The legal structure a business chooses is fundamental to the way it operates. This legal framework determines who shares in the profits and losses, how tax is paid, where legal liabilities rests. It also determines the nature of a business' relationships with business associates, investors, creditors and employees.
There are three options for a business' legal structure:
(1) Sole TraderAn individual who runs an unincorporated business on his or her own. Sometimes otherwise known as a "sole proprietor" or (in the case of professional services) a"sole practitioner".
The sole trader structure is the most straight-forward option. The individual is taxed under the Inland Revenue's Self-Assessment system, with income tax calculated after deduction for legitimate business expenses and personal allowances. A sole trader is personally liable for the debts of the business, but also owns all the profits.
(2) PartnershipA partnership is an association of two or more people formed for the purpose of carrying on a business. Partnerships are governed by the Partnership Act (1890). Unlike an incorporated company (see below), a partnership does not have a "legal personality" of its own. Therefore the Partners are liable for any debts of the business.
Partner liability can take several forms. General Partners (the usual situation) are fully liable for business debts. Limited Partners are limited to the amount of investment they have made in the Partnership. Nominal Partners also sometimes exist. These are people who allow their names top be used for the benefit of the partnership, usually for remuneration, but they do not get a share of the partnership profits.
The operation of a partnership is usually governed by a "Partnership Agreement". The specific terms of this agreement are determined by the partners themselves, covering issues such as:
- Profit-sharing - normally, partners share equally in the profits;- Entitlement to receive salaries and other benefits in kind (e.g. cars, health insurance)- Interest on capital (the amount invested in the partnership)- Arrangements for the introduction of new partners- Arrangements for retiring partners- What happens when the partnership is dissolved
(3) Incorporated CompanyIncorporating business activities into a company confers life on the business as a "separate legal person". Profits and losses are the company's and it has its own debts and obligations. The company continues despite the resignation, death or bankruptcy of management or shareholders. A company also offers the best vehicle for expansion and the provision of outside investors.
There are four main types of company:
(1) Private company limited by shares - members' liability is limited to the amount unpaid on shares they hold
(2) Private company limited by guarantee - members' liability is limited to the amount they have agreed to contribute to the company's assets if it is wound up.
(3) Private unlimited company - there is no limit to the members' liability
(4) Public limited company (PLC) - the company's shares may be offered for sale to the general public and members' liability is limited to the amount unpaid on shares held by them.
Specific arrangements are required for public limited companies. The company must have a name ending with the initials "plc" and have an authorised share capital of at least £50,000 of which at least £12,5000 must be paid up. The company's "Memorandum of Association" must comply with the format in Table F of the Companies Regulations (1985). The company may offer shares and securities to the public. In return for this right to issue shares publicly, a public limited company is subject to much stricter regulation, particularly in relation to the publication of financial information.
The vast majority of companies incorporated in the UK and in other major industrialised countries are private companies limited by shares - "private limited liability companies".
The Office of the Registrar of Companies" (based in Cardiff) maintains a record of all UK private and public companies, their shareholders, directors and financial information. All this information has to be provided by Companies by law and is available to any member of the public for a small charge. You can search the Companies House databases at http://ws2.companieshouse.gov.uk/index.shtml
0
nhận xét
Business knowledge
Nhãn: Business
Advantages of a limited company
Whilst many businesses prefer to trade as a sole trader or a partnership, nearly all significant businesses operate as an incorporated company. The main advantages of incorporation via a limited company are summarised below:
Separate Legal Identity
A limited company has a legal existence separate from management and its members (the shareholders)
Members' liability is limited ("limited liability")
The protection given by limited liability is perhaps the most important advantage of incorporation. The members' only liability is for the amount unpaid on their shares. Since most private companies issue shares as "fully paid", if things go wrong, a members' only loss is the value of the shares and any loans made to the company. Personal assets are not put at risk. The protection of limited liability does not, however, apply to fraud. Company directors have a legal duty not to incur liabilities in their companies which they have reason to believe the company may not be able to pay. If creditors lose money through director fraud, the directors' personal liability is without limit.
Protection of Company Name
The choice of company names is restricted and, providing a chosen name complies with the rules, no-one else can use it. The only protection for sole traders and partnerships is trademark legislation.
Continuity
Once formed, a company has everlasting life. Directors, management and employees act as agent of the company. If they leave, retire, die - the company remains in existence. A company can only be terminated by winding up, liquidation or other order of the courts or Registrar of Companies.
New Shareholders and Investors can be easily introduced
The issue, transfer or sale of shares is a relatively straightforward process - although existing shareholders are protected via their "preemption" rights and by company legislation that seeks to protect the interests of minority investors.
The process of lending to a company is also easier than with other business forms. The lending bank may be able to secure its loan against certain assets of the business (a "floating charge") or against the business as a whole ("fixed charge".
Better Pension Schemes
Approved company pension schemes usually provide better benefits than those paid under contracts to self-employed sole trading businesses.
Taxation
Sole traders and partnerships pay income tax. Companies pay Corporation tax on their taxable profits. There is a wider range of allowances and tax-deductible costs that can be offset against a company's profits. In addition, the current level of Corporation Tax is lower than income tax rates. 0 nhận xét
Whilst many businesses prefer to trade as a sole trader or a partnership, nearly all significant businesses operate as an incorporated company. The main advantages of incorporation via a limited company are summarised below:
Separate Legal Identity
A limited company has a legal existence separate from management and its members (the shareholders)
Members' liability is limited ("limited liability")
The protection given by limited liability is perhaps the most important advantage of incorporation. The members' only liability is for the amount unpaid on their shares. Since most private companies issue shares as "fully paid", if things go wrong, a members' only loss is the value of the shares and any loans made to the company. Personal assets are not put at risk. The protection of limited liability does not, however, apply to fraud. Company directors have a legal duty not to incur liabilities in their companies which they have reason to believe the company may not be able to pay. If creditors lose money through director fraud, the directors' personal liability is without limit.
Protection of Company Name
The choice of company names is restricted and, providing a chosen name complies with the rules, no-one else can use it. The only protection for sole traders and partnerships is trademark legislation.
