| Date post: | 03-Apr-2018 |
| Category: |
Documents |
| Upload: | ahmed-albir |
| View: | 220 times |
| Download: | 0 times |
of 14
7/29/2019 Acc 6110 Report Final
1/14
ACC 6110 Case Report
Tobryan Ltd & Case 13-4
(Identify Industry)
Date: 18 October 2011
Group Members:
Che Ku Sarah Nur Akmal G1112646
Mareena Chealee G1116908
Norly Marlia Kamaruddin G1116066
Nur Hasyimah Ibrahim G1115972
Siti Aishah Hussin G1115148
7/29/2019 Acc 6110 Report Final
2/14
ACC 6110 Group 1
Table of Contents:
Introduction..........................................................................................................................2
Analysis:
1) SOCF for Tobryans Ltd.................................................................................................2
2) Case 13-4
i. Basic Chemical Company............................................................................................4
ii. Maker of name-brand, quality mens apparel..........................................................5
iii. Meat packer................................................................................................................6
iv. Retail Jewelry Chain..................................................................................................7
v. Coal-carrying railroad................................................................................................8
vi. Automobile manufacturer.........................................................................................9
v. Advertising agency....................................................................................................10
References...........................................................................................................................12
2
7/29/2019 Acc 6110 Report Final
3/14
ACC 6110 Group 1
Introduction
For our case assignment, we were given two different cases:
1) Tobryan Ltd.
2) Case 13-4: Supplement to Identify the Industries
For the first case, we have to prepare the Statement of Cash Flow (SOCF) and briefly
comment on what does the statement of cash flow that we have prepared tells us about
Tobryan Ltd during the year.
For the second case, we were given balance sheets, in percentage form, and selected ratios
drawn from the balance sheets and operating statements of seven different industries (A-G).
We have to recognize the fact of certain differences between firms in the same industry. We
have to identify the industries, namely:
1. Basic chemical company
2. Maker of name-brand, qualitys men apparel
3. Meat packer
4. Retail jewellery chain (which leased its store properties
5. Coal-carrying railroad
6. Automobile manufacturer
7. Advertising agency
AnalysisAnalysis
Tobryans Ltd
Statement of Cash Flow for Tobryan Ltd is presented below:
TOBRYAN LTD
Statement of Cash Flow31 December, 2006
RM (Mill) RM (Mill)
Cash Flow from Operating Activities
Net income before tax 170
Adjustment for non-cash items:-
Depreciation* 73
Patents and trademarks (Amortization) 5
Adjustment for changes in Current Assets & Current
Liabilities items:-
Decrease in inventories 6Increase in trade debtors -9
3
7/29/2019 Acc 6110 Report Final
4/14
ACC 6110 Group 1
Decrease in prepayment 3
Increase in bank overdraft 16
Decrease in trade creditors -9
Decrease in accrued
expenses -4
Income tax
paid** -46
Net cash provided by Operating Activities 205
Cash Flow from Investing
Activity
Purchase of Fixtures, fittings, tools and
equipment -67
Net cash used by Investing Activities -67
Cash Flow from Financing Activities
Paid Debenture payable -100
Paid Dividend*** -50
Net cash used by Financing Activities -150
Net decrease in cash during the year -12
Add: Cash balance 1 January, 2006 17
Cash balance 31 December, 2006 5
* Depreciation :-Fixtures, fittings, tools and equipment (ending
balance) 180
Less: Purchase of Fixtures,
etc -67
Ending balance (old) 113
Fixtures, fittings, tools and equipment (begining
balance) 163
Ending balance (old) -113
Depreciation (Fixtures, fittings, tools andequipment) 50
Add: Depreciation (Plant and machinery) 23
Depreciation 73
** Income tax paid :-
Income tax payable
paid 46 bal. (b/d) 46
bal (c/d) 35 Income tax expense 35
81 81
bal. (b/d) + Income tax expense -bal (c/d) = Income taxpaid
4
7/29/2019 Acc 6110 Report Final
5/14
ACC 6110 Group 1
*** dividend paid :-
Dividend payable
paid 50 bal. (b/d) 50
bal (c/d) 60 Dividend expense 60
110 110
bal. (b/d) + Dividend expense -bal (c/d) = Dividend paid
Comment on statement of cash flow
The statement of cash flow of Tobryan Ltd. tells that there are net cash provided by operating
activities of 205 after the adjustment of non-cash items and the changes in current assets and
current liabilities items from the net income before tax. However, the net cash used by
investing and financing activities is greater that net cash provided. The net cash used by both
activities are 217 had given the net decrease in cash during the year which is 12. Finally, toensure the correct changes, we will get the ending balance of cash which is 5 after adding the
net decrease of cash with the beginning balance of cash. Thus, although the company
reported the profit after taxation of 135 but the companys cash is actually decreased during
the year that can affect investor decision.
