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Sample Research Paper Essay The world is moving on. Everything has changed and will still continue to change. One of the major contributors of these changes is the unending discovery of new advances such as tools and information technologies worldwide, from conventional Information System (IS) to computer-based IS, even become web-based IS. These advancements have been widely absorbed to improve efficiency of the organization’s operation and effectiveness in providing service to its employees and customers for them to survive in the realm of business world. Organizations such as universities have increasingly adopted advanced technologies to automate their information systems. It includes tools that are used to create, retrieve, store, change and transmit information. Online services have been offered by universities to provide information and applications for various stakeholders such as students, parents, benefactors and school personnel in timely manner and with greater ease (Lee Kim, 2010). The Southern Leyte State University- San Juan spent considerable resources and efforts in applying computer-based information system in some transactions in school. The university has a computer-based system for accounting, enrolment and grading. Students, parents and benefactors ask for grades, schedule, statement of 2 account and other relevant information. Though the computerization automates the abovementioned processes but some of the students claimed that sometimes the releasing of requested information took hours or even days for some operations like retrieval of data since it is still done semi-automatically or manually. Aside from that, the university also collects a processing fee for grade inquiry. Truly, indeed, there is a call for improving student’s information system such as in students academic performance monitoring and billing system to satisfy the information needs of the clients. One of the responsibilities of the university is to inform the parents and/or sponsors about the academic performance of the students and it is usually done by sending grades through the post office. The problem is some of the parents and/or sponsors will not be able to receive the grades in timely manner or will never reach their hands. For any reason and maybe to facilitate decision making purposes, some of the parents and/or sponsors will personally visit the University Registrar to follow up the student’s performance. Undeniably, it is a burden to the parents to do such. That is why it is necessary for the university to find ways to aid the personnel in the Registrar’s Office in handling the student’s permanent record and to deliver accurate data pertinent to some clients. The academic performance of the university scholars has been also monitored by the school. The scholar’s grade is evaluated manually by the Guidance Counselor every semester if it still meets the qualification standards. Also, reports are to be generated for recognized private sponsors and for institutional purposes. During evaluation, the Guidance Counselor will require the scholars to submit their grades and so the students will also collect their grades from their instructors or at the registrar’s office. The thought of accessing data directly from the centralized database will speed up the evaluation process. The plus factor for university’s financial growth is how committed the sponsor an d the parents pay the fees of the students. But in the present situation, paying bills on time can never be realized for the university fails to issue statement of account to the students every after payment is made. As a result, parents or sponsors are not updated of their dues and no assurance that the students pay the fees religiously. Though the students are required to pay before midterm and final, the parents or sponsors have no idea how much are they going to pay for each term. As part of the university, it is the earnest desire of the researcher to contribute something to address the problems encountered by the clients of the university with regard to academic performance monitoring and generating of an updated statement of account. Since the problem concerns the delivery of information such as updated report of grades and billing statements to the parents and/or sponsor of the students in the university, the researcher found it helpful to have a Web-based Student Information System. The availability of Internet Service Providers such as Smart and Globe Broadband in Southern Leyte will make the designed system more accessible to the clients especially those students who are from other towns which constitute 66 percent of the total population at SLSU-San Juan. Aside from that, it will give the university personnel-in-charge in Grading, Scholarship, and Billing the capability to organize and present student information that suit the specific needs of the clients. Theoretical Background This study is based on the theory of Shelly et al (2005) which states that webbased systems are popular because they offer ease of access, cost effectiveness and worldwide connectivity, all of which are vital to companies that must compete in a global economy. Both personal and organizational processes influence a culture of innovation. In a culture of innovation, people will have a habit of constantly looking for ways to improve things (Denning, 2004). Continuous search for innovative ways has been made to cater the need of the people to access and share information resources worldwide. As what Newell and Turner (2006) said, Innovation means change: sometimes radical change and sometimes incremental change. This incremental change refers to the movement of change from traditional IS to computer-based IS and even now to the recent trend which is the web-based IS that runs through an internet technology. The explosive growth of the Internet is making available radical new means of communication that affect such diverse areas as business, entertainment and education. Network technology supports distributed systems and until today, the most popular system that is currently being used to make such systems possible is the World Wide Web and they even claim that this web technology is â€Å"fundamentally a new medium of human communications† (cited in Carstensen Vogelsang, 2001). True enough that in areas of education, Internet offers a medium that has the potential to be more responsive to students, to encourage greater participation in their own learning, and to give greater access to different sources of information than what traditional methods can offer (Brooks, 1997). The anchor theory is also supported by Young (1999) who argue that the Internet is the most cost-efficient medium for business-to-consumer dealings (cited in Voiculescu, 2005). Beller and Or (2003) also added that the decreasing costs of internet services, coupled with availability and convenience are likely to accelerate adoption of internet-based technologies. According to Shelly et al. (2005), Internet is a worldwide network that integrates many thousands of other networks, which in turn link millions of government, business, educational and personal users around the globe. Levine (2003) also added that internet technologies can reduce the time burden and provide easy-to-use and helpful information to the end user. These features of internet technology are vital to any organization for them to be globally competitive. Chae and Poole (cited in Brown Cooke, 2005) discussed that requirements and accountability have become more stringent and require better reporting for higher education. Additionally, mechanisms for evaluation and reporting have a growing role in university management. Traditionally, information sharing among university members has relied on a range of printed materials. Computer technology created opportunities on university campuses for sharing data and information among the staff and the students, and has been deployed since the late fifties (cited in Semiawan and Middleton, 1999). These information systems range from library systems, registration systems and financial systems, to campus-housing systems and other university service systems. Student Information System incurs such application software designed for educational establishments to manage student data. It is an application that keeps track of student records such as name, address, teacher, classes, grades and other pertinent information. Once the information is inputted into the database, it will provide the ability to quickly get information related to a particular student and print out their vital records (Freewareseek, 2009). As cited in Ngoma (2009), Barrett also encapsulates the essence of a student management information system (SMIS). He defines SMIS as â€Å"an integrated software package that maintains, supports, and provides inquiry, analysis, and communication tools that organize student accountability data into information to support the educational process†. From this so called student information system (SIS), the idea of developing a student information system specifically in academic performance monitoring and generating of statement of account for SLSU- San Juan was conceived. Student Information System development moved from mainframes to a network or workstation environment and the tools has also been changed from the traditional IS platforms to tools with support such as Gopher, World Wide Web and multimedia systems. Because of these developments, methods and procedures by which users obtain information are changing rapidly. Daily, hundreds of thousands of individuals use the Internet and Web browsers to obtain a much broader range of information than has previously been possible. According to Kitchens (cited in Brown Cooke, 2005), web-based student information systems have been widely adopted by institution to facilitate a range of operations such as grading, attendance, demographic data and reporting. Advantages of such a system is that information is accessible anywhere by using a standard internet browser; instructional management such as tracking student performance and monitoring progress can be handled through the online tool; teachers can define each assessment used in their courses and; the system makes individual student data available. A centralized web based system also enables educators to collect, analyze and communicate student information through desktop computers, however good databases also require data integrity so the information is consistent and valid. Many schools have online systems for managing classes, requesting financial aid, and performing other routine tasks. In these institutions, people can access school grades online once they enter the dashboard area where they manage other schoolrelated tasks, and the dashboard is accessed with a username and password. These types of systems can be very useful for parents who may want to keep a close watch on the progress of their children, and for students who want to keep an eye on their grades. The advantage of viewing school grades online is that it is usually possible to do so as soon as grades are received and posted. By viewing grades immediately, people dont have to wait for weeks while report cards are generated and mailed, which can relieve stress and tension. There may also be other reasons for wanting to see grades online, like wanting to check midterm grades to monitor progress in a class, or needing to know grades for the purpose of reporting them to colleges as quickly as possible. (Smith, 2008). Academic performance refers to how students deal with their studies and how they cope with or accomplish different tasks given to them by their teachers. The indicator of how well the students perform in the class is the student grades. Grade availability and immediate distribution through the use of SIS, which is called by Knievel (2001) as â€Å"full disclosure†, is of importance to concerned party mostly to the students and parents. Liao et al. (2007) asserts that SIS process within such technological sophistication does create precise knowledge edge, that such SIS application can be appealing to students and to the academic faculty as well as the parents. Student data acquired is usually used for effective decision making purposes. It is also an enduring belief in the academy that knowing one’s grade will change student’s negative behaviors or sustain positive ones (Knievel, 2001). Specifically, web-based student information systems have helped improve student records management, and school improvement plans. According to The Journal (2000), â€Å"Administrators no longer need to run from classroom to classroom