Continuity
Once formed, a company has everlasting life. Directors, management and employees act as agent of the company. If they leave, retire, die - the company remains in existence. A company can only be terminated by winding up, liquidation or other order of the courts or Registrar of Companies.
New Shareholders and Investors can be easily introduced
The issue, transfer or sale of shares is a relatively straightforward process - although existing shareholders are protected via their "preemption" rights and by company legislation that seeks to protect the interests of minority investors.
The process of lending to a company is also easier than with other business forms. The lending bank may be able to secure its loan against certain assets of the business (a "floating charge") or against the business as a whole ("fixed charge".
Better Pension Schemes
Approved company pension schemes usually provide better benefits than those paid under contracts to self-employed sole trading businesses.
Taxation
Sole traders and partnerships pay income tax. Companies pay Corporation tax on their taxable profits. There is a wider range of allowances and tax-deductible costs that can be offset against a company's profits. In addition, the current level of Corporation Tax is lower than income tax rates. 0 nhận xét
business angel finance
Nhãn: Business
Business owners often report that company finance of £10,000 to £250,000 can be very difficult to obtain - even from traditional sources such as banks and venture capitalists. Banks generally require security and most venture capital firms are not interested in financing such small amounts. In these circumstances, companies often have to turn to "Business Angels". Business angels are wealthy, entrepreneurial individuals who provide capital in return for a proportion of the company equity. They take a high personal risk in the expectation of owning part of a growing and successful business. Businesses Suitable for Angel Investment Businesses are unlikely to be suitable for investment by a business angel unless certain conditions are fulfilled. (1) The business needs to raise a reasonably modest amount (typically between £10,000 to £250,000,and is willing to sell a shareholding in return for financing. Equity finance of over £250,000 is usually provided by venture capital firms rather than business angels. The exceptions are when several business angels invest together in a syndicate or when business angels co-invest alongside venture capital funds. The sums raised can easily exceed £250,000. Raising finance in the form of equity (shares) strengthens the business' balance sheet. Banks (or other lenders) may then be willing to provide additional debt finance. (2) The owners and managers of the business are willing to develop a personal relationship with a business angel. This is important. Typically, business angels want hands-on involvement in the management of their investment, without necessarily exercising day-to-day control. This relationship can be a positive one for the business. A business angel with the right skills can strengthen a business by, for example, offering marketing and sales experience. (3) The business can, and is prepared to offer the business angel the possibility of a high return (usually an expected average annual return of at least 20%–30% per annum). Most of this return will be realised in the form of capital gains over a period of several years. (4) The business can demonstrate a strong understanding of its products and markets. Some business angels specialise by providing "expansion finance" for businesses with a proven track record, or in particular sectors. This enables an already successful business to grow faster. Business angels are also a significant source of start-up and early-stage capital for companies without a track record. A business plan based on convincing market research is essential. (5) The business has an experienced and professional management team - as a minimum with strong product and sales skills. If there are weaknesses in the existing management team, a business angel can often provide the missing skills or introduce the business to new management. (6) The business can offer the business angel the possibility of an ‘exit’. Even if the business angel has no plans to realise the investment by any particular date, the angel will want the option to be available. The most common exits are: - A trade sale of the business to another company.- Repurchase of the business angel’s shares by the company.- Purchase of the business angel’s shares by the company’s directors or another investor. Finding an angel Many contacts are made informally.For example: personal friends and family; wealthy business contacts; major suppliers and clients of the business. Investors can also be found by approaching formal angel networking organisations. Many of the most active business angels use these networks to find out about interesting investment opportunities.
0
nhận xét
Business planing
Nhãn: Business
What is the Business Plan? The business plan sets out how the owners/managers of a business intend to realise its objectives. Without such a plan a business is likely to drift. The business plan serves several purposes:it (1)enables management to think through the business in a logical and structured way and to set out the stages in the achievement of the business objectives.(2)enables management to plot progress against the plan (through the management accounts)(3)ensures that both the resources needed to carry out the strategy and the time when they are required are identified.(4)is a means for making all employees aware of the business's direction (assuming the key features of the business plan are communicated to employees)(5)is an important document for for discussion with prospective investors and lenders of finance (e.g. banks and venture capitalists).(6)links into the detailed, short-term, one-year budget. The Link Between the Business Plan and the Budget A budget can be defined as "a financial or quantitative statement", prepared for a specific accounting period (typically a year), containing the plans and policies to be pursued during that period. The main purposes of a budget are: (1)to monitor business unit and managerial performance (the latter possibly linking into bonus arrangements)(2)to forecast the out-turn of the period's trading (through the use of flexed budgets and based on variance analyses)(3)to assist with cost control. Generally, a functional budget is prepared for each functional area within a business (e.g. call-centre, marketing, production, research and development, finance and administration). In addition, it is also normal to produce a "capital budget" detailing the capital investment required for the period, a "cash flow budget", a "stock budget" and a "master budget", which includes the budgeted profit and loss account and balance sheet. Preparing a Business Plan A business plan has to be particular to the organisation in question, its situation and time. However, a business plan is not just a document, to be produced and filed. Business planning is a continuous process. The business plan has to be a living document, constantly in use to monitor, control and guide the progress of a business. That means it should be under regular review and will need to be amended in line with changing circumstances. Before preparing the plan management should:- review previous business plans (if any) and their outcome. This review will help highlight which areas of the business have proved difficult to forecast historically. For example, are sales difficult to estimate? If so why?- be very clear as to their objectives - a business plan must have a purpose- set out the key business assumptions on which their plans will be based (e.g. inflation, exchange rates, market growth, competitive pressures, etc.)- take a critical look at their business. The classical way is by means of the strengths-weaknesses-opportunities-threats (SWOT) analysis, which identifies the business's situation from four key angles. The strategies adopted by a business will be largely based on the outcome of this analysis. Preparing the Budget A typical business plan looks up to three years forward and it is normal for the first year of the plan to be set out in considerable detail. This one-year plan, or budget, will be prepared in such a way that progress can be regularly monitored (usually monthly) by checking the variance between the actual performance and the budget, which will be phased to take account of seasonal variations. The budget will show financial figures (cash, profit/loss working capital, etc) and also non-financial items such as personnel numbers, output, order book, etc. Budgets can be produced for units, departments and products as well as for the total organisation. Budgets for the forthcoming period are usually produced before the end of the current period. While it is not usual for budgets to be changed during the period to which they relate (apart from the most extraordinary circumstances) it is common practice for revised forecasts to be produced during the year as circumstances change. A further refinement is to flex the budgets, i.e. to show performance at different levels of business. This makes comparisons with actual outcomes more meaningful in cases where activity levels differ from those included in the budget. What Providers of Finance Want from a Business Plan Almost invariably bank managers and other providers of finance will want to see a business plan before agreeing to provide finance. Not to have a business plan will be regarded as a bad sign. They will be looking not only at the plan, but at the persons behind it. They will want details of the owner/managers of the business, their background and experience, other activities, etc. They will be looking for management commitment, with enthusiasm tempered by realism. The plan must be thought through and not be a skimpy piece of work. A few figures on a spreadsheet are not enough. The plan must be used to run the business and there must be a means for checking progress against the plan. An information system must be in place to provide regular details of progress against plan. Bank managers are particularly wary of businesses that are slow in producing internal performance figures. Lenders will want to guard against risk. In particular they will be looking for two assurances: (1)that the business has the means of making regular payment of interest on the amount loaned, and (2)that if everything goes wrong the bank can still get its money back (i.e. by having a debenture over the business's assets). Forward-looking financial statements, particularly the cash flow forecast, are therefore of critical importance. The bank wants openness and no surprises. If something is going wrong it does not want this covered up, it wants to be informed - quickly.