CASE 13-4
i. Basic chemical company
From our calculations, we have identified that company D represents a basic chemical
industry. We used two companies for comparison:
- ExxonMobil: a global industry leader in almost every aspect of the energy and
petrochemical business
- Eastman: manufactures and markets chemicals, fibers and plastics worldwide. It is
headquartered in Kingsport, Tennessee, USA.
D ExxonMobil EastmanCash and marketable securities 15.7 14.3 25.2
Receivables 26.8 54.7 33.0
Inventories 23.2 22.0 30.2
Other current assets 1.2 8.93 11.5
Plant and equipment 33.4 - -
Other assets .7 - -
Total assets 100.0 100.0 100.0
Notes Payables - 0.09 -
Accounts Payable 29.3 16.5 16.9
Accrued taxes 1.4 3.2 4.7Other current liabilities - - 0.08
5
7/29/2019 Acc 6110 Report Final
6/14
ACC 6110 Group 1
Long-term debt 1.7 4.0 26.7
Other liabilities 1.6 25 23.5
Preferred stock - - -
Capital stock 9.4 3.1 13.3
Retained Earning 56.6 47.4 48.1
Selected Ratios
Current assets/current liabilities 2.06 2.01 1.9
Cash, marketable securities, and
receivables/current liabilities
1.32 0.4 0.94
Inventory turnover (X) 23X
Receivables collection period
(days)
18 29 26
Total debt/total assets 0.339 0.049 0.73
Long-term debt/capitalization 0.025 0.073 0.073
Net sales/total assets 5.4 1.2 1.1
Net profits/total assets 0.080 0.1 0.073Net profits/total net worth 0.121 0.14 0.2
Net profits/net sales 0.015 0.056 0.074
Comments:
- No note payable, other current liabilities and preferred stock.
- High retained earnings.
- Net profit/total assets ratio almost the same with D.
These are all the characteristics of a basic chemical company.
ii. Maker of name-brand, quality mens apparel
From our calculations, we have identified that company E represents a basic mens apparel
maker industry. We used two companies for comparison:
-Padini - Padini is a chain of apparel stores that provides wardrobe for the working lifestyleof modern men and women. Their collection is clean, timeless and modern.
- Guess Guess have the wide collection of men apparel such as jeans, shirts and jackets.
E Padini Guess
Cash and marketable securities 4.1 37.9 32.8
Receivables 21.5 9.2 18.5
Inventories 61.0 21.5 16.5
Other current assets .2 5.6 5.6
Plant and equipment 10.9 22.4 16.7
Other assets 2.3 3.4 9.9
Total assets 100.0 100 100
Notes Payables 5.1 7.3 -
Accounts Payable 12.6 20.5 12.7
6
7/29/2019 Acc 6110 Report Final
7/14
ACC 6110 Group 1
Accrued taxes 6.6 1.9 -
Other current liabilities 1.2 1.0 9.6
Long-term debt 5.8 2.8 0.09
Other liabilities 1.0 0.2 10.0
Preferred stock 2.2 - -
Capital stock 31.0 18.5 20.1
Retained Earning 34.5 47.3 60
Selected Ratios
Current assets/current liabilities 3.41 2.37 3.28
Cash, marketable securities, and
receivables/ current liabilities
1.62 1.68 2.54
Inventory turnover (X) 2.1X 3.1X 4.8X
Receivables collection period
(days)
64 23 47
Total debt/total assets 0.313 0.343 33.4
Long-term debt/capitalization 0.078Net sales/total assets 1.30 1.461 1.39
Net profits/total assets 0.085 0.171 0.236
Net profits/total net worth 0.124 0.260 0.355
Net profits/net sales 0.065 0.117 0.170
Comments:
- High inventories because they have to keep inventories before selling.
- Not much long-term debt because less sophisticated and less expensive machineries- High capital stock.
iii. Meat packer
From our calculations, we have identified that company B represents a meat packer industry.
