Financial Ratios For Pace Ltd With Calculations Finance Essay - Free Essay Example

Sample details Pages: 6 Words: 1668 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? Introduction: Jill Dempsey and Mike Greaves started Pace Leisurewear Ltd five year ago. Pace Leisurewear are a manufacture and designer of leisure and casual clothes which aimed younger and higher-income group people. After lots of planning, they integrated product design and development with the sales and marketing. Don’t waste time! Our writers will create an original "Financial Ratios For Pace Ltd With Calculations Finance Essay" essay for you Create order Clothes range are designed by young and team led by Jane Barker which attracted many buyers and then orders converted by marketing team led by Jill Dempsey. Companys sales started increasing after economy coming out of recession with new exports markets in France and Switzerland. Mike and Jill invested in Pace Leisurewear from their life time savings and major contribution or largest shareholder is Keeble Estates Ltd, owned by Keeble brother, David and John Keeble. The board of directors of Pace Leisurewear Ltd are Jill Dempsey, Mike Geaves, Jane Berker, David Keeble and John Keeble. Problems with Pace Leisurewear Ltd: According to draft accounts from auditors, company profit has doubled; however, the companys cash situation is poor because they have invested a lot on additional plant and after selling old machines they didnt get anything plus expenses includes pound; 2.8 million for depreciation itself. The main problem which is Pace Leisurewear going to face is reduction of bank overdraft by half in next 6 months. Cash situation of company is very poor and they need large injection of funds in order to fulfil Arena orders and sort out companys liquidity problem. Keeble brother already rejected the offer to introduce another major share holder in company because this may dilute Keeble brothers influence. Financial ratios: In order to monitor business performance, accounting ratios plays important role in interpreting financial information about company. The more you know about how business is performing, more it will be easier to make informed decisions about how to manage growth in business. These ratios include following details, like, sales, purchases and payment made to employees etc. Used to see how business is doing. We need to analyse these details in order to forecast and compare with competitors. Below are the ratios for Pace Leisurewear ltd with calculation: Liquidity Ratio: A business is considered to be solvent when it can pay its debts whenever they become due. This means it can pay its suppliers properly by having enough working capital. There are two key ratios that help us determining business solvency: Current Ratio Quick Ratio Current Assets include Stock, Trade debtors, other debtors and cash according to balance sheet as on 2008. Current liabilities include trade creditors, other creditors, taxation, dividends and bank over drafts according to balance sheet as on 2008. Current assets includes short term assets or receivable and current liabilities implies short term liabilities which is payable in one year. Current assets for year before last totalled as 4356 (000) and last year as 9974 (000) and current liabilities totalled for year before last as 2482 (000) and for last year as 8844 (000), Ideally, current ratio should be 2: 1 which shows business has enough current assets to pay current liabilities. Current ratio for year before last is 1.8:1 which shows company has enough liquidity to pay his debts, however, current year ratio stating 1:1 which increases concern about the Pace Leisurewear ltd ability to pay its short term debts. Quick ratio or acid-test ratio measures liquidity more accurate than current ratio because it does not includes value of stock in current assets. Stock takes time to get converted into cash with payment terms typically standing more than 30 days. In order to calculate quick ratio, we need to remove stock from current assets. Ideal quick ratio should be 1:1, Company year before last quick ratio was 0.8:1 which is somehow acceptable, however, current year quick ratio comes to 0.5:1 which shows company is going to face serious problem with liquidity. Stock totalled for year before last was 2418(000) and for last year was 5820 (000), stock figure shows, companys frequently doubled its stock. Profitability ratios: We can measure business is profitable with the help of Profit and loss statement, but in order to put profit into prospective, whether, profit is growing in proportion to the size of business or business is profitable in his sector etc. Below are the profitability ratios of Pace Leisurewear Ltd. Return on Capital employed: ROCE shows companys profitability percentage on profit before interest and tax over capital employed. Higher the ROCE higher the companys profitability. Year before last ROCE was approx. 20% which increased to 29% in last year because Profit before tax and interest was doubled as compare to year before last, however, at the same time company also increased their fixed assets and current assets to 14470 (000) and 9974 (000). Thats why theres in only 9% increase in ROCE otherwise ROCE figure would be 40%. Return on Equity: ROE measures the return on the funds of the owners and equity shows the total investment of the owners of the firm. ROE for year before last was 18% and last year is 33%, which is almost doubles from year before last. Higher the ROE higher the return for share holders. Net profit after tax and preference dividend increased more than double which shows company earning good return from shareholders equity. Gross profit margin: Gross profit margin or operating profit margin shows the percentage of amount remaining after paying cost of sales. Companys gross profit increased by approx. 