0
nhận xét
Value of business
Nhãn: Business
maximising the value of a business
Introduction
If an important financial objective of a business is to maximise the value of the business, how can this be achieved? The answer lies in the different approaches to valuing a business.
There are two broad approaches to valuing a business:
(1) Break-up Basis: this method of valuing a business is only of interest when the business is threatened with liquidation, or when management are considering selling off individual assets to raise cash;
(2) Market Value Basis: The market value of a business is the price at which buyers and sellers will trade shareholdings in a company. This method of valuation is most relevant to the financial objectives of a business.
When shares are traded on a recognised stock market, such as the Stock Exchange, the market value of a business can be measured by the share price.
When shares are held in a private company, and are not traded on any stock market, there is no easy way to measure value. It becomes a subjective judgement on behalf of both the buyer and seller about factors such as:
• Future profits and cash flows that the buyer can expect the business to deliver;
• The “intangible” quality of the business, including the quality of management, products etc.
• The strategic position of the business – e.g. is it a market leader?
Nevertheless, the objective remains for management – to maximise the wealth of their ordinary shareholders.
The wealth of shareholders in a company comes from:
• Dividends received:
• Market value of the shares
A shareholders’ return on investment is obtained from:
• Dividends received;
• Capital gains from increases in the market value of his or her shares
If shares in a business are traded on a stock market, the wealth of shareholders is increased when the share price goes up. The share price will go up when the business makes additional profits (or is expected by the market to do so) which it pays out as dividends or re-invests in the business to achieve future profit growth. However, to increase the share price, the business should try to increase profits without taking business and financial risks which worry shareholders (thereby increasing their required rate of return). 0 nhận xét
Introduction
If an important financial objective of a business is to maximise the value of the business, how can this be achieved? The answer lies in the different approaches to valuing a business.
There are two broad approaches to valuing a business:
(1) Break-up Basis: this method of valuing a business is only of interest when the business is threatened with liquidation, or when management are considering selling off individual assets to raise cash;
(2) Market Value Basis: The market value of a business is the price at which buyers and sellers will trade shareholdings in a company. This method of valuation is most relevant to the financial objectives of a business.
When shares are traded on a recognised stock market, such as the Stock Exchange, the market value of a business can be measured by the share price.
When shares are held in a private company, and are not traded on any stock market, there is no easy way to measure value. It becomes a subjective judgement on behalf of both the buyer and seller about factors such as:
• Future profits and cash flows that the buyer can expect the business to deliver;
• The “intangible” quality of the business, including the quality of management, products etc.
• The strategic position of the business – e.g. is it a market leader?
Nevertheless, the objective remains for management – to maximise the wealth of their ordinary shareholders.
The wealth of shareholders in a company comes from:
• Dividends received:
• Market value of the shares
A shareholders’ return on investment is obtained from:
• Dividends received;
• Capital gains from increases in the market value of his or her shares
If shares in a business are traded on a stock market, the wealth of shareholders is increased when the share price goes up. The share price will go up when the business makes additional profits (or is expected by the market to do so) which it pays out as dividends or re-invests in the business to achieve future profit growth. However, to increase the share price, the business should try to increase profits without taking business and financial risks which worry shareholders (thereby increasing their required rate of return). 0 nhận xét
business planning
Nhãn: Business
What is the Business Plan?
The business plan sets out how the owners/managers of a business intend to realise its objectives. Without such a plan a business is likely to drift.
The business plan serves several purposes:it
(1)enables management to think through the business in a logical and structured way and to set out the stages in the achievement of the business objectives.(2)enables management to plot progress against the plan (through the management accounts)(3)ensures that both the resources needed to carry out the strategy and the time when they are required are identified.(4)is a means for making all employees aware of the business's direction (assuming the key features of the business plan are communicated to employees)(5)is an important document for for discussion with prospective investors and lenders of finance (e.g. banks and venture capitalists).(6)links into the detailed, short-term, one-year budget.
The Link Between the Business Plan and the Budget
A budget can be defined as "a financial or quantitative statement", prepared for a specific accounting period (typically a year), containing the plans and policies to be pursued during that period.
The main purposes of a budget are:
(1)to monitor business unit and managerial performance (the latter possibly linking into bonus arrangements)(2)to forecast the out-turn of the period's trading (through the use of flexed budgets and based on variance analyses)(3)to assist with cost control.
Generally, a functional budget is prepared for each functional area within a business (e.g. call-centre, marketing, production, research and development, finance and administration). In addition, it is also normal to produce a "capital budget" detailing the capital investment required for the period, a "cash flow budget", a "stock budget" and a "master budget", which includes the budgeted profit and loss account and balance sheet.