or search from file to file to get the information they need, as the system (PowerSchool) provides instant access to all student records with a simple point and click†. SchoolWorks (2009) student information systems enable complete tracking and management of student data. The complete student information system includes student activities, daily attendance, period or classroom attendance, discipline, health and immunizations, grades, schedules, and more! SchoolWorks student information system manages your student data with a browser-based user interface. This allows platform independent student data entry. SchoolWorks student information system includes standard reports and allows custom report creation. The data structure is easily customized to match your state board of educations requirements for electronic submission of student data. At Westside Community Schools in Nebraska, Bird (2006) argues that there were significant improvements as a direct result of the adoption of the new SIS. â€Å"Since the implementation of the SIS, attendance at Westside is better than ever, discipline reports are down, and, instead of declining test scores that are common in schools with similar demographics, test scores are consistently above the national average and among the highest in the state of Nebraska. School administrators attribute this in good part to the SIS†. Bernhardt (2005) analyzed student demographic and perceptual data of elementary, middle, and high schools of Canyon View School District (an 8,000 student district) and concluded that fact-driven decision making can provide each district, each school, each class and each student with a reliable way to facilitate breakthrough performance and continuous education improvement. Her findings revealed that effective use of school data leads to more objective education-enhancement decisions. In North Carolina, a vast number of school teachers, administrators, leaders, parents, and students are using NCWISE to access and manage student data. NCWISE is described as a web-based, integrated, and secure tool for effectively managing student information and improving instruction in North Carolina schools. It was designed to provide teachers, principals, counselors, nurses, central office staff, and others with direct and immediate access to a full spectrum of data on a students entire career in the North Carolina school system. (Ngoma, 2009) As cited in Ngoma (2009), North Carolina Department of Public Instruction (NCPDI) report lists some of the features of NCWISE which include â€Å"the ability to move student transcripts immediately when a student transfers from one school to another; produce progress reports and report cards; share student grades and emergency information with appropriate school employees; and more quickly and accurately report student grades, attendance, and information used to support public school business processes†. The reason given for the adoption of NCWISE is that SIMS, which was the official public schools data collection source for more than 20 years and relied on antiquated technology. Let it be noted that NCWISE replaced SIMS. De La Salle University (DLSU), Manila created a My.LaSalle (MLS) university portal to extend efficient services to its clientele. Students can enroll online, thus, no more lining up at the Registrars Office. They can enroll anywhere within their scheduled period, in their preferred course and section, provided it is still open. Students can always view the actual enrollment count per course and section. Students can also inquire through the portal, information about course schedule, account balance, grades for the term, schedules of final exams and course card distribution. However, transactions could be denied due to unsettled accountabilities such as payables in the accounting or registrar’s offices, or library dues. These records will be reflected in a student’s personal account and they are updated as frequently as needed. On the other hand, faculty members can submit final grades and request for change of grade online even in the comforts of their own homes. (DLSU, 2010) University of the East, Ramon Magsaysay Memorial Medical Center, Inc., Manila developed a UERM portal for their students and employees. The portal contains Faculty Portal and Student Portal. Faculty Portal is an exclusive gateway for UERM faculty members for online information, faculty evaluation, faculty load, uploading lectures, quizzes and other materials for dissemination to their classes. It also provides access to profound discussions among faculty about lesson and other topics for the creation of knowledge. The Student Portal is for online student information, lectures, discussions, resources and other services exclusive to UERM students. It aims to enhance and extend the students learning experience through information technology beyond the bound of the classroom. (UERMMMC, 2010) The University of Baguio (UB) E-Reservation System is an extended feature of the UB enrollment System wherein transactions are done via the internet. The student is allowed to reserve schedules and be evaluated by the college dean. Grades are available for viewing online using UB-Online Information Service. Final grades for a given term may be viewed in a Final Grade Report or in an Unofficial Academic Transcript (UB, 2010). All business transactions revolve around one thing- payments. Many ecommerce websites integrate all the possible payment gateway modes for customers choice so that payments never get delayed. Through technologies the organization business operations have become easier and fast. Billing is the process of sending bills for payment (Macmillan English Dictionary, 2010). The term E-billing is the electronic delivery of financial documents to the customer, that represents and replaces the conventional paper based document (Email connection, 2001). Universities adopt this so called on-line billing for its perceived advantages than traditional billing system. Southerns eBill offers both students and parents a number of advantages over traditional paper bills, including: students can authorize others (parents, spouse, etc.) to view and pay bills; easy to read online history of past statements and payments; ability to schedule future payments; ease of use and convenience (Southern Connecticut State University, 2009). The Students Accounts Office at Macalester College implemented a new billing process. This change in process has taken place for several reasons. One reason and advantage of the change in process is that students and authorized users may view information relating to billing accounts, statements, and account activity at their convenience. The change in process correlates directly with the leadership role Macalester College has taken in sustainability for higher education. This change also will not only save paper by not having to print statements but will also reduce the need for other paper products such as two forms of envelopes. For students monthly billing, the student and authorized users will receive email notification announcing that the newest electronic eBill statement is ready to view. All students and authorized users must go online to view the statements. If a paper statement is required, the student or authorized user must print it at their convenience (Macalester College, 2009) In San Diego State University, they used a billing system wherein student billing statements are sent out on a monthly basis when money is due to the University. Student statements will be delivered in electronic format. Students are sent an email directing them to a secure website to review their bill, so it is important that their email address be kept up to date in their Portal account. Another feature is that the student may set up a parent PIN so that in addition to the student receiving the email, the parent may also receive an email (San Diego State University, 2009). Another motivation for online technologies as emphasized by Kemelgor, Johnson and Srinivasan (2000) is that â€Å"to attract good students, educational institutions must continue to innovate.† Technology is a tool recognized by many institutions that can be utilized to improve levels of service while aiming to personalize and extend the relationship with students (as cited in Savarese, 2004). Therefore effective student systems need to be student oriented and designed so administrative requirements don’t negatively impact on the student. It is in the light of these theories and related literature that inspired the researcher to develop web-based student information system specifically on student performance monitoring and generating statement of account in Southern Leyte State University-San Juan to keep pace with the above-mentioned innovations and of course to be able to cater the information needs of the stakeholders. 14 THE PROBLEM Statement of the Problem This study aimed to analyze, design and develop a prototype Web-Based Student Information System for Southern Leyte State University- San Juan, Southern Leyte. Specifically, it sought to: 1. analyze the services provided by the university as they relate to 1.1 1.2 student academic performance monitoring and; generating statement of account; 2. determine the status of the present student information system in terms of 2.1 2.2 2.3 2.4 relevance; accessibility; reliability and; timeliness; 3. identify the problems encountered by the students, parents, benefactors and personnel-in-charge in the present student information system; 4. determine the features of a good Student Information System; and 5. design and develop a prototype of a Web-Based Student Information System. Significance of the Study The results of the study would benefit the following entities: Commission on Higher Education (CHED). This study will help CHED, as a governing body to all education institutions, to encourage colleges and universities to implement research and development for the purpose of delivering quality service to each of its clients. SLSU. This study would enable the university to improve their student information system. It will give them the opportunity to give quality service to their clients. Students. The developed system would benefit the students for they can inquire their information needs with regard to their academic performance and billing statements at their convenient time and place. Parents. The output of this study would allow the parents to monitor the academic status and billing account of their child by accessing the records through the internet. Benefactors. The student information such as grades and statement of account that is extracted from the system would facilitate the sponsors for their decision making purposes. Also, they would be guided constantly with their bills. Student Affairs Office. The output of this study would significantly give ease to the Guidance Counselor in performing his tasks especially in monitoring, record keeping and generating reports. Registrar’s Office. Through the system, the work of the personnel in the Registrar’s office in disseminating grades to the students will be lessened for the records are now available online. Accounting Office. The staff in Accounting Office will not be disrupted with students who constantly inquire their statement of account. This study would give an opportunity for the researcher to gain more knowledge in programming and enhance his/her skill in designing and solving analytical problems. Aside from that he/she will gain confidence from her experiences in the making of this research. Future Researchers. The future researchers would greatly benefit from this study for the findings of this study would encourage them to design an improved system. Other HEI’s. The output of this provides insights to other higher education on how to disseminate information to their clients in a better way. This study may also assist them in achieving successful outcomes in similar projects. RESEARCH METHODOLOGY The study will utilize the descriptive research method using a researcherconstructed questionnaire to gather data from various stakeholders such as students, parents, benefactors and some personnel in charge in Scholarship, Registrar, and Accounting at SLSU- San Juan. The questionnaire simply asked the respondents to examine the current information system in the university and suggest some good features of a good student information system. The data that will be collected from identified respondents will be presented, analyzed and interpreted. The results and findings of the research study will serve as the basis for the design and development of the Web-based Information System for SLSU- San Juan.