65% from 6510(000) to 10792(000) over sales which increased by approx. 60% from 14006(000) to 22410(000). Gross profit margin for year before last was 46% which increased to 48% in last year. The major factor which affected gross profit margin was cost of sales because cost of sales increased by 55% from year before last to last year. Net profit margin: This shows relationship between net profit and sales and its widely used ratio in business. Ideally, it should be higher or keep on increasing over year. It shows business net profitability. Net profit margin for year before last was 15% which increased to 21% in last year. Profit after tax increased by 134% over previous which is a very good sign for business future prospective. Asset management/ Efficiency Ratio: Efficiency ratios helps to figure out how efficiently business using its assets. There are many different types of ratios which help us to measure efficiency of business. Stock turnover ratio: This ratio shows the number of days that on average money is tied up in stocks. Year before last stock turnover was 118 days which increased to 183 days in last year. Large turnover days, worst for the business because the money is not available to use anywhere else and money got freeze with stock. Stock is the part of working capital and its important to quickly convert stock into cash to avoid liquidity problem. Debtors turnover ratio in days: This ratio shows, how quickly and efficiently business is collecting its debts. Shorter the period better and longer period more chance for bad debts. Year before last debtor turnover was 42 days (approx) which increase to 61 days (approx) in last year, this shows more time money will be held with debtors. Creditors turnover ratio in days: The creditors turnover shows, in how many days business is paying its debts. Creditor turnover days should be always greater than debtors turnover days. Longer creditors turnover days good for the business because business holding creditors money for a long time. If we compare creditor and debtors turnover days for year before last, this shows company is collecting debts from debtors in 42 days and paying to creditors in 59 days and in last year, debtor turnover is 61 days and creditor turnover is 82 days (approx) which is quite good for the business. Borrowing ratio: Gearing ratio: Gearing ratio measures of financial leverage which demonstrate the degree to which business activities are funded by owner fund versus creditor funds. Year before last gearing ratio was 34% which shows company is less geared as they have loans of 3600 (000) over equity, however, in last year, gearing ratio increases to 42% which shows company is highly geared as compare to previous year. Company increased the loan amount by 83% (approx) which is 6600 (000). Higher the loans, the more interest company will have to pay and this may affect company capacity to pay dividends. Cash operating cycle: Cash operating cycle helps business in finding average time between purchases of inventory and receiving cash from sales. Cash operating cycle helps in analysing companys liquidity problem. According to the year before last cash operating cycle, its shows business takes 101 days to convert purchases into sales and in cash. Last year cycle increases to 162 days, this states in order to generate cash, company need to wait for long 162 days. Plan of action: After analysing ratio for last two year, I found that company is soon going to face difficulties with liquidity. Bank already going to reduce over draft by half in next six months and this will make situation worst. Company need to consider in areas which require attention. Company is highly profitable, still company not able to finding investors. Company may look for investors who can invest in the company in exchange of high returns. Company can encourage customers and suppliers to make investment in the company; however, this may create interference in business by customer and suppliers in future policies. Company need to bring someone with financial background or expertise to take control over firm financing and investing activities. Company has invested a lot in fixed assets during last year, this shows company is growing rapidly without considering liquidity problem. Company need to control its growth and should more concern on orders to be fulfilled. Converting stock in cash is best possible short term solution, according to efficiency ratios, large number of stock turnover days affecting company cash conversion cycle which increased by 60% (approx) last year. Conversion of stock will reduce cash conversion cycle and thus increase cash inflow in company. Due to large amount of stock, quick ratio also affected badly. Try to get payment from debtors more rapidly and took a hold over creditors payment. Examine assets which are not required and thus sell them off in order to generate cash in business. Company can go forward to cancel proposed dividend for a particular year in order to maintain liquidity.