Preparing a Business Plan
A business plan has to be particular to the organisation in question, its situation and time. However, a business plan is not just a document, to be produced and filed. Business planning is a continuous process. The business plan has to be a living document, constantly in use to monitor, control and guide the progress of a business. That means it should be under regular review and will need to be amended in line with changing circumstances.
Before preparing the plan management should:- review previous business plans (if any) and their outcome. This review will help highlight which areas of the business have proved difficult to forecast historically. For example, are sales difficult to estimate? If so why?- be very clear as to their objectives - a business plan must have a purpose- set out the key business assumptions on which their plans will be based (e.g. inflation, exchange rates, market growth, competitive pressures, etc.)- take a critical look at their business. The classical way is by means of the strengths-weaknesses-opportunities-threats (SWOT) analysis, which identifies the business's situation from four key angles. The strategies adopted by a business will be largely based on the outcome of this analysis.
Preparing the Budget
A typical business plan looks up to three years forward and it is normal for the first year of the plan to be set out in considerable detail. This one-year plan, or budget, will be prepared in such a way that progress can be regularly monitored (usually monthly) by checking the variance between the actual performance and the budget, which will be phased to take account of seasonal variations.
The budget will show financial figures (cash, profit/loss working capital, etc) and also non-financial items such as personnel numbers, output, order book, etc. Budgets can be produced for units, departments and products as well as for the total organisation. Budgets for the forthcoming period are usually produced before the end of the current period. While it is not usual for budgets to be changed during the period to which they relate (apart from the most extraordinary circumstances) it is common practice for revised forecasts to be produced during the year as circumstances change.
A further refinement is to flex the budgets, i.e. to show performance at different levels of business. This makes comparisons with actual outcomes more meaningful in cases where activity levels differ from those included in the budget.
What Providers of Finance Want from a Business Plan
Almost invariably bank managers and other providers of finance will want to see a business plan before agreeing to provide finance. Not to have a business plan will be regarded as a bad sign. They will be looking not only at the plan, but at the persons behind it. They will want details of the owner/managers of the business, their background and experience, other activities, etc. They will be looking for management commitment, with enthusiasm tempered by realism. The plan must be thought through and not be a skimpy piece of work. A few figures on a spreadsheet are not enough.
The plan must be used to run the business and there must be a means for checking progress against the plan. An information system must be in place to provide regular details of progress against plan. Bank managers are particularly wary of businesses that are slow in producing internal performance figures. Lenders will want to guard against risk. In particular they will be looking for two assurances:
(1)that the business has the means of making regular payment of interest on the amount loaned, and
(2)that if everything goes wrong the bank can still get its money back (i.e. by having a debenture over the business's assets). Forward-looking financial statements, particularly the cash flow forecast, are therefore of critical importance. The bank wants openness and no surprises. If something is going wrong it does not want this covered up, it wants to be informed - quickly. 0 nhận xét
The business plan sets out how the owners/managers of a business intend to realise its objectives. Without such a plan a business is likely to drift.
The business plan serves several purposes:it
(1)enables management to think through the business in a logical and structured way and to set out the stages in the achievement of the business objectives.(2)enables management to plot progress against the plan (through the management accounts)(3)ensures that both the resources needed to carry out the strategy and the time when they are required are identified.(4)is a means for making all employees aware of the business's direction (assuming the key features of the business plan are communicated to employees)(5)is an important document for for discussion with prospective investors and lenders of finance (e.g. banks and venture capitalists).(6)links into the detailed, short-term, one-year budget.
The Link Between the Business Plan and the Budget
A budget can be defined as "a financial or quantitative statement", prepared for a specific accounting period (typically a year), containing the plans and policies to be pursued during that period.
The main purposes of a budget are:
(1)to monitor business unit and managerial performance (the latter possibly linking into bonus arrangements)(2)to forecast the out-turn of the period's trading (through the use of flexed budgets and based on variance analyses)(3)to assist with cost control.
Generally, a functional budget is prepared for each functional area within a business (e.g. call-centre, marketing, production, research and development, finance and administration). In addition, it is also normal to produce a "capital budget" detailing the capital investment required for the period, a "cash flow budget", a "stock budget" and a "master budget", which includes the budgeted profit and loss account and balance sheet.
Preparing a Business Plan
A business plan has to be particular to the organisation in question, its situation and time. However, a business plan is not just a document, to be produced and filed. Business planning is a continuous process. The business plan has to be a living document, constantly in use to monitor, control and guide the progress of a business. That means it should be under regular review and will need to be amended in line with changing circumstances.
Before preparing the plan management should:- review previous business plans (if any) and their outcome. This review will help highlight which areas of the business have proved difficult to forecast historically. For example, are sales difficult to estimate? If so why?- be very clear as to their objectives - a business plan must have a purpose- set out the key business assumptions on which their plans will be based (e.g. inflation, exchange rates, market growth, competitive pressures, etc.)- take a critical look at their business. The classical way is by means of the strengths-weaknesses-opportunities-threats (SWOT) analysis, which identifies the business's situation from four key angles. The strategies adopted by a business will be largely based on the outcome of this analysis.
Preparing the Budget
A typical business plan looks up to three years forward and it is normal for the first year of the plan to be set out in considerable detail. This one-year plan, or budget, will be prepared in such a way that progress can be regularly monitored (usually monthly) by checking the variance between the actual performance and the budget, which will be phased to take account of seasonal variations.
The budget will show financial figures (cash, profit/loss working capital, etc) and also non-financial items such as personnel numbers, output, order book, etc. Budgets can be produced for units, departments and products as well as for the total organisation. Budgets for the forthcoming period are usually produced before the end of the current period. While it is not usual for budgets to be changed during the period to which they relate (apart from the most extraordinary circumstances) it is common practice for revised forecasts to be produced during the year as circumstances change.
A further refinement is to flex the budgets, i.e. to show performance at different levels of business. This makes comparisons with actual outcomes more meaningful in cases where activity levels differ from those included in the budget.