An Analysis Of Why Jimmy Doyle Will Never Succeed In Life Due To His F :: essays research papers

An Analysis of Why Jimmy Doyle Will Never Succeed in Life Due to His Father In "After The Race", by James Joyce in the book "Dubliners", the main character, Jimmy Doyle will be an unproductive citizen, fooling around with his friends and living off of his father's money for the rest of his life. In this short story he demonstrated that he doesn't realize the value of money, because he has never had to work for it, hence he is too frivolous with it at times. Jimmy also likes to be with his friends and to not work hard at what he does. Jimmy has no work ethic because his father had a lot of money, in fact he is referred to as a "merchant prince" in Dublin due to his success as a butcher, and his father did not want Jimmy to work for what he has, but would rather see his son become popular and make a lot of connections. Jimmy's father is the reason he will never succeed in life on his own. Jimmy Doyle grew in a family that was quite well off financially due to the hard work of his father. Mr. Doyle made a lot of money through hard work and sacrifice as butcher, and he wanted nothing but the best for his son. He did not want his son to work as hard as he did growing up. When Jimmy went away to college, he spent more time socializing than he did studying. "Jimmy did not study very earnestly and took to bad courses for awhile. He had money and he was popular; ..."(p.25). Jimmy liked better to be in the company of peers rather than study, and his father condoned it. When Jimmy was not doing well at Dublin University, his father let him go off to Cambridge where he could "see life a little". While there he seemed to run the bills a little high, and his father took care of all the expenses because he wanted to show off the money that he had acquired. The way Jimmy's dad just gave him money and only wanted Jimmy to meet people who were "worth knowing" corrupted Jimmy's work ethic and his behavior in the book clearly demonstrates this. Jimmy Doyle has no work ethic and is just happy to be with his friends accomplishing nothing. Jimmy loves having acquaintances and meeting people. He was very proud coming through his home town after the big race and being seen in the car with such people that he was with; Charles, an heir to a hotel empire

Deutsche Brauerei

QUESTION FOR REPORT/ DISCUSSION 2. What are the characteristics of Fund flow statement and its uses? What do the financial forecast and sources and uses of funds statement of company tell us? Discuss about breakeven analysis. What does the breakeven chart of the company tell us? [pic] Fund Flow Statement Financial statements mainly include profit and loss account and balance sheet. Profit and loss account lists out all the expenses made by the firm and revenue earned over a period of time. Balance sheet depicts the financial position of the firm at a particular point of time. While fund flow statement is complimentary to both balance sheet and profit and loss account, it brings a clear idea about the movement of funds in and out of the firm, during a particular period of time. Meaning of Fund Flow The financial statement of the business indicates assets, liabilities and capital on a  particular date and also the profit or loss during a period. But it is possible that there is enough profit in the business and the financial position is also good and still there may be deficiency of cash or of working capital in business. If the management wants to find out as to where the cash is being utilized, financial statement cannot help. Therefore, a statement is prepared of the sources and applications of funds from where Working Capital comes and it is utilized. This is called Fund Flow statement. Meaning of ‘Fund’ In a popular and generally accepted sense the term ‘fund’ is used to denote the excess of current assets over current liabilities : Working Capital  Ã‚  Ã‚  Ã‚   =  Ã‚  Ã‚   Current Assets – Current Liabilities Meaning of ‘Flow’ of Fund Flow of funds means transmigration (coming and going) of funds. In other words, Flow of funds means change in Working capital, as in funds flow statement the words ‘funds’ mean net working capital. Hence Coleman rightly states that, â€Å"The fund statement is statement summarizing the significant financial changes which have occurred between the beginning and the end of a company’s accounting period. † The flow of fund if is represented by changes in working capital, then it can happen, only if a transaction involves changes on both current item and noncurrent item. Every transaction has double entry. Various cases can be that transaction involves Change on current assets and on fixed assets (cash purchase of fixed assets) o Cash being current item and fixed assets are non current ? Change on current assets and on current assets (credit sale of inventory) o Debtors is a current item and inventory is also current in nature ? Change on current assets and change on current liabilities (payment made to creditors) o Cash is current asset and creditor, current liability ? Change on current liabilities and change on current liabilities (short term loan taken to clear overdraft) ? Change on fixed assets and on fixed liabilities (sale of investments to redeem debentures) So, amongst all these combinations, transactions which involve change, on one hand on current item and on other hand on non current item, they would only lead to fund flow. E. g. * Sell investments in cash. * Issue of shares * Raising long term loans, etc. Thus fund flow statement enumerates various sources from which funds come in organization and various applications which lead to usage of funds. It is an important tool to check the efficiency of management in the firm. It can make future projections about working capital requirements and thus firm can arrange for those requirements and can allocate funds in a more efficient manner. Preparation of fund flow statement involves preparation of adjusted profit and loss account which is prepared by excluding the non fund and non operating items from the initial figure of net profit. Different Names of Fund-flow Statement * A Funds Statement * A statement of sources and uses of fund * A statement of sources and application of fund * Where got and where gone statement * Inflow and outflow of fund statement Objectives of Fund Flow Statement The main purposes of Fund Flow Statement are: 1. To help to understand the changes in assets and asset sources which are not readily evident in the income statement or financial statement. 2. To inform as to how the cans to the business have been used. 3. To point out the financial strengths and weaknesses of the business How to Prepare a Fund Flow Statement Fund flow statements are prepared by taking the balance sheets for two dates representing the coverage period. The increases and decreases must then be calculated for each item. Finally, the changes are classified under four categories: (1) Long-term sources, (2) long-term uses, (3) short-term sources, (4) short-term uses. It is also important to zero out the non-fund based adjustments in order to capture only the changes that are accompanies by flow of funds. However, income accrued but received and expenses incurred but not received reckoned in the profit and loss statement should not be excluded from the profit figure for the fund flow statement. Fund flow statements can be used to identify a variety of problems in the way a company operates. For example, companies that are using short-term money to finance long-term investments may run into liquidity problems in the future. Meanwhile, a company that is using long-term money to finance short-term investments may not be efficiently utilizing its capital. Steps in Preparation of Fund Flow Statement: 1) Preparation of schedule changes in working capital (taking current items only). 2) Preparation of adjusted profit and loss account (to know fund from [or] fund lost in operations). 3) Preparation of accounts for non-current items (Ascertain the hidden information). 4) Preparation of the fund flow statement. Importance of funds flow statement: Funds flow statement is an important analytical tool for external as well as internal uses of financial statements. The users of funds flow statement can be listed as under: 1. Managements of various companies are able to review cash budgets with the aid of funds flow statements. They are extensively used by the management in the evaluation of alternative finance & investments. In the evaluation of alternative finance & investment plans, funds flow statement helps the management in the assessment of long-range forecasts of cash requirements & availability of liquid resources. The management can judge the quality of management decisions. 2. Investors are able to measure as how the company has utilized the funds supplied by them & its financial strength with the aid of funds statements. They gauge can the company capacity to generate funds from operations. On the basis of comparative study of the past with the present, investors can locate & identify possible drains on funds in the near future. 