Financial Performance
A financial plan should be made to evaluate a company’s financial performance. Financial planning per businesdictionary.com states “Long-term profit planning aimed at generating greater return on assets, growth in market share, and at solving foreseeable problems.” It depends if the company is a monopolistic then quantity to be supplied depends on profit maximization. Meaning that the company will make the product to maximize the company’s profit. A company under monopolistic has some control over the cost of the products. Generally, in this situation, there is competition between companies which allows companies to reduce the cost of the product to attract new customers from the competition. A company’s cash in the
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By controlling expenses will allow your company to compete in the short and long run. Ways of cutting expenses can be cost of buildings, transportation, raw material, labor and etc. For an example, instead of renting a building try to own the building. Transportation expenses could be cheaper by using your own fleet or pay another cost effective provider. Raw materials go back to the drawing board. Some companies in the dairy industry understand the best way to cut cost is to own the entire process from the farm to the cow, to the dairy processor, to the food processor then to the customer. By doing this type of process will allow you to monitor all cost and cut out any middle man. Another perk by doing this process will allow you to control the quality of your products more effective since you know from the start to the finished product. Labor management can be handled many ways. Some companies will use lower costs labor to do the work. Other companies will try to give the laborer better pay but expect more production out of them.
Increase margins is a good method when you have a great product and also able to compete against your competition. This strategy can be good when used correctly. But on the other hand can be bad when you become the costliest provider in the industry. Then you will lose your customers and any chances for future customers. This strategy is a trial and error but is also good to use when there are not many competitors in the market that have the same products. But in this case, everyone is a little same so you would have to create new products lines that no one
Cost management plays a major role when maintaining profit margins. Management must be able to find in which areas of a business costs must be reduced and the consequences that such reductions have in the overall company. In some situations management must change the way the work is being done in order to decrease costs while in other cases changing one supplier for another might be enough, in both situations a tradeoff will occur and the consequences will impact the company as a whole.
S-Corporations An S-Corporation or S Corp is formed by an IRS tax election. IRS Code sections 1361 through 1379. When a S Corp is formed, it must first have a charter in the state where the headquarters of the S Corp is located. The approach that an S Corp is taxed is different from other business organizations that have been examined previously, because profits and losses can carry over to your personal tax return. This happens because the S Corp itself is not taxed, however the investors are taxed.
The balance sheet provides a snapshot of a firm’s financial position at a specific point in time, by using the company’s Asset and Debit Equity.
WH Smith publicly limited company (plc) is one of based British retailer which experience in Travel and High Street. Its operates a chain of retail shops selling books, magazines, newspaper and some small range of entertainment products for people in high street, railway station, airport, motorway service station and hospital. It has seen the chain is effectively spread UK-wide in recent years.
In 1984, Mansueto founded Morningstar Inc., which provides independent investment research to individuals, financial advisors, and institutional advisors(Ferrell, Ferrell, & Hirt, 2015). Although they provide these services to financial and institutional advisors, their main focus is on individual investors. Mansueto found that the average investor often finds investing very confusing because there are a wide variety of investment choices. There are three types of investment choices: mutual funds, stocks, and bonds. Each of these three types of investment have thousands of options for investors to choose. A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term
From smart grids that help utilities manage the demands of electricity to Flex efficiency Combined Cycle power, and gas engines that run organic waste, its technology helps deliver a quarter of the globe’s electricity. Its gas and Oil is currently operating in and working in about 120 countries and is known to also be the most innovative, reliable, and cost effective in the field. (GE,2018).
When people look to invest in a company it is important to understand the financial health of a company. The reason the financial health of a company is important to see how risky investing in that company would be. When a company is making billions in sales this does not always indicate they are better than a company making millions in sales. Simply using the amount of sales a company does is not enough to determine the financial health of a company. The financial ratios help determine the financial health of a company.
Organizations that have high free cash flow, creditors are willing to invest in these companies since these companies have powerful tools for debt repayment and they clearly have greater financial flexibility. On the other hand, cash enables managers to develop growth opportunities and development programs that will lead to an increase in company 's value. The free cash flow theory was first introduced by Jensen (1986), he stated that “Free cash flow as cash flow left after the firm has invested in all available positive NPV projects”.
What do you think is the most important life blood of a business? Is it profit, sales growth, or customer loyalty? While these are several important arteries of blood flow for a business to survive, they are not the heart which keeps the business alive. You can have all three and still go out of business if you do not have the one thing all companies need to live; which is cash! It takes cash to pay your employees, turn the lights on, open the door, and keep it open.
Barclays is a major global financial services provider operating in Europe, Asia, the Americas and Africa. It moves, lends, invests and protects money for people worldwide. Barclays is present in over 50 countries and employs over 140,000 people.
This paper discusses the how the finance function will drive business excellence in a global environment with emerging challenges in the areas of regulation technology, risk, globalization, talent capability.
Evaluation of the Financial Performance of a Chemical Company The Lee Chew Cheng Wong Chemical Company produces high quality speciality chemicals, and it exports around 85% of its output to many countries and regions. Since the establishment in the mid 1980 this company has emphasized the shareholder value. To keep this focus, a new Chief Executive Lee Shan Loke Teo has proposed a lot of new policies. This assignment evaluates the financial rations with Sun See Chemical Company and average industry, and presents the financial effect of the proposal that Lee Shan Loke Teo adopts. That final section shows the recommendation of costing system and capital expenditure budget.
In order to perform at the highest level, an employee must be motivated and have a strong combination of declarative and procedural knowledge. If an employee significantly lacks any of these performance determinants, the manager must address the issue through the most appropriate performance management approach. In the case presented, Heather’s declarative knowledge has been clearly presented. However, her ability to interact successfully with students both during and after class may indicate a lack of procedural knowledge and the possibility of a motivation problem. With the right behavior approach to performance measurement, Heather’s manager could capitalize on her strong declarative knowledge,
ABC LTD COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012 NOTE 2012 Revenue 2 828,500 Cost of sales 3 (460,000) Gross profit 368,500 Other income 4 2,500 Operating expenses 5 361000 Profit before income tax 10000 Income tax expense (30%) 3,000 Profit for the year 7000 Other comprehensive income change in revaulation surplus 38500 Other comprehensive income for the year, net of tax 38500 Total comprehensive income for the year 45500 ABC LTD STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2012 NOTES 2012 ASSETS Current assets Cash and cash equivalents 6 100500 Trade and other receivables 7 45,200 Inventories 8 87700 Other current assets 9 7000
3. The factors that affect the cost management are competition, growth in the same industry as the company, and improvements in manufacturing technology.