What Providers of Finance Want from a Business Plan
Almost invariably bank managers and other providers of finance will want to see a business plan before agreeing to provide finance. Not to have a business plan will be regarded as a bad sign. They will be looking not only at the plan, but at the persons behind it. They will want details of the owner/managers of the business, their background and experience, other activities, etc. They will be looking for management commitment, with enthusiasm tempered by realism. The plan must be thought through and not be a skimpy piece of work. A few figures on a spreadsheet are not enough.
The plan must be used to run the business and there must be a means for checking progress against the plan. An information system must be in place to provide regular details of progress against plan. Bank managers are particularly wary of businesses that are slow in producing internal performance figures. Lenders will want to guard against risk. In particular they will be looking for two assurances:
(1)that the business has the means of making regular payment of interest on the amount loaned, and
(2)that if everything goes wrong the bank can still get its money back (i.e. by having a debenture over the business's assets). Forward-looking financial statements, particularly the cash flow forecast, are therefore of critical importance. The bank wants openness and no surprises. If something is going wrong it does not want this covered up, it wants to be informed - quickly. 0 nhận xét
marketing-orientated
Nhãn: Business
structural characteristics of a marketing-orientated business
A business that has a marketing orientation sees the needs of customers and consumers as vital. As it develops and markets products to meet those demands, certain structural characteristics become apparent in the business.
These are summarised in the table below:
Business Function:
Identifying customer/consumer needs and wants : Marketing research
Developing products to meet customer/consumer needs and wants: Research and developmentProduction
Deciding on the value of the product to customers: Pricing (sales and marketing department)
Making the product available to customers at the right time and place: Distribution
Informing customers/consumers of the existence of the product and persuading them to buy it: Promotion
You should expect to see all the above activities well-established in a business that is marketing-orientated. 0 nhận xét
A business that has a marketing orientation sees the needs of customers and consumers as vital. As it develops and markets products to meet those demands, certain structural characteristics become apparent in the business.
These are summarised in the table below:
Business Function:
Identifying customer/consumer needs and wants : Marketing research
Developing products to meet customer/consumer needs and wants: Research and developmentProduction
Deciding on the value of the product to customers: Pricing (sales and marketing department)
Making the product available to customers at the right time and place: Distribution
Informing customers/consumers of the existence of the product and persuading them to buy it: Promotion
You should expect to see all the above activities well-established in a business that is marketing-orientated. 0 nhận xét
customer-orientated
Nhãn: Business
marketing management in a customer-orientated business
The process of marketing management is about attracting and retaining customers by offering them desirable products that satisfy needs and meet wants.
Marketing management in a customer-orientated business consists of five key tasks summarised in the table below:
1/- Identify target markets: Management have to identify those customers with whom they want to trade. The choice of target markets will be influenced by the wealth consumers hold and the business' ability to serve them.
2/- Market research: Management have to collect information on the current and potential needs of customers in the markets they have chosen to supply. Areas to research include how customers buy (which marketing channels are used) and what competitors are offering
3/- Product development: Businesses must develop products and services that meet needs and wants sufficiently to attract target customers to wish and buy
4/- Marketing mix: Having identified the target markets and developed relevant products, management must then determine the price, promotion and distribution for the product. The marketing mix is tailored to offer value to customers, to communicate the offer and to make it accessible and convenient
5/- Market monitoring: The objective in marketing is to first attract customers - and then (most importantly) retain them by building a relationship. In order to do this effectively, they need feedback on customer satisfaction. They also need to feed this back into product design and marketing mix as customer needs and the competitive environment changes 0 nhận xét
The process of marketing management is about attracting and retaining customers by offering them desirable products that satisfy needs and meet wants.
Marketing management in a customer-orientated business consists of five key tasks summarised in the table below:
1/- Identify target markets: Management have to identify those customers with whom they want to trade. The choice of target markets will be influenced by the wealth consumers hold and the business' ability to serve them.
2/- Market research: Management have to collect information on the current and potential needs of customers in the markets they have chosen to supply. Areas to research include how customers buy (which marketing channels are used) and what competitors are offering
3/- Product development: Businesses must develop products and services that meet needs and wants sufficiently to attract target customers to wish and buy
4/- Marketing mix: Having identified the target markets and developed relevant products, management must then determine the price, promotion and distribution for the product. The marketing mix is tailored to offer value to customers, to communicate the offer and to make it accessible and convenient
5/- Market monitoring: The objective in marketing is to first attract customers - and then (most importantly) retain them by building a relationship. In order to do this effectively, they need feedback on customer satisfaction. They also need to feed this back into product design and marketing mix as customer needs and the competitive environment changes 0 nhận xét
Venture capital
Nhãn: Accounting
Venture Capital is a form of "risk capital". In other words, capital that is invested in a project (in this case - a business) where there is a substantial element of risk relating to the future creation of profits and cash flows. Risk capital is invested as shares (equity) rather than as a loan and the investor requires a higher"rate of return" to compensate him for his risk. The main sources of venture capital in the UK are venture capital firms and "business angels" - private investors. Separate Tutor2u revision notes cover the operation of business angels. In these notes, we principally focus on venture capital firms. However, it should be pointed out the attributes that both venture capital firms and business angels look for in potential investments are often very similar. What is venture capital? Venture capital provides long-term, committed share capital, to help unquoted companies grow and succeed. If an entrepreneur is looking to start-up, expand, buy-into a business, buy-out a business in which he works, turnaround or revitalise a company, venture capital could help do this. Obtaining venture capital is substantially different from raising debt or a loan from a lender. Lenders have a legal right to interest on a loan and repayment of the capital, irrespective of the success or failure of a business . Venture capital is invested in exchange for an equity stake in the business. As a shareholder, the venture capitalist's return is dependent on the growth and profitability of the business. This return is generally earned when the venture capitalist "exits" by selling its shareholding when the business is sold to another owner. Venture capital in the UK originated in the late 18th century, when entrepreneurs found wealthy individuals to back their projects on an ad hoc basis. This informal method of financing became an industry in the late 1970s and early 1980s when a number of venture capital firms were founded. There are now over 100 active venture capital firms in the UK, which provide several billion pounds each year to unquoted companies mostly located in the UK. What kind of businesses are