3. Funds statement serve as effective tools to the management for economic analysis as it supplies additional information, which cannot be provided by financial statements, based on historical data. . Fund statement explains the relationship between changes in working capital & net profits. Funds statement clearly shows the quantum of funds generated from operations. 5. Funds statement helps in the planning process of a company. They are useful in assessing the resources available and the manner of utilization of resources. 6. Funds statement explains the financial c onsequences of business activities. They provide explicit & clear awareness to questions regarding liquid & solvency positions of the company, distribution of dividend & whether the working capital has been effective or otherwise. 7. Management of companies can forecast in advance the requirements of additional capital & can plan its capital issue accordingly. 8. Fund statement provides clues to the creditors & financial institutions as to the ability of a company to use funds effectively in the best interest of the investors, creditors & the owners of the company. 9. Funds statement indicates the adequacy or inadequacy of working capital. 10. The information contained in fund flow statement is more reliable, dependable & consistent as it is prepared to include funds generated from operations & not net profit after depreciation. 11. Funds flow statement clearly indicate how profits have been invested, whether investments in fixed assets or inventories or ploughed back. Financial forecast: A financial forecast is normally an estimate of future financial outcomes for a company. Using historical internal accounting and sales data, in addition to external market and economic indicators, a financial forecast is an economist's best guess of what will happen to a company in financial terms over a given time period — which is usually one year. In this case, the company has forecasted its data for the years 2001 and 2002. Sources of funds 1. Net Income: Net income  is equal to the  income  that a firm has after subtracting costs and  expenses  from the total  revenue. Net  income can be distributed among holders of common stock as a  dividend  or held by the firm as  retained earnings. The items deducted will typically include  tax expense, financing expense (interest expense), and  minority interest. Net income is informally called the  bottom line  because it is typically found on the last line of a company's  income statement. [pic] The forecasted net income is increasing in the projected year. It has been projected that there would be an increase in the net income of 28% in 2001 and 17% in 2002. This can be credited to their expansion strategy in the coming years. There has been a dip in the net income in the year 1999 owning to the depreciation of Ukrainian currency by 125%. 2. Allowance for doubtful accounts: The allowance for doubtful accounts is a balance sheet account that reduces the reported amount of accounts receivable. Providing an allowance for doubtful accounts presents a more realistic picture of how much of the accounts receivable will be turning to cash. If a firm has made a sufficient provision in its allowance for doubtful accounts, reported earnings will not be penalized by bad debts when the bad debts occur. If uncollectible accounts are larger than expected, however, the firm will have to increase the size of the account and reduce reported income. [pic] There has been a sharp increase in allowance for doubtful accounts in the year 2001 which subsequently reduced. This can be linked to the increase in the credit they plan to give to the distributors owning to their expansion plans for the period and their recovery policy. The increase in doubtful accounts is a bad sign for the financial position for the company. 3. Depreciation: A  noncash expense  that reduces the  value  of an  asset as a  result  of  wear and tear, age, or  obsolescence. Most assets lose their value over time (in other  words, they depreciate), and must be replaced once the end of their useful life  is reached. Because it is a  non-cash expense, depreciation lowers the  company's  reported  earnings  while increasing  free cash flow. Calculated by two methods: 1. Straight Line Depreciation Method 2. Declining Balance Depreciation Method [pic] There has been gradual rise in the depreciation in the projected years. This can be related to increase in their number of assets (they are planning to buy more equipments and properties) which would lead to devaluation eventually. 4. Short-Term Debt: The account which comprises of any debt incurred by a company that is due within one year. The debt in this account is usually made up of short-term bank loans taken out by a company. The value of this account is very important when determining  a company's  financial health. If the account is larger than the company's  cash and cash equivalents, this suggests that the company  may be  in poor financial health and does not have  enough cash to pay off its short-term debts. Although  short-term debts are due within a year, there may be a portion of the long-term debt included in this account. This portion pertains to payments that must be made on  any long-term debt throughout the year. [pic] In initial years they heavily depended on short term debts. Over the years the financial health of the company improved which lead to the reduction in the debts. Owning to their credit policy and increase in investment in fixed assets, the company is not able to recover the money. This could have lead to increase in short term borrowings. 5. Accounts Payable: An accounting entry that represents an entity's obligation to pay  off a short-term debt to  its creditors. The accounts payable entry is found on a balance sheet under the heading current liabilities. Accounts payable are debts that must be paid off within a given period of time in order to avoid default. [pic] Increase in accounts payable shows that the company is making more purchases on credit. It could be due to taking more time to pay bills, buying more products on credit, paying higher prices for credit purchases. 6. Other Current Liabilities: A balance sheet entry used by companies to group together current liabilities that are not assigned to common liabilities such as debt obligations or accounts payable. Companies will group together these other current liabilities into one account on the balance sheet for the sake of simplicity. [pic] Since this category is made up of accruals and similar items, it increases as the company gets larger. It increased in 1999 owning to higher investment in Ukraine. The increase in the other current liabilities has been more or less stable in the projected years. 7. Total sources of cash: It is the sum total of all the components of sources of funds. [pic] Uses of Funds 8. Dividend Payments Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. [pic] There is a sharp increase in the dividend payment as the company is projecting a higher increase in their profits. The dividends are paid from the net income from the same year. Increase in dividend payments implies strong commitment to maintain higher level of dividends in the future. 9. Increases in cash balance Amount of available cash that a management decides to maintain in cash planning, to avoid or cover up cash shortfalls resulting from mismatch between cash inflows and outflows during an accounting period. [pic] The company is having optimum cash balance hence maintaining sufficient working capital. 10. & 11. Increases in accounts receivable Accounts receivable (A/R) is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer. In most business entities this is typically done by generating an invoice and mailing or electronically delivering it to the customer, who in turn must pay it within an established timeframe called credit or payment terms. [pic] In Germany, the company has maintained a tight hold on the credit that they supply to the distributors; thus there isn’t a significant change in the accounts receivable as compared to Ukraine. pic] Increases in accounts receivable (Ukraine) that is disproportionate to any growth in revenue may indicate the company is having trouble collecting money from its customers. Depending on the company's cash situation, this could require the company to borrow money to plug the hole from the unpaid money it is owed by its customers. Eventual ly, the company might need to write-off some of these accounts receivable as bad debt, in recognition of the fact that some customers might never pay. In extreme cases, the company might run out of cash and have to shut down. 12. Increases in inventories Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business. An organization's inventory can appear a mixed blessing, since it counts as an asset on the balance sheet, but it also ties up money that could serve for other purposes and requires additional expense for its protection. Inventory may also cause significant tax expenses, depending on particular countries' laws regarding depreciation of inventory. Inventory appears as a current asset on an organization's balance sheet because the organization can, in principle, turn it into cash by selling it. Some organizations hold larger inventories than their operations require in order inflating their apparent asset value and their perceived profitability. [pic] The fragile distribution system in Ukraine pre-2000 lead to increase in the inventories of the company as company is working on improving the distribution channel due to which the product flow has been projected to be smooth in coming years leading to decrease in inventory which is a healthy financial sign. 13. Increases in other assets Assets are economic resources owned by business or company. Two major asset classes are tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets. Current assets include inventory, while fixed assets include such items as buildings and equipment. Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. Examples of intangible assets are goodwill, copyrights, trademarks, patents and computer programs, and financial assets, including such items as accounts receivable, bonds and stocks. pic] There is a negative growth in the increase in the other assets because of the depreciation of other assets and they are not planning to acquire any new assets in near future. By 2002 they are planning to buy enough assets just to overcome the negative growth. 14. Reductions in long-term debt Long-term debts are loans and financial obligations that last for over one year. For example, debts obliga tions such as bonds and notes, which have maturities greater than one year, would be considered as long-term debts. pic] Reduction in long term debts from 1998 to 1999 could be due to overnight success of the company in Ukraine. The sound financial condition of the company has ensured the stable repayment of long term loans and would continue to do so in future. 15. Capital Expenditures Capital expenditures (CAPEX or capex) are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset ith a useful life that extends beyond the taxable year. Capex are used by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings. [pic] The sharp increase in the CAPEX can be explained by the inflow of capital through long term debts and the operating profit the company is planning to achieve in the projected period. 16. Total uses of cas h: It is the sum total of all the use components in the fund flow statement. [pic] Break Even Analysis The break-even point for a product is the point where total revenue received equals the total costs associated with the sale of the product (TR=TC). A break-even point is typically calculated in order for businesses to determine if it would be profitable to sell a proposed product, as opposed to attempting to modify an existing product instead so it can be made lucrative. Break even analysis can also be used to analyse the potential profitability of an expenditure in a sales-based business. Breakeven analysis is a management accounting tool used for profit planning of a firm. Profit planning is a function of the selling price of a unit of product, the variable cost of making and selling the product, the volume of product unit sold and in case of multi-product companies, sales mix and finally, the total fixed costs. Breakeven point (for output) = fixed cost / contribution per unit. Break-even analysis is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are â€Å"variable† (costs that change when the production output changes) and those that are â€Å"fixed† (costs not directly related to the volume of production). Total variable and fixed costs are compared with sales revenue in order to determine the  level of sales volume, sales value or production at which the business makes neither a profit nor a loss (the â€Å"break-even point†). Break even analysis depends on the following variables: 1. The fixed production costs for a product. 2. The variable production costs for a product. 3. The product's unit price. 4. The products expected unit sales. On the surface, break-even analysis is a tool to calculate at which sales volume the variable and fixed costs of producing your product will be recovered. Another way to look at it is that the break-even point is the point at which your product stops costing you money to produce and sell, and starts to generate a profit for your company. Break even analysis solves various managerial problems: †¢   Setting price levels: A price level is a hypothetical measure of overall prices for some set of goods and services, in a given region during a given interval, normalized relative to some base set. Hence with the help of BEP analysis a firm can determine the price level of product and particular sales volume which is necessary to produce an X amount of operating profit.   Targeting optimal variable/ fixed cost combinations †¢   Determining the financial attractiveness of different strategic options for your company. Break even Chart A breakeven chart is a strategic tool used to plot the financial revenue of a business unit against time or sales to determine the point when sales output is equal to revenue generated. This is reco gnised as the breakeven point. The information used to determine and analyse the breakeven point includes fixed, variable and total costs and the associated sales revenues. The analysis of a breakeven chart considers whether a venture runs at a profit or a loss. A sale above the breakeven point indicates continued and profitable growth. The principle of break-even theory is that during the early stages of a business venture, total costs, both fixed and variable, exceed sales. As output increases, sales begin to rise faster than costs and, eventually, they become equal (breakeven point). If sales continue to rise and exceed total costs, the business achieves profitability. The tool assumes that all the goods which are produced will be sold and that costs, namely the price, will remain constant. Likewise, it also relies on the capacity in terms of output to remain unchanged. Breakeven charts are universally applied to simply and graphically illustrate and forecast a company's projected revenue, and to calculate the time for profitability to be reached. It is used by financial and marketing strategists to predict the effect that changes in price will have on the percentage change in sales over time. It is also a useful tool to analyse the relationship between fixed and variable costs and to predict the effect on profitability of changes to those costs. Income Statements | | | | | | | |   |   |   |   |   |   |   | |Sales: Germany |62032 |62653 |64219 |66216 |68203 |70249 | |Sales: Ukraine |0 |4262 |17559 |25847 |37479 |48722 | |Total Net Sales |62032 |66915 |81778 |92063 |105682 |118971 | |Production Cost & Expenses |32258 |35366 |44271 49827 |61393 |71609 | |Excise duties |9143 |9108 |10486 |11557 |11625 |13087 | |Allowance for doubtful accounts |5 |7 |38 |24 |2 01 |60 | |Total Variable Cost |41406 |44481 |54795 |61408 |73219 |84756 | |   |   |   |   |   |   |   | |Administrative & Selling Expenses |12481 |13014 |16274 |18505 |18500 |18500 | |Depreciation |3609 |4314 |5844 |6068 |6766 |7448 | |Total Fixed Cost |16090 | | | | | | | | | | | | | | |(â‚ ¬ per hectoliters) | | | |Per unit Sales | |9206300/1173000 = | |78. 8508099 | | | |Per unit variable cost | | | | | |61408000/1173000 = | |52. 35123615 | | | |Contribution per unit | | | | | |Per unit Sales – Per unit variable cost = | |26. 3384484 | | | | | | |Breakeven Point = |Fixed cost/Contribution per unit | | | | | | | |24573000/26. 13384 = |940274. 633 | | | | | |Hence Number of units requires to be sold to reach breakeven point=940275 hectoliters | | | | | | | | | |Net Sale in year 2000 = 1173000 hectoliters | | |Revenue calculated from the sale of Breakeven volume sales = |breakeven point volume* per unit sale price |â‚ ¬ 73797559. 3 | | | | | |Total Variable cost at Breakeven Point = Breakeven volume * Per |940275 * 52. 32123615 = |â‚ ¬ 49224558. 57 | |unit variable cost | | | | | | | | Total Fixed Cost = â‚ ¬ 24573000 | | | | | | |Total cost of Production of Beer |Fixed cost + variable cost |â‚ ¬ 73797558. 57 | | | | | This analysis identifies the break-even volume, where revenues just equal total costs and Deutsche Brauerei recovers all its fixed cost at the break-even volume sale. Sales above Break-even Point will bring profits for the company. Margin of Safety (volume) = Total volume Sold – Breakeven volume 1173000 – 940275 = 232725 hectoliters Margin of Safety (Revenue) = per unit sale price * Margin of safety volume = 78. 48508099 * 232725 = â‚ ¬ 18265440. 47 Variable Cost for selling 232725 hectoliters = per unit variable cost * Margin of Safety (volume) = 52. 35123615 * 232725 = â‚ ¬ 12183441. 43 Deutsche Breuerei has already covered up fixed cost expense with break even volume sale hence they will make profit above the sale of break even volume. Net profit = Margin of Safety (Revenue) – Variable Cost for selling 232725 hectoliters = â‚ ¬ 18265440. 47 – â‚ ¬ 12183441. 43 = â‚ ¬ 6081999. 041 From the above analysis it is seen that as the volume increased above the break even volume, the profits rise disproportionately faster. The analysis of a breakeven chart shows that Deutsche Breuerei has to sell more than 940275 hectoliters of beer to start making the profit for the venture. A sale above the breakeven point indicates a continued and profitable growth, and venture makes a profit of â‚ ¬6081999. 