We used two companies for comparison:
- PokPhand: transnational multinational that consists of three core businesses: agribusiness
and food, retail and distribution, and the telecommunications industries with investment
in 15 countries
- AFFCO: New Zealand's leading meat companies. It specializes in converting the superior
quality of livestock grazed on New Zealands lush pastures into prime meat products for
over 74 countries
B PokPhand AFFGO
Cash and marketable securities 7.6 12.7 4.2
Receivables 8.6 9 10.8
Inventories 24.9 22 15.5
Other current assets 3.5 2.9 1.5
Plant and equipment 44.6 24.3 51.1Other assets 10.8 28.9 16.8
7
7/29/2019 Acc 6110 Report Final
8/14
ACC 6110 Group 1
Total assets 100.0 100.0 100.0
Notes Payables - - 6.9
Accounts Payable 23.9 22.1 9.6
Accrued taxes 3.6 1.6 -
Other current liabilities 4.9 8.2 1.4
Long-term debt 3.4 1.1 3.7
Other liabilities 6.4 1.4 -
Preferred stock - - -
Capital stock 6.8 14.8 -
Retained Earning 50.0 52.2 49.6
Selected Ratios
Current assets/current liabilities 1.38 1.02 1.93
Cash, marketable securities, and
receivables/current liabilities
0.50 0.47 0.25
Inventory turnover (X) 6.4X 13X 14X
Receivables collection period(days)
19 10 15
Total debt/total assets 0.356 0.486 0.209
Long-term debt/capitalization 0.055
Net sales/total assets 1.61 1.80 2.505
Net profits/total assets 0.059 0.141 0.058
Net profits/total net worth 0.105 0.260 0.073
Net profits/net sales 0.037 0.078 0.023
Comments:
- No notes payable and preferred stock.
- High retained earnings.
- Current ratio, acid-test ratio and debt ratio almost the same with B.
iv. Retails jewellery stores (which lease its store properties)
From our calculations, we have identified that company F represents a retail jewellery stores.
We used two companies for comparison:
- Tiffany & Co.: The world's premier jeweler and America's house of design. It is aspecialty retailer, offering a selection of jewelry, timepieces, sterling silverware, china,
crystal, stationery, fragrances & accessories.
- Tomei: An investment holding company, engages in the design, manufacture, wholesale,
and retail of gold and jewelry primarily in the Peoples Republic of China.
F Tiffany Tomei
Cash and marketable securities 3.2 19.8 1.5
Receivables 27.6 4.9 6.0
Inventories 49.2 42.3 85.6Other current assets 1.6 4.9 2.3
8
7/29/2019 Acc 6110 Report Final
9/14
ACC 6110 Group 1
Plant and equipment 17.1 17.8 4.4
Other assets 1.3 10.3 0.2
Total assets 100.0 100.0 100.0
Notes Payables 2.0
Accounts Payable 10.5 16.5 8.7
Accrued taxes 3.1 - 2
Other current liabilities 5.8 14.2 22
Long-term debt 20.6 37.7 16.6
Other liabilities - 31 0.002
Preferred stock .1 -
Capital stock 17.4 23.1 42
Retained Earning 40.5 35.5 25
Selected Ratios
Current assets/current liabilities 3.81 5.6 2.1
Cash, marketable securities, and
receivables/current liabilities
1.44 0.8
Inventory turnover (X) 3.1X
Receivables collection period
(days)
66 66
Total debt/total assets 0.420 0.42 0.52
Long-term debt/capitalization 0.262
Net sales/total assets 1.51 0.82 0.1
Net profits/total assets 0.065 0.098 0.019
Net profits/total net worth 0.112 0.098 0.04
Net profits/net sales 0.043 0.11 0.057
Comments:
- A lot of inventories because its a retail store so it has to keep stock
- long term debt and retained earnings.
- Total debt/total assets ratio almost the same with F.
v. Coal-carrying railroad
From our calculations, we have identified that company A represents a coal-carrying railroad
industry. We used two companies for comparison:
- Union Pacific: Union Pacific Corporation (NYSE:UNP) is one of America's leading
transportation companies. Its principal operating company, Union Pacific Railroad, is
North America's premier railroad franchise, covering 23 states across the western two-
thirds of the United States.
- Norfolk Southern: Norfolk Southern Corporation is one of the nations premier
transportation companies. Its Norfolk Southern Railway subsidiary operates
approximately 20,000 route miles in 22 states and the District of Columbia, serves every
major container port in the eastern United States, and provides efficient connections to
9
7/29/2019 Acc 6110 Report Final
10/14
ACC 6110 Group 1
other rail carriers. Norfolk Southern operates the most extensive intermodal network in
the East and is a major transporter of coal and industrial products.