attractive to venture capitalists? Venture capitalist prefer to invest in "entrepreneurial businesses". This does not necessarily mean small or new businesses. Rather, it is more about the investment's aspirations and potential for growth, rather than by current size. Such businesses are aiming to grow rapidly to a significant size. As a rule of thumb, unless a business can offer the prospect of significant turnover growth within five years, it is unlikely to be of interest to a venture capital firm. Venture capital investors are only interested in companies with high growth prospects, which are managed by experienced and ambitious teams who are capable of turning their business plan into reality. For how long do venture capitalists invest in a business? Venture capital firms usually look to retain their investment for between three and seven years or more. The term of the investment is often linked to the growth profile of the business. Investments in more mature businesses, where the business performance can be improved quicker and easier, are often sold sooner than investments in early-stage or technology companies where it takes time to develop the business model. Where do venture capital firms obtain their money? Just as management teams compete for finance, so do venture capital firms. They raise their funds from several sources. To obtain their funds, venture capital firms have to demonstrate a good track record and the prospect of producing returns greater than can be achieved through fixed interest or quoted equity investments. Most UK venture capital firms raise their funds for investment from external sources, mainly institutional investors, such as pension funds and insurance companies. Venture capital firms' investment preferences may be affected by the source of their funds. Many funds raised from external sources are structured as Limited Partnerships and usually have a fixed life of 10 years. Within this period the funds invest the money committed to them and by the end of the 10 years they will have had to return the investors' original money, plus any additional returns made. This generally requires the investments to be sold, or to be in the form of quoted shares, before the end of the fund. Venture Capital Trusts (VCT's) are quoted vehicles that aim to encourage investment in smaller unlisted (unquoted and AIM quoted companies) UK companies by offering private investors tax incentives in return for a five-year investment commitment. The first were launched in Autumn 1995 and are mainly managed by UK venture capital firms. If funds are obtained from a VCT, there may be some restrictions regarding the company's future development within the first few years. What is involved in the investment process? The investment process, from reviewing the business plan to actually investing in a proposition, can take a venture capitalist anything from one month to one year but typically it takes between 3 and 6 months. There are always exceptions to the rule and deals can be done in extremely short time frames. Much depends on the quality of information provided and made available. The key stage of the investment process is the initial evaluation of a business plan. Most approaches to venture capitalists are rejected at this stage. In considering the business plan, the venture capitalist will consider several principal aspects: - Is the product or service commercially viable? - Does the company have potential for sustained growth? - Does management have the ability to exploit this potential and control the company through the growth phases? - Does the possible reward justify the risk? - Does the potential financial return on the investment meet their investment criteria? In structuring its investment, the venture capitalist may use one or more of the following types of share capital: Ordinary sharesThese are equity shares that are entitled to all income and capital after the rights of all other classes of capital and creditors have been satisfied. Ordinary shares have votes. In a venture capital deal these are the shares typically held by the management and family shareholders rather than the venture capital firm. Preferred ordinary sharesThese are equity shares with special rights.For example, they may be entitled to a fixed dividend or share of the profits. Preferred ordinary shares have votes. Preference sharesThese are non-equity shares. They rank ahead of all classes of ordinary shares for both income and capital. Their income rights are defined and they are usually entitled to a fixed dividend (eg. 10% fixed). The shares may be redeemable on fixed dates or they may be irredeemable. Sometimes they may be redeemable at a fixed premium (eg. at 120% of cost). They may be convertible into a class of ordinary shares. Loan capitalVenture capital loans typically are entitled to interest and are usually, though not necessarily repayable. Loans may be secured on the company's assets or may be unsecured. A secured loan will rank ahead of unsecured loans and certain other creditors of the company. A loan may be convertible into equity shares. Alternatively, it may have a warrant attached which gives the loan holder the option to subscribe for new equity shares on terms fixed in the warrant. They typically carry a higher rate of interest than bank term loans and rank behind the bank for payment of interest and repayment of capital. Venture capital investments are often accompanied by additional financing at the point of investment. This is nearly always the case where the business in which the investment is being made is relatively mature or well-established. In this case, it is appropriate for a business to have a financing structure that includes both equity and debt. Other forms of finance provided in addition to venture capitalist equity include: - Clearing banks - principally provide overdrafts and short to medium-term loans at fixed or, more usually, variable rates of interest. - Merchant banks - organise the provision of medium to longer-term loans, usually for larger amounts than clearing banks. Later they can play an important role in the process of "going public" by advising on the terms and price of public issues and by arranging underwriting when necessary. - Finance houses - provide various forms of installment credit, ranging from hire purchase to leasing, often asset based and usually for a fixed term and at fixed interest rates. Factoring companies - provide finance by buying trade debts at a discount, either on a recourse basis (you retain the credit risk on the debts) or on a non-recourse basis (the factoring company takes over the credit risk). Government and European Commission sources - provide financial aid to UK companies, ranging from project grants (related to jobs created and safeguarded) to enterprise loans in selective areas. Mezzanine firms - provide loan finance that is halfway between equity and secured debt. These facilities require either a second charge on the company's assets or are unsecured. Because the risk is consequently higher than senior debt, the interest charged by the mezzanine debt provider will be higher than that from the principal lenders and sometimes a modest equity "up-side" will be required through options or warrants. It is generally most appropriate for larger transactions. Making the Investment - Due Diligence To support an initial positive assessment of your business proposition, the venture capitalist will want to assess the technical and financial feasibility in detail. External consultants are often used to assess market prospects and the technical feasibility of the proposition, unless the venture capital firm has the appropriately qualified people in-house. Chartered accountants are often called on to do much of the due diligence, such as to report on the financial projections and other financial aspects of the plan. These reports often follow a detailed study, or a one or two day overview may be all that is required by the venture capital firm. They will assess and review the following points concerning the company and its management: - Management information systems - Forecasting techniques and accuracy of past forecasting - Assumptions on which financial assumptions are based - The latest available management accounts, including the company's cash/debtor positions - Bank facilities and leasing agreements - Pensions funding - Employee contracts, etc. The due diligence review aims to support or contradict the venture capital firm's own initial impressions of the business plan formed during the initial stage. References may also be taken up on the company (eg. with suppliers, customers, and bankers).