041. Hence Deutsche Breuerei should stick to the current price level of beer and profit planning. Break even chart of Venture shows that if they can reduce the Production Cost in coming years through new facility and equipment they can increase the profits in long term. As the company is showing a healthy sales of good they can invest on production facility to reduce the per unit production cost and expenses to increases the overall profits. ———————– DEUTSCHE BRAUEREI Case Analysis- Question 2 MBA PHARM. TECH. (4th year) [pic] [pic] |ROLL NO. |NAME |ROLL NO. NAME | |38 |Devang Mehta |41 |Upasana Nagpal | |39 |Anand Menon |42 |Abhilash Nair | |40 |Manish Mishra |43 |Kadambari Narang | SCHOOL OF PHARMACY AND TECHNOLOGY MANGEMENT †0[pic]? 0[pic]? 0[pic]? 0[pic] 1[pic]†1[pic]x1[pic]|1[pic]? 1[pic]u1 [pic]2[pic]2[pic]2[pic]I2[pic]? 2[pic]N3[pic]l3[pic]A4[pic]A4[pic]? 4[pic]eOA »Ã‚ ­A »A »Ã¢â‚¬Å"| ­h ­Ã‚ »WI8A! h`fJh? *B*[pic]OJQJ^J[? ]ph333h? *B*[pic]CJOJQJph! hNu—h? *B*[pic]CJOJQJNet income =Revenue – Cost of goods sold – Sales discounts – Sales returns and allowances – Expenses – Minority interest – Preferred stock dividends Deutsche Brauerei QUESTION FOR REPORT/ DISCUSSION 2. What are the characteristics of Fund flow statement and its uses? What do the financial forecast and sources and uses of funds statement of company tell us? Discuss about breakeven analysis. What does the breakeven chart of the company tell us? [pic] Fund Flow Statement Financial statements mainly include profit and loss account and balance sheet. Profit and loss account lists out all the expenses made by the firm and revenue earned over a period of time. Balance sheet depicts the financial position of the firm at a particular point of time. While fund flow statement is complimentary to both balance sheet and profit and loss account, it brings a clear idea about the movement of funds in and out of the firm, during a particular period of time. Meaning of Fund Flow The financial statement of the business indicates assets, liabilities and capital on a  particular date and also the profit or loss during a period. But it is possible that there is enough profit in the business and the financial position is also good and still there may be deficiency of cash or of working capital in business. If the management wants to find out as to where the cash is being utilized, financial statement cannot help. Therefore, a statement is prepared of the sources and applications of funds from where Working Capital comes and it is utilized. This is called Fund Flow statement. Meaning of ‘Fund’ In a popular and generally accepted sense the term ‘fund’ is used to denote the excess of current assets over current liabilities : Working Capital  Ã‚  Ã‚  Ã‚   =  Ã‚  Ã‚   Current Assets – Current Liabilities Meaning of ‘Flow’ of Fund Flow of funds means transmigration (coming and going) of funds. In other words, Flow of funds means change in Working capital, as in funds flow statement the words ‘funds’ mean net working capital. Hence Coleman rightly states that, â€Å"The fund statement is statement summarizing the significant financial changes which have occurred between the beginning and the end of a company’s accounting period. † The flow of fund if is represented by changes in working capital, then it can happen, only if a transaction involves changes on both current item and noncurrent item. Every transaction has double entry. Various cases can be that transaction involves Change on current assets and on fixed assets (cash purchase of fixed assets) o Cash being current item and fixed assets are non current ? Change on current assets and on current assets (credit sale of inventory) o Debtors is a current item and inventory is also current in nature ? Change on current assets and change on current liabilities (payment made to creditors) o Cash is current asset and creditor, current liability ? Change on current liabilities and change on current liabilities (short term loan taken to clear overdraft) ? Change on fixed assets and on fixed liabilities (sale of investments to redeem debentures) So, amongst all these combinations, transactions which involve change, on one hand on current item and on other hand on non current item, they would only lead to fund flow. E. g. * Sell investments in cash. * Issue of shares * Raising long term loans, etc. Thus fund flow statement enumerates various sources from which funds come in organization and various applications which lead to usage of funds. It is an important tool to check the efficiency of management in the firm. It can make future projections about working capital requirements and thus firm can arrange for those requirements and can allocate funds in a more efficient manner. Preparation of fund flow statement involves preparation of adjusted profit and loss account which is prepared by excluding the non fund and non operating items from the initial figure of net profit. Different Names of Fund-flow Statement * A Funds Statement * A statement of sources and uses of fund * A statement of sources and application of fund * Where got and where gone statement * Inflow and outflow of fund statement Objectives of Fund Flow Statement The main purposes of Fund Flow Statement are: 1. To help to understand the changes in assets and asset sources which are not readily evident in the income statement or financial statement. 2. To inform as to how the cans to the business have been used. 3. To point out the financial strengths and weaknesses of the business How to Prepare a Fund Flow Statement Fund flow statements are prepared by taking the balance sheets for two dates representing the coverage period. The increases and decreases must then be calculated for each item. Finally, the changes are classified under four categories: (1) Long-term sources, (2) long-term uses, (3) short-term sources, (4) short-term uses. It is also important to zero out the non-fund based adjustments in order to capture only the changes that are accompanies by flow of funds. However, income accrued but received and expenses incurred but not received reckoned in the profit and loss statement should not be excluded from the profit figure for the fund flow statement. Fund flow statements can be used to identify a variety of problems in the way a company operates. For example, companies that are using short-term money to finance long-term investments may run into liquidity problems in the future. Meanwhile, a company that is using long-term money to finance short-term investments may not be efficiently utilizing its capital. Steps in Preparation of Fund Flow Statement: 1) Preparation of schedule changes in working capital (taking current items only). 2) Preparation of adjusted profit and loss account (to know fund from [or] fund lost in operations). 3) Preparation of accounts for non-current items (Ascertain the hidden information). 4) Preparation of the fund flow statement. Importance of funds flow statement: Funds flow statement is an important analytical tool for external as well as internal uses of financial statements. The users of funds flow statement can be listed as under: 1. Managements of various companies are able to review cash budgets with the aid of funds flow statements. They are extensively used by the management in the evaluation of alternative finance & investments. In the evaluation of alternative finance & investment plans, funds flow statement helps the management in the assessment of long-range forecasts of cash requirements & availability of liquid resources. The management can judge the quality of management decisions. 2. Investors are able to measure as how the company has utilized the funds supplied by them & its financial strength with the aid of funds statements. They gauge can the company capacity to generate funds from operations. On the basis of comparative study of the past with the present, investors can locate & identify possible drains on funds in the near future. 3. Funds statement serve as effective tools to the management for economic analysis as it supplies additional information, which cannot be provided by financial statements, based on historical data. . Fund statement explains the relationship between changes in working capital & net profits. Funds statement clearly shows the quantum of funds generated from operations. 5. Funds statement helps in the planning process of a company. They are useful in assessing the resources available and the manner of utilization of resources. 6. Funds statement explains the financial c onsequences of business activities. They provide explicit & clear awareness to questions regarding liquid & solvency positions of the company, distribution of dividend & whether the working capital has been effective or otherwise. 7. Management of companies can forecast in advance the requirements of additional capital & can plan its capital issue accordingly. 8. Fund statement provides clues to the creditors & financial institutions as to the ability of a company to use funds effectively in the best interest of the investors, creditors & the owners of the company. 9. Funds statement indicates the adequacy or inadequacy of working capital. 10. The information contained in fund flow statement is more reliable, dependable & consistent as it is prepared to include funds generated from operations & not net profit after depreciation. 