Essay on The Vietnam War - 1673 Words

The united front had long and historic roots in Vietnam. Used earlier in the century to mobilize anti-French forces, the united front brought together Communists and non-Communists in an umbrella organization that had limited, but important goals. On December 20, 1960, the Party s new united front, the National Liberation Front (NLF), was born. Anyone could join this front as long as they opposed Ngo Dinh Diem and wanted to unify Vietnam.The character of the NLF and its relationship to the Communists in Hanoi has caused considerable debate among scholars, anti-war activists, and policymakers. From the birth of the NLF, government officials in Washington claimed that Hanoi directed the NLFs violent attacks against the Saigon regime. In a†¦show more content†¦Instead of a large-scale military buildup as the White Paper had called for or a negotiated settlement that some of his advisers had long advocated, Kennedy sought a limited accord with Diem. The United States would incre ase the level of its military involvement in South Vietnam through more machinery and advisers, but would not intervene whole-scale with troops. This arrangement was doomed from the start, and soon reports from Vietnam came in to Washington attesting to further NLF victories. To counteract the NLFs success in the countryside, Washington and Saigon launched an ambitious and deadly military effort in the rural areas. Called the Strategic Hamlet Program, the new counterinsurgency plan rounded up villagers and placed them in safe hamlets constructed by the GVN. The idea was to isolate the NLF from villagers, its base of support. This culturally-insensitive plan produced limited results and further alienated the peasants from the Saigon regime. Through much of Diems reign, rural Vietnamese had viewed the GVN as a distant annoyance, but the Strategic Hamlet Program brought the GVN to the countryside. The Saigon regimes reactive policies ironically produced more cadres for the NLF. Militar y Coup By the summer of 1963, because of NLF successes and its own failures, it was clear that the GVN was on the verge of political collapse. Diems brother, Ngo Dinh Nhu, had raided the Buddhist pagodas of South Vietnam, claiming that they hadShow MoreRelatedThe War Of Vietnam And The Vietnam War1525 Words   |  7 PagesThe war in Vietnam is The United States and other capitalist bloc countries supported South Vietnam (Republic of Vietnam) against the support by the Soviet Union and other socialist bloc countries of North Vietnam (Democratic Republic of Vietnam) and the Vietcong of war. Which occurred during the Cold War of Vietnam (main battlefield), Laos, and Cambodia. This is the biggest and longtime war in American history during the 1960s (Best 2008). 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Principles of Education Free Essays

Theoretical and practical teaching and learning are the fundamental aspects of education. Since the early 20th century, education has been an essential part of nursing (Bastable 2008). Nurse educators encounter a diversity of learning styles and are challenged when needed to develop and adapt their teaching methods to accommodate students learning (Arthurs 2007). We will write a custom essay sample on Principles of Education or any similar topic only for you Order Now Mentors have a responsibility to assist the student within practice, building upon the students level of training (Kinnell and Hughes 2010). This essay will discuss the importance of the nurses role in relation to teaching both students and patients and will critically evaluate the literature used to build a lesson plan (Appendix 2) whilst discussing the process of learning and teaching. An important role of the nurse since the mid-1800s has been the responsibility of teaching. Educating other nurses for professional practice and promoting health were included. Florence Nightingale, the ultimate educator, influenced the nurse’s role to include educating families, patients and colleagues (Glanville 2000). Tilley et al (2006), states that by the 1900s the importance of the nurse as teacher was understood as preventing disease and promoting health. The National Midwifery Council (NMC) has for years put forth statements on the functions, standards, and qualifications for nursing practice. Patient teaching and the nurse’s role as educator to colleagues and student nurses are key elements (NMC 2002). Obtaining formal preparation in the principles of teaching and learning is an important part as there is much knowledge and skill to be acquired as educator with efficiency and effectiveness. A learner cannot be made to learn, but an effective approach in educating others is to actively involve learners in the education process. † (Bodenheimer et al. 2002 cited in Bastable 2008: 13). By working as a team a partnership philosophy should allow the nurse’s role as teacher of patients, families and students to be obtainable. A growing body of evidence suggests that effective education and learner participation go hand in hand. The nurse should act as a facilitator, creating an environment conducive to learning that motivates individuals to want to learn (Arthurs 007). Nurse educators encounter a variety of learning styles when faced with prospective nurses. Nursing students will have a variable age group with younger students possibly unaware of their learning styles as well as mature students who may be rooted in one way of learning (Arthurs 2007). Nursing education being primarily clinically focused results in limited knowledge of teaching strategies causing challenges for the nurse educator, this mix can lead to student and teacher frustration with poor academic performance among nursing students. Dunn and Griggs (2000) argue that teaching styles more closely aligned to a variety of adult learners will promote retention and application of new knowledge, these factors were taken into account when designing appendix 2. Blooms Taxonomy (1956 cited in Moseley et al. 2005: 102) is a system that describes, identifies and classifies three domains of learning – cognitive, affective and psychomotor. These domains are used for the development of instructional objectives and learning outcomes (Appendix 1), the first steps in the development of appendix 2. These steps identify what is expected as a result of the students learning experience (Connolly and DeYoung 2004). Airasian (2001) argues that objectives limit the learning experience and does not expose the student to further their knowledge. Gronlund (2000) explains that the need to clearly communicate the teacher’s expectations to the students, specifying what a student should know and be able to do at the end of the session is the most important part. These points guided the learning objectives of appendix 1 aiming