
- Get detailed information and financial analysis on companies operating in your industry.
- Identify prospective partners and suppliers – with key data on their businesses and locations.
- Compare your company’s financial trends with those of your peers / competitors.
- Scout for potential acquisition targets, with detailed insight into the companies’ financial and operational performance.
For more information, please visit :
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Posted by admin on May 4th, 2010
If you financial emergency, you may be looking for a fast cash payday loan to help your situation. There are some important things to look into before you apply for a payday loan.
It’s a good idea to take some time to research payday loans first. Many people are in a rush to get a payday loan and sometimes forget some important issues that they should consider before hand.
With payday loans you can get approved in about an hour with easy online access and forms. After you give the payday loan company your information such as job history, checking information and your contact information you may be approved very quickly in most cases. This is why it is important to take just a little time to look into what the APR, fees, and terms will be with a payday loan company.
Many payday loan companies can electronically deposit the cash you need right into your checking account within a day. Instead of having to wait days for a check to arrive in the mail, you can take care of your financial emergency quickly. This is the whole point of a payday loan. Most payday loans are for under $1,500 and are approved very fast.
The fee for most payday loans are about $15 to $30 for every $100 borrowed. This may not look like much at first but interest can add up over time quickly. This is why it is a good idea to pay back your payday loan within two weeks or less. This is what these type of loans are intended for, fast cash for short term financial situations. If you need cash for a long period of time, you should look into other types of loans that are available for your situation.
Online Payday Loans – How To Get A Fast Cash Loan Using The Internet
With online payday loans, you can get the cash you need for an emergency very quickly. You can get an approval, sometimes within an hour or two, without a financial credit check. Online payday loans are easy with simple online forms that are provided from these types of websites.
Always take time to look into the online payday loan services to make sure they are registered with the Better Business Bureau. You don’t want to get scammed.
Take some time out to compare the interest rates, fees and options that are available to you from the many online payday loan services.
Try to remember that the idea of a payday loan is to pay back the loan by your next payday. If you are in serious financial trouble, an online payday loan may not be a wise decision. With some time spent on educating yourself, you should have all the information you need to make a well informed financial decision.
Dean Shainin offers free payday loan quotes. For more information, articles, news, tools and valuable resources on fast cash payday loans, visit this site: Payday Loans
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Posted by admin on May 3rd, 2010
Summary
Seylan Bank PLC (Seylan Bank) is a commercial bank engages in providing financial products and services. The bank offers various kinds of savings accounts, current accounts, foreign currency services, deposits and investments, Seylan cards, loan facilities, leasing, E-commerce and personal financial planning services. The bank also offers various private banking, trade finance, remittances, offshore banking, asia express exchange, development banking, pawning services and palm top banking Seylan Bank PLC was formerly known as Seylan Bank Ltd. Seylan Bank is the principal partner for Ceylinco FastCash. Seylan Bank has three subsidiaries and four sub- subsidiaries companies.
Seylan Bank PLC – Financial Analysis Review is an in-depth business, financial analysis of Seylan Bank PLC. The report provides a comprehensive insight into the company, including business structure and operations, executive biographies and key competitors. The hallmark of the report is the detailed financial ratios of the company
Scope
– Provides key company information for business intelligence needs
The report contains critical company information – business structure and operations, the company history, major products and services, key competitors, key employees and executive biographies, different locations and important subsidiaries.
– The report provides detailed financial ratios for the past five years as well as interim ratios for the last four quarters.
– Financial ratios include profitability, margins and returns, liquidity and leverage, financial position and efficiency ratios.
Table Of Contents 2
List of Tables 2
List of Figures 2
Seylan Bank PLC – Key Facts 3
Seylan Bank PLC – Business Description 3
Seylan Bank PLC – Major Products and Services 4
Seylan Bank PLC – History 5
Seylan Bank PLC – Key Competitors 6
Seylan Bank PLC – Key Employees 6
Seylan Bank PLC – Key Employee Biographies 7
Seylan Bank PLC – Company Statement 7
Seylan Bank PLC – Locations And Subsidiaries 8
Head Office 8
Other Locations & Subsidiaries 8
Seylan Bank PLC – Financial Ratios 9
Financial Ratios – Capital Market Ratios 9
Financial Ratios – Annual Ratios 9
Financial Ratios – Interim Ratios 9
Financial Ratios – Ratio Charts 10
Appendix 11
Methodology 11
Ratio Definitions 11
About Global Markets Direct 14
Contact Us 14
Disclaimer 14
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