0
nhận xét
Leasing
Nhãn: Accounting
asset finance - introduction to hire purchase and leasing
Introduction
The acquisition of assets - particularly expensive capital equipment - is a major commitment for many businesses. How that acquisition is funded requires careful planning.
Rather than pay for the asset outright using cash, it can often make sense for businesses to look for ways of spreading the cost of acquiring an asset, to coincide with the timing of the revenue generated by the business.The most common sources of medium term finance for investment in capital assets are Hire Purchase and Leasing.
Leasing and hire purchase are financial facilities which allow a business to use an asset over a fixed period, in return for regular payments. The business customer chooses the equipment it requires and the finance company buys it on behalf of the business.
Many kinds of business asset are suitable for financing using hire purchase or leasing, including:- Plant and machinery- Business cars- Commercial vehicles- Agricultural equipment- Hotel equipment- Medical and dental equipment- Computers, including software packages -Office equipment
Hire purchase
With a hire purchase agreement, after all the payments have been made, the business customer becomes the owner of the equipment. This ownership transfer either automatically or on payment of an option to purchase fee.
For tax purposes, from the beginning of the agreement the business customer is treated as the owner of the equipment and so can claim capital allowances. Capital allowances can be a significant tax incentive for businesses to invest in new plant and machinery or to upgrade information systems.
Under a hire purchase agreement, the business customer is normally responsible for maintenance of the equipment.
Leasing
The fundamental characteristic of a lease is that ownership never passes to the business customer.
Instead, the leasing company claims the capital allowances and passes some of the benefit on to the business customer, by way of reduced rental charges.
The business customer can generally deduct the full cost of lease rentals from taxable income, as a trading expense.
As with hire purchase, the business customer will normally be responsible for maintenance of the equipment.
There are a variety of types of leasing arrangement:
Finance Leasing
The finance lease or 'full payout lease' is closest to the hire purchase alternative. The leasing company recovers the full cost of the equipment, plus charges, over the period of the lease.
Although the business customer does not own the equipment, they have most of the 'risks and rewards' associated with ownership. They are responsible for maintaining and insuring the asset and must show the leased asset on their balance sheet as a capital item.
When the lease period ends, the leasing company will usually agree to a secondary lease period at significantly reduced payments. Alternatively, if the business wishes to stop using the equipment, it may be sold second-hand to an unrelated third party. The business arranges the sale on behalf of the leasing company and obtains the bulk of the sale proceeds.
Operating Leasing
If a business needs a piece of equipment for a shorter time, then operating leasing may be the answer. The leasing company will lease the equipment, expecting to sell it secondhand at the end of the lease, or to lease it again to someone else. It will, therefore, not need to recover the full cost of the equipment through the lease rentals.
This type of leasing is common for equipment where there is a well-established secondhand market (e.g. cars and construction equipment). The lease period will usually be for two to three years, although it may be much longer, but is always less than the working life of the machine.
Assets financed under operating leases are not shown as assets on the balance sheet. Instead, the entire operating lease cost is treated as a cost in the profit and loss account.
Contract Hire
Contract hire is a form of operating lease and it is often used for vehicles.
The leasing company undertakes some responsibility for the management and maintenance of the vehicles. Services can include regular maintenance and repair costs, replacement of tyres and batteries, providing replacement vehicles, roadside assistance and recovery services and payment of the vehicle licences. 0 nhận xét
Introduction
The acquisition of assets - particularly expensive capital equipment - is a major commitment for many businesses. How that acquisition is funded requires careful planning.
Rather than pay for the asset outright using cash, it can often make sense for businesses to look for ways of spreading the cost of acquiring an asset, to coincide with the timing of the revenue generated by the business.The most common sources of medium term finance for investment in capital assets are Hire Purchase and Leasing.
Leasing and hire purchase are financial facilities which allow a business to use an asset over a fixed period, in return for regular payments. The business customer chooses the equipment it requires and the finance company buys it on behalf of the business.
Many kinds of business asset are suitable for financing using hire purchase or leasing, including:- Plant and machinery- Business cars- Commercial vehicles- Agricultural equipment- Hotel equipment- Medical and dental equipment- Computers, including software packages -Office equipment
Hire purchase
With a hire purchase agreement, after all the payments have been made, the business customer becomes the owner of the equipment. This ownership transfer either automatically or on payment of an option to purchase fee.
For tax purposes, from the beginning of the agreement the business customer is treated as the owner of the equipment and so can claim capital allowances. Capital allowances can be a significant tax incentive for businesses to invest in new plant and machinery or to upgrade information systems.
Under a hire purchase agreement, the business customer is normally responsible for maintenance of the equipment.
Leasing
The fundamental characteristic of a lease is that ownership never passes to the business customer.
Instead, the leasing company claims the capital allowances and passes some of the benefit on to the business customer, by way of reduced rental charges.
The business customer can generally deduct the full cost of lease rentals from taxable income, as a trading expense.
As with hire purchase, the business customer will normally be responsible for maintenance of the equipment.
There are a variety of types of leasing arrangement:
Finance Leasing
The finance lease or 'full payout lease' is closest to the hire purchase alternative. The leasing company recovers the full cost of the equipment, plus charges, over the period of the lease.
Although the business customer does not own the equipment, they have most of the 'risks and rewards' associated with ownership. They are responsible for maintaining and insuring the asset and must show the leased asset on their balance sheet as a capital item.
When the lease period ends, the leasing company will usually agree to a secondary lease period at significantly reduced payments. Alternatively, if the business wishes to stop using the equipment, it may be sold second-hand to an unrelated third party. The business arranges the sale on behalf of the leasing company and obtains the bulk of the sale proceeds.
Operating Leasing
If a business needs a piece of equipment for a shorter time, then operating leasing may be the answer. The leasing company will lease the equipment, expecting to sell it secondhand at the end of the lease, or to lease it again to someone else. It will, therefore, not need to recover the full cost of the equipment through the lease rentals.