to allow the student to strive to achieve their own personal best in order to enhance the learning experience. Reece and Walker (2000) believed that a lesson plan is designed to help teachers proceed with a lesson logically. Can every possibility be provided for? Surely a lesson plan has to be tentative and accommodating allowing substitute teachers to follow if necessary. Therefore it is only a step by step guide with estimation of time, questioning and probability, however needs to retain adequate content in order to be followed and understood. Fleming and Mill’s learning framework typology (Nilson 2003) reflects learning in a physical sense of visual, auditory, read/write and kinaesthetic preferences. Visual learners rely upon sight for their learning needs, such as presentations, diagrams and pictures with the use of colour to enhance knowledge retention (Susskind 2005). Nilson (2003) explains that the auditory learner prefers information to be explained and benefit from verbal presentations such as lectures and discussions. Students with preference of reading or writing benefit from well-structured textbooks in order to understand new information. In contrast to this type of learning the kinaesthetic learner usually has excellent eye-hand-mind coordination valuing practical information with active involvement (Nilson 2003). The lesson plan of Appendix 2 is structured to accommodate varied learning styles and planned towards delivering a variety of teaching strategies helping the student retain and learn. The wide range of learning styles represented in a large group of nursing students makes a single type teaching strategy ineffective for some of the class (Arthurs 2007). Appendix 2 allows for Visual learning through the use of diagrams and direct observation of role play, Auditory learning by a power point presentation and discussion on own experiences, Reading/Writing learners gain from the use of hand outs with limited information encouraging further reading as well as a textbook style informative diagram with rational. Kinesthetic learning is accommodated by the use of a practical section for the clinical skill. Nilson (2003) distinguished that individuals only retain 10-20% of what they hear, by including visual material to the presentation this can increase by 50%. Speaking involves active cognition as well as hearing and can increase recall to 80%, by combining speaking and applied methods retention increases to 90%. Producing a lesson plan to teach in auditory, visual and experimental modes is important, increasing the successfulness of a session by allowing individuals a variety of learning styles enhancing the storage of the material to 97% (Knowels, Holton III and Swanson 2008). Learning to accommodate a range of learning styles will improve retention of intricate information for both student and patient (Arthurs 2007). However this could be argued that this is time intensive to design. Time is a premium for the nurse, it may be unrealistic to have time to design lesson plans that accommodate all learning styles present in large classes, Appendix 2 is applicable to a small class of 10-12 students, and would not work in a large lecture theatre of over 100 due to the structure. Information may only be taught through lectures due to time constraints requiring the student to further the topic at home. It is therefore imperative that the environment, and number of students is assessed in onjunction with a lesson plan otherwise these variables could result in an unsuccessful teaching session. When teaching a patient, the approach will change, however styles will remain similar. A patient will always learn best from a one to one short session that is informative with use of written sources such leaflets allowing the information to be kept by the patient for further reference. Hands on or observation experi ence is also an excellent form to teach a patient (Quinn 2000). The success of a one to one session with a patient or family relative will rely deeply on interpersonal skills. The pace of the teaching has to be judged carefully to ensure that the patient is keeping up, and the atmosphere needs to be informal and relaxed. Factors that might affect patients or students’ ability and readiness to learn could include physical issues, psychological or emotional issues, and difficulties with cognition or the environment. Appendix 3 identifies a range of common expectations that are appropriate to nurse education students and contrasts these with a patient. There will be variations within the two learners, however the information will be valid for both. It is designed to ensure that nurse educators clearly understand the importance of assumptions towards learners (Quinn 2000). In reference to Appendix 4 different teaching methods would be used to manage the learning styles required by the patient and that of the student. Mrs Helen would need a substantial about of teaching and guidance in order to continue with her oral care and understand the importance of oral hygiene (Rosdahl and Kowalski 2008). This information would need to be informal, sensitive, and professional, working at the level of knowledge the patient comprehends, allowing Mrs Helen to understand through Visual learning with the use of leaflets and diagrams, Auditory through the giving of information and Kinesthetic through demonstration. As a mentor the nurse would teach the student through direct observation, possible contribution to the teaching of skills, followed by questioning and further research to develop the students’ knowledge (Kinnell and Hughes 2010) allowing for Visual, Auditory and Kinesthetic student learning. It is important to be able to consider and address your own learning needs in order to meet the needs of others in practice. Education is an important aspect of nursing, attaining the skills required for learning and teaching something new within the profession every day is vital as research and technology is always progressing. Key differences in the ways of approaching teaching within nursing include adoption of either a nurse focused approach or a patient focused approach (Forbes 2010). Without the correct understanding of learning styles the correct teaching strategy cannot be adopted which could result in poor education, misunderstood information retained by a student which could be passed onto a patient. Adopting patient focused approaches to nursing will allow the nurse educator to adapt to the teaching style necessary for the patient, ensuing exceptional guidance, support and education. Without this educating structure within the Nursing Programme, student nurses would not be prepared for the practice setting of communication, demonstration and most importantly continual education and teaching. How to cite Principles of Education, Essay examples