11. Funds flow statement clearly indicate how profits have been invested, whether investments in fixed assets or inventories or ploughed back. Financial forecast: A financial forecast is normally an estimate of future financial outcomes for a company. Using historical internal accounting and sales data, in addition to external market and economic indicators, a financial forecast is an economist's best guess of what will happen to a company in financial terms over a given time period — which is usually one year. In this case, the company has forecasted its data for the years 2001 and 2002. Sources of funds 1. Net Income: Net income  is equal to the  income  that a firm has after subtracting costs and  expenses  from the total  revenue. Net  income can be distributed among holders of common stock as a  dividend  or held by the firm as  retained earnings. The items deducted will typically include  tax expense, financing expense (interest expense), and  minority interest. Net income is informally called the  bottom line  because it is typically found on the last line of a company's  income statement. [pic] The forecasted net income is increasing in the projected year. It has been projected that there would be an increase in the net income of 28% in 2001 and 17% in 2002. This can be credited to their expansion strategy in the coming years. There has been a dip in the net income in the year 1999 owning to the depreciation of Ukrainian currency by 125%. 2. Allowance for doubtful accounts: The allowance for doubtful accounts is a balance sheet account that reduces the reported amount of accounts receivable. Providing an allowance for doubtful accounts presents a more realistic picture of how much of the accounts receivable will be turning to cash. If a firm has made a sufficient provision in its allowance for doubtful accounts, reported earnings will not be penalized by bad debts when the bad debts occur. If uncollectible accounts are larger than expected, however, the firm will have to increase the size of the account and reduce reported income. [pic] There has been a sharp increase in allowance for doubtful accounts in the year 2001 which subsequently reduced. This can be linked to the increase in the credit they plan to give to the distributors owning to their expansion plans for the period and their recovery policy. The increase in doubtful accounts is a bad sign for the financial position for the company. 3. Depreciation: A  noncash expense  that reduces the  value  of an  asset as a  result  of  wear and tear, age, or  obsolescence. Most assets lose their value over time (in other  words, they depreciate), and must be replaced once the end of their useful life  is reached. Because it is a  non-cash expense, depreciation lowers the  company's  reported  earnings  while increasing  free cash flow. Calculated by two methods: 1. Straight Line Depreciation Method 2. Declining Balance Depreciation Method [pic] There has been gradual rise in the depreciation in the projected years. This can be related to increase in their number of assets (they are planning to buy more equipments and properties) which would lead to devaluation eventually. 4. Short-Term Debt: The account which comprises of any debt incurred by a company that is due within one year. The debt in this account is usually made up of short-term bank loans taken out by a company. The value of this account is very important when determining  a company's  financial health. If the account is larger than the company's  cash and cash equivalents, this suggests that the company  may be  in poor financial health and does not have  enough cash to pay off its short-term debts. Although  short-term debts are due within a year, there may be a portion of the long-term debt included in this account. This portion pertains to payments that must be made on  any long-term debt throughout the year. [pic] In initial years they heavily depended on short term debts. Over the years the financial health of the company improved which lead to the reduction in the debts. Owning to their credit policy and increase in investment in fixed assets, the company is not able to recover the money. This could have lead to increase in short term borrowings. 5. Accounts Payable: An accounting entry that represents an entity's obligation to pay  off a short-term debt to  its creditors. The accounts payable entry is found on a balance sheet under the heading current liabilities. Accounts payable are debts that must be paid off within a given period of time in order to avoid default. [pic] Increase in accounts payable shows that the company is making more purchases on credit. It could be due to taking more time to pay bills, buying more products on credit, paying higher prices for credit purchases. 6. Other Current Liabilities: A balance sheet entry used by companies to group together current liabilities that are not assigned to common liabilities such as debt obligations or accounts payable. Companies will group together these other current liabilities into one account on the balance sheet for the sake of simplicity. [pic] Since this category is made up of accruals and similar items, it increases as the company gets larger. It increased in 1999 owning to higher investment in Ukraine. The increase in the other current liabilities has been more or less stable in the projected years. 7. Total sources of cash: It is the sum total of all the components of sources of funds. [pic] Uses of Funds 8. Dividend Payments Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. [pic] There is a sharp increase in the dividend payment as the company is projecting a higher increase in their profits. The dividends are paid from the net income from the same year. Increase in dividend payments implies strong commitment to maintain higher level of dividends in the future. 9. Increases in cash balance Amount of available cash that a management decides to maintain in cash planning, to avoid or cover up cash shortfalls resulting from mismatch between cash inflows and outflows during an accounting period. [pic] The company is having optimum cash balance hence maintaining sufficient working capital. 10. & 11. Increases in accounts receivable Accounts receivable (A/R) is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer. In most business entities this is typically done by generating an invoice and mailing or electronically delivering it to the customer, who in turn must pay it within an established timeframe called credit or payment terms. [pic] In Germany, the company has maintained a tight hold on the credit that they supply to the distributors; thus there isn’t a significant change in the accounts receivable as compared to Ukraine. pic] Increases in accounts receivable (Ukraine) that is disproportionate to any growth in revenue may indicate the company is having trouble collecting money from its customers. Depending on the company's cash situation, this could require the company to borrow money to plug the hole from the unpaid money it is owed by its customers. Eventual ly, the company might need to write-off some of these accounts receivable as bad debt, in recognition of the fact that some customers might never pay. In extreme cases, the company might run out of cash and have to shut down. 12. Increases in inventories Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business. An organization's inventory can appear a mixed blessing, since it counts as an asset on the balance sheet, but it also ties up money that could serve for other purposes and requires additional expense for its protection. Inventory may also cause significant tax expenses, depending on particular countries' laws regarding depreciation of inventory. Inventory appears as a current asset on an organization's balance sheet because the organization can, in principle, turn it into cash by selling it. Some organizations hold larger inventories than their operations require in order inflating their apparent asset value and their perceived profitability. [pic] The fragile distribution system in Ukraine pre-2000 lead to increase in the inventories of the company as company is working on improving the distribution channel due to which the product flow has been projected to be smooth in coming years leading to decrease in inventory which is a healthy financial sign. 13. Increases in other assets Assets are economic resources owned by business or company. Two major asset classes are tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets. Current assets include inventory, while fixed assets include such items as buildings and equipment. Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. Examples of intangible assets are goodwill, copyrights, trademarks, patents and computer programs, and financial assets, including such items as accounts receivable, bonds and stocks. pic] There is a negative growth in the increase in the other assets because of the depreciation of other assets and they are not planning to acquire any new assets in near future. By 2002 they are planning to buy enough assets just to overcome the negative growth. 