A UP NS
Cash and marketable securities 4.0 2.3 3.9
Receivables 3.9 1.7 2.9
Inventories -- -- --
Other current assets 0.9 0.8 0.9
Plant and equipment 78.7 89.4 82.4
Other assets 12.5 5.8 10
Total assets 100.0 100.0 100.0
Notes Payables -- -- --
Accounts Payable 2.9 1.9 4.2
Accrued taxes 2.6
Other current liabilities .6
Long-term debt 35.2 21.2 23.3
Other liabilities 3.8 6.4
Preferred stock --
Capital stock 16.7
Retained Earning 38.2 32.7
Selected Ratios
Current assets/current liabilities 1.45 0.85 1.19
Cash, marketable securities, and
receivables/current liabilitie
0.96 0.8 0.92
Inventory turnover (X) -- -- --
Receivables collection period(days)
20 15 30
Total debt/total assets 0.412 0.590 0.622
Long-term debt/capitalization 0.403 0.397
Net sales/total assets 0.32 0.43 0.34
Net profits/total assets 0.052 0.049 0.053
Net profits/total net worth 0.102 0.119 0.17
Net profits/net sales 0.167 0.114 0.157
Comments:
- No inventories because its a company that provides services.
- High in plant and equipment and long-term debt mostly for the highways and trains.
- Small accounts payable because its not a manufacturing company.
vi. Automobile manufacturer
From our calculations, we have identified that company C represents an automobile industry.
We used two companies for comparison:
10
7/29/2019 Acc 6110 Report Final
11/14
ACC 6110 Group 1
- BMW: With BMW, MINI and Rolls-Royce Motor Cars, the BMW Group is the world's
only car maker to pursue a purely premium strategy for all market sectors covered by its
brands, from exclusive smaller cars to top-of-the-range luxury limousines.
- Honda
The automobile manufacturer usually designs, develops, manufactures, markets, and sells
motor vehicles. About 250 million vehicles are in use in the United States. Around the world,
there were about 806 million cars and light trucks on the road in 2007.
C BMW Honda
Cash and marketable securities 5.1 6.8 18.8
Receivables 16.4 18.9 17.0
Inventories 11.0 7.1 8.0
Other current assets - 6.8 3.4
Plant and equipment 49.5 10.5 18.0Other assets 18.0 49.9 34.8
Total assets 100.0 100.0 100.0
Notes Payables 12.8 24.4 0.2
Accounts Payable 5.3 4.0 6.9
Accrued taxes 1.9 1.1 1.5
Other current liabilities 5.7 7.4 2.0
Long-term debt 30.4 32.9 20
Other liabilities - 9.0 12.4
Preferred stock - -- -
Capital stock 27.8 2.4 11.4Retained Earning 16.1 21.5 45.6
Selected Ratios
Current assets/current liabilities 1.25 1.08 1.35
Cash, marketable securities, and
receivables/current liabilities
1.20 2.53 0.64
Inventory turnover (X) 6X 7X 7.5X
Receivables collection period
(days)
64 108 85
Total debt/total assets 0.565 0.788 0.616
Long-term debt/capitalization 0.425Net sales/total assets 0.69 0.56 0.73
Net profits/total assets 0.057 0.030 0.024
Net profits/total net worth 0.137 0.14 0.063
Net profits/net sales 0.083 0.053 0.032
Comments:
- Small inventories and retained earnings.
- High notes payable because its manufacturing company.
- Most of the selected ratio almost the same with C.
11
7/29/2019 Acc 6110 Report Final
12/14
ACC 6110 Group 1
vii. Advertising agency
From our calculations, we have identified that company G represents an advertising industry.
We used two companies for comparison:
- Dentsu Inc: DENTSU INC. maintains the top share in the Japanese advertising market,which accounts for 10.1% of the global market. In terms of net sales, Dentsu is the No.1
advertising company in the domestic market.
- Omnicom
An advertising agency is a service business dedicated to creating, planning and handling
advertising for its clients. An advertising agency is independent from the client and provides
an outside point of view to the effort of selling the client's products or services.
G Dentsu Omnicom
Cash and marketable securities 17.0 14.8 8.98
Receivables 72.1 36.0 31.1
Inventories - 0.01 -
Other current assets .8 39.5 9.0
Plant and equipment 7.4 7.8 3.8
Other assets 2.7 1.9 47.1
Total assets 100.0 100.0 100.0
Notes Payables - 0.01 -
Accounts Payable 50.3 31.2 39.8
Accrued taxes - -
Other current liabilities 2.6 4.1 16.4
Long-term debt 3.3 8.91 8.3
Other liabilities 1.0
Preferred stock - 0.3
Capital stock 6.8 5.2
Retained Earning 36.0 40.6 36.0
Selected Ratios
Current assets/current liabilities 1.44 1.23 0.87
Cash, marketable securities, and
receivables/current liabilities
1.24 1.11 0.71
Inventory turnover (X) - --
Receivables collection period
(days)
42 89
Total debt/total assets 0.663 0.548 0.751
Long-term debt/capitalization 0.090 0.062
Net sales/total assets 5.33 1.5 0.7
Net profits/total assets 0.081 0.028 0.049
Net profits/total net worth 0.112 0.196
Net profits/net sales 0.043 0.109 0.074
Comments:
12
7/29/2019 Acc 6110 Report Final
13/14
ACC 6110 Group 1
- High in cash, receivables and accounts payable.
- No inventories because it provides services.
- Small capital stock, plant and equipment because advertising company does not use a lot of
equipment.
References
1. ExxonMobil 2010 Summary Annual Report
Website: (http://mytexpp.com/lubes/about_profile.aspx)
2. Eastman Chemical Company, 2010 Annual Report
Website: (http://www.eastman.com/Pages/Home.aspx)
3. Padini. (2010). Annual report
4. Guess. (2010). Income Statement for 2010.
Website: http://moneycentral.msn.com/investor/invsub
5. CP PokPhand Co. Ltd, Interim Report 2010
Website: http://www.cpp.hk/en/corporate_profile.jsp
6. AFFCO Annual Report 2009
7. Tiffany & Co. Year End Report 2010
8. Tomei Consolidated Berhad, Quarterly Report on Consolidated Results for the Second
Quarter ended 31st June 2011.
Website: http://announcements.bursamalaysia.com/EDMS/subweb.nsf/
9. Union Pacific Corporation 2007 Annual Report
Website: www.up.com/investors/annuals/index.shtml
10. Norfolk Southern 2010 Annual Report.
Website: www.nscorp.com/nscportal/nscorp/Investors/Financial_Reports/Annual%20Report/
11. BMW Group Annual Report 2010.
Website: www.geschaeftsbericht.bmwgroup.com/2010/gb/en/facts-and-figures-
2010/financial-statements.html
12. Honda Annual Report 2010.
Website: http://world.honda.com/investors/library/annual_report/2010/honda2010ar-all-e.pdf
13. Dentsu Group Corporate, Annual Report for the year ended March 31, 2010.
Website: www.dentsu.com/ir/data/statement.html
14. Omnicom Annual Report 2010:
Website:http://files.omnicomgroup.com/ReportManagement/UploadedFiles/12947265399233
3334.pdf
13
http://mytexpp.com/lubes/about_profile.aspxhttp://www.eastman.com/Pages/Home.aspxhttp://moneycentral.msn.com/investor/invsubhttp://www.cpp.hk/en/corporate_profile.jsphttp://announcements.bursamalaysia.com/EDMS/subweb.nsf/http://www.up.com/investors/annuals/index.shtmlhttp://www.nscorp.com/nscportal/nscorp/Investors/Financial_Reports/Annual%20Report/http://www.geschaeftsbericht.bmwgroup.com/2010/gb/en/facts-and-figures-2010/financial-statements.htmlhttp://www.geschaeftsbericht.bmwgroup.com/2010/gb/en/facts-and-figures-2010/financial-statements.htmlhttp://world.honda.com/investors/library/annual_report/2010/honda2010ar-all-e.pdfhttp://www.dentsu.com/ir/data/statement.htmlhttp://files.omnicomgroup.com/ReportManagement/UploadedFiles/129472653992333334.pdfhttp://files.omnicomgroup.com/ReportManagement/UploadedFiles/129472653992333334.pdfhttp://mytexpp.com/lubes/about_profile.aspxhttp://www.eastman.com/Pages/Home.aspxhttp://moneycentral.msn.com/investor/invsubhttp://www.cpp.hk/en/corporate_profile.jsphttp://announcements.bursamalaysia.com/EDMS/subweb.nsf/http://www.up.com/investors/annuals/index.shtmlhttp://www.nscorp.com/nscportal/nscorp/Investors/Financial_Reports/Annual%20Report/http://www.geschaeftsbericht.bmwgroup.com/2010/gb/en/facts-and-figures-2010/financial-statements.htmlhttp://www.geschaeftsbericht.bmwgroup.com/2010/gb/en/facts-and-figures-2010/financial-statements.htmlhttp://world.honda.com/investors/library/annual_report/2010/honda2010ar-all-e.pdfhttp://www.dentsu.com/ir/data/statement.htmlhttp://files.omnicomgroup.com/ReportManagement/UploadedFiles/129472653992333334.pdfhttp://files.omnicomgroup.com/ReportManagement/UploadedFiles/129472653992333334.pdf7/29/2019 Acc 6110 Report Final
14/14
ACC 6110 Group 1
14