14. Reductions in long-term debt Long-term debts are loans and financial obligations that last for over one year. For example, debts obliga tions such as bonds and notes, which have maturities greater than one year, would be considered as long-term debts. pic] Reduction in long term debts from 1998 to 1999 could be due to overnight success of the company in Ukraine. The sound financial condition of the company has ensured the stable repayment of long term loans and would continue to do so in future. 15. Capital Expenditures Capital expenditures (CAPEX or capex) are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset ith a useful life that extends beyond the taxable year. Capex are used by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings. [pic] The sharp increase in the CAPEX can be explained by the inflow of capital through long term debts and the operating profit the company is planning to achieve in the projected period. 16. Total uses of cas h: It is the sum total of all the use components in the fund flow statement. [pic] Break Even Analysis The break-even point for a product is the point where total revenue received equals the total costs associated with the sale of the product (TR=TC). A break-even point is typically calculated in order for businesses to determine if it would be profitable to sell a proposed product, as opposed to attempting to modify an existing product instead so it can be made lucrative. Break even analysis can also be used to analyse the potential profitability of an expenditure in a sales-based business. Breakeven analysis is a management accounting tool used for profit planning of a firm. Profit planning is a function of the selling price of a unit of product, the variable cost of making and selling the product, the volume of product unit sold and in case of multi-product companies, sales mix and finally, the total fixed costs. Breakeven point (for output) = fixed cost / contribution per unit. Break-even analysis is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are â€Å"variable† (costs that change when the production output changes) and those that are â€Å"fixed† (costs not directly related to the volume of production). Total variable and fixed costs are compared with sales revenue in order to determine the  level of sales volume, sales value or production at which the business makes neither a profit nor a loss (the â€Å"break-even point†). Break even analysis depends on the following variables: 1. The fixed production costs for a product. 2. The variable production costs for a product. 3. The product's unit price. 4. The products expected unit sales. On the surface, break-even analysis is a tool to calculate at which sales volume the variable and fixed costs of producing your product will be recovered. Another way to look at it is that the break-even point is the point at which your product stops costing you money to produce and sell, and starts to generate a profit for your company. Break even analysis solves various managerial problems: †¢   Setting price levels: A price level is a hypothetical measure of overall prices for some set of goods and services, in a given region during a given interval, normalized relative to some base set. Hence with the help of BEP analysis a firm can determine the price level of product and particular sales volume which is necessary to produce an X amount of operating profit.   Targeting optimal variable/ fixed cost combinations †¢   Determining the financial attractiveness of different strategic options for your company. Break even Chart A breakeven chart is a strategic tool used to plot the financial revenue of a business unit against time or sales to determine the point when sales output is equal to revenue generated. This is reco gnised as the breakeven point. The information used to determine and analyse the breakeven point includes fixed, variable and total costs and the associated sales revenues. The analysis of a breakeven chart considers whether a venture runs at a profit or a loss. A sale above the breakeven point indicates continued and profitable growth. The principle of break-even theory is that during the early stages of a business venture, total costs, both fixed and variable, exceed sales. As output increases, sales begin to rise faster than costs and, eventually, they become equal (breakeven point). If sales continue to rise and exceed total costs, the business achieves profitability. The tool assumes that all the goods which are produced will be sold and that costs, namely the price, will remain constant. Likewise, it also relies on the capacity in terms of output to remain unchanged. Breakeven charts are universally applied to simply and graphically illustrate and forecast a company's projected revenue, and to calculate the time for profitability to be reached. It is used by financial and marketing strategists to predict the effect that changes in price will have on the percentage change in sales over time. It is also a useful tool to analyse the relationship between fixed and variable costs and to predict the effect on profitability of changes to those costs. Income Statements | | | | | | | |   |   |   |   |   |   |   | |Sales: Germany |62032 |62653 |64219 |66216 |68203 |70249 | |Sales: Ukraine |0 |4262 |17559 |25847 |37479 |48722 | |Total Net Sales |62032 |66915 |81778 |92063 |105682 |118971 | |Production Cost & Expenses |32258 |35366 |44271 49827 |61393 |71609 | |Excise duties |9143 |9108 |10486 |11557 |11625 |13087 | |Allowance for doubtful accounts |5 |7 |38 |24 |2 01 |60 | |Total Variable Cost |41406 |44481 |54795 |61408 |73219 |84756 | |   |   |   |   |   |   |   | |Administrative & Selling Expenses |12481 |13014 |16274 |18505 |18500 |18500 | |Depreciation |3609 |4314 |5844 |6068 |6766 |7448 | |Total Fixed Cost |16090 | | | | | | | | | | | | | | |(â‚ ¬ per hectoliters) | | | |Per unit Sales | |9206300/1173000 = | |78. 8508099 | | | |Per unit variable cost | | | | | |61408000/1173000 = | |52. 35123615 | | | |Contribution per unit | | | | | |Per unit Sales – Per unit variable cost = | |26. 3384484 | | | | | | |Breakeven Point = |Fixed cost/Contribution per unit | | | | | | | |24573000/26. 13384 = |940274. 633 | | | | | |Hence Number of units requires to be sold to reach breakeven point=940275 hectoliters | | | | | | | | | |Net Sale in year 2000 = 1173000 hectoliters | | |Revenue calculated from the sale of Breakeven volume sales = |breakeven point volume* per unit sale price |â‚ ¬ 73797559. 3 | | | | | |Total Variable cost at Breakeven Point = Breakeven volume * Per |940275 * 52. 32123615 = |â‚ ¬ 49224558. 57 | |unit variable cost | | | | | | | | Total Fixed Cost = â‚ ¬ 24573000 | | | | | | |Total cost of Production of Beer |Fixed cost + variable cost |â‚ ¬ 73797558. 57 | | | | | This analysis identifies the break-even volume, where revenues just equal total costs and Deutsche Brauerei recovers all its fixed cost at the break-even volume sale. Sales above Break-even Point will bring profits for the company. Margin of Safety (volume) = Total volume Sold – Breakeven volume 1173000 – 940275 = 232725 hectoliters Margin of Safety (Revenue) = per unit sale price * Margin of safety volume = 78. 48508099 * 232725 = â‚ ¬ 18265440. 47 Variable Cost for selling 232725 hectoliters = per unit variable cost * Margin of Safety (volume) = 52. 35123615 * 232725 = â‚ ¬ 12183441. 43 Deutsche Breuerei has already covered up fixed cost expense with break even volume sale hence they will make profit above the sale of break even volume. Net profit = Margin of Safety (Revenue) – Variable Cost for selling 232725 hectoliters = â‚ ¬ 18265440. 47 – â‚ ¬ 12183441. 43 = â‚ ¬ 6081999. 041 From the above analysis it is seen that as the volume increased above the break even volume, the profits rise disproportionately faster. The analysis of a breakeven chart shows that Deutsche Breuerei has to sell more than 940275 hectoliters of beer to start making the profit for the venture. A sale above the breakeven point indicates a continued and profitable growth, and venture makes a profit of â‚ ¬6081999. 041. Hence Deutsche Breuerei should stick to the current price level of beer and profit planning. Break even chart of Venture shows that if they can reduce the Production Cost in coming years through new facility and equipment they can increase the profits in long term. As the company is showing a healthy sales of good they can invest on production facility to reduce the per unit production cost and expenses to increases the overall profits. ———————– DEUTSCHE BRAUEREI Case Analysis- Question 2 MBA PHARM. TECH. (4th year) [pic] [pic] |ROLL NO. |NAME |ROLL NO. NAME | |38 |Devang Mehta |41 |Upasana Nagpal | |39 |Anand Menon |42 |Abhilash Nair | |40 |Manish Mishra |43 |Kadambari Narang | SCHOOL OF PHARMACY AND TECHNOLOGY MANGEMENT †0[pic]? 0[pic]? 0[pic]? 0[pic] 1[pic]†1[pic]x1[pic]|1[pic]? 1[pic]u1 [pic]2[pic]2[pic]2[pic]I2[pic]? 2[pic]N3[pic]l3[pic]A4[pic]A4[pic]? 4[pic]eOA »Ã‚ ­A »A »Ã¢â‚¬Å"| ­h ­Ã‚ »WI8A! h`fJh? *B*[pic]OJQJ^J[? ]ph333h? *B*[pic]CJOJQJph! hNu—h? *B*[pic]CJOJQJNet income =Revenue – Cost of goods sold – Sales discounts – Sales returns and allowances – Expenses – Minority interest – Preferred stock dividends

The Ever Changing Spirit Of Architecture - 1213 Words

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