This type of leasing is common for equipment where there is a well-established secondhand market (e.g. cars and construction equipment). The lease period will usually be for two to three years, although it may be much longer, but is always less than the working life of the machine.
Assets financed under operating leases are not shown as assets on the balance sheet. Instead, the entire operating lease cost is treated as a cost in the profit and loss account.
Contract Hire
Contract hire is a form of operating lease and it is often used for vehicles.
The leasing company undertakes some responsibility for the management and maintenance of the vehicles. Services can include regular maintenance and repair costs, replacement of tyres and batteries, providing replacement vehicles, roadside assistance and recovery services and payment of the vehicle licences. 0 nhận xét
Acounting
Nhãn: Acounting
introduction to accounting
It is not easy to provide a concise definition of accounting since the word has a broad application within businesses and applications.
The American Accounting Association define accounting as follows:
"the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by users of the information!.
This definition is a good place to start. Let's look at the key words in the above definition:
- It suggests that accounting is about providing information to others. Accounting information is economic information - it relates to the financial or economic activities of the business or organisation.
- Accounting information needs to be identified and measured. This is done by way of a "set of accounts", based on a system of accounting known as double-entry bookkeeping. The accounting system identifies and records "accounting transactions".
- The "measurement" of accounting information is not a straight-forward process. it involves making judgements about the value of assets owned by a business or liabilities owed by a business. it is also about accurately measuring how much profit or loss has been made by a business in a particular period. As we will see, the measurement of accounting information often requires subjective judgement to come to a conclusion
- The definition identifies the need for accounting information to be communicated. The way in which this communication is achieved may vary. There are several forms of accounting communication (e.g. annual report and accounts, management accounting reports) each of which serve a slightly different purpose. The communication need is about understanding who needs the accounting information, and what they need to know!
Accounting information is communicated using "financial statements"
What is the purpose of financial statements?
There are two main purposes of financial statements:
(1) To report on the financial position of an entity (e.g. a business, an organisation);
(2) To show how the entity has performed (financially) over a particularly period of time (an "accounting period").
The most common measurement of "performance" is profit.
It is important to understand that financial statements can be historical or relate to the future.
Accountability
Accounting is about ACCOUNTABILTY
Most organisations are externally accountable in some way for their actions and activities. They will produce reports on their activities that will reflect their objectives and the people to whom they are accountable.
The table below provides examples of different types of organisations and how accountability is linked to their differing organisational objectives:
Organisation
Objectives
Accountable to (examples)
Private or public company
- Making of profit- Creation of wealth
- Shareholders- Other stakeholders (e.g. employees, customers, suppliers)
- Achievement of charitable aims- Maximise spending on activities
- Charity commissioners- Donors
Local Authorities
- Provision of local services- Optimal allocation of spending budget
- Local electorate- Government departments
Public services (e.g. transport, health) (e.g. Natinoal Healthe Servise, Prision Servise)
- Provision of public service (often required by law)- High quality and reliability of services
- Government ministers- Consumers
Quasi-governmental agencies
- Regulation or instigation of some public action- Coordination of public sector investments
- Government ministers- Consumers
All of the above organisations have a significant roles to play in society and have multiple stakeholders to whom they are accountable.
All require systems of financial management to enable them to produce accounting information.
How accounting information helps businesses be accountable
As we have said in our introductory definition, accounting is essentially an "information process" that serves several purposes:
- Providing a record of assets owned, amounts owed to others and monies invested;
- Providing reports showing the financial position of an organisation and the profitability of its operations
- Helps management actually manage the organisation
- Provides a way of measuring an organisation's effectiveness (and that of its separate parts and management)
- Helps stakeholders monitor an organisations activities and performance
- Enables potential investors or funders to evaluate an organisation and make decisions
There are many potential users of accounting Information, including shareholders, lenders, customers, suppliers, government departments (e.g. Inland Revenue), employees and their organisations, and society at large. Anyone with an interest in the performance and activities of an organisation is traditionally called a stakeholder.
For a business or organisation to communicate its results and position to stakeholders, it needs a language that is understood by all in common. Hence, accounting has come to be known as the "language of business"
There are two broad types of accounting information:
(1) Financial Accounts: geared toward external users of accounting information (2) Management Accounts: aimed more at internal users of accounting information
Although there is a difference in the type of information presented in financial and management accounts, the underlying objective is the same - to satisfy the information needs of the user. These needs can be described in terms of the following overall information objectives:
Collection
Collection in money terms of information relating to transactions that have resulted from business operations
Recording and Classifying
Recording and classifying data into a permanent and logical form. This is usually referred to as "Book-keeping"
Summarising
Summarising data to produce statements and reports that will be useful to the various users of accounting information - both external and internal
Interpreting and Communicating
Interpreting and communicating the performance of the business to the management and its owners
Forecasting and Planning
Forecasting and planning for future operation of the business by providing management with evaluations of the viability of proposed operations. The key forecasting and planning tool is the "Budget"
The process by which accounting information is collected, reported, interpreted and actioned is called "Financial Management". Taking a commercial business as the most common organisational structure, the key objectives of financial management would be to:
(1) Create wealth for the business(2) Generate cash, and(3) Provide an adequate return on investment bearing in mind the risks that the business is taking and the resources invested
In preparing accounting information, care should be taken to ensure that the information presents an accurate and true view of the business performance and position. To impose some order on what is a subjective task, accounting has adopted certain conventions and concepts which should be applied in preparing accounts.
For financial accounts, the regulation or control of what kind of information is prepared and presented goes much further. UK and international companies are required to comply with a wide range of Accounting Standards which define the way in which business transactions are disclosed and reported. These are applied by businesses through their Accounting Policies.
The main financial accounting statements
The purpose of financial accounting statements is mainly to show the financial position of a business at a particular point in time and to show how that business has performed over a specific period.
The three main financial accounting statements that help achieve this aim are:
(1) The profit and loss account for the reporting period
(2) A balance sheet for the business at the end of the reporting period
(3) A cash flow statement for the reporting period
A balance sheet shows at a particular point in time what resources are owned by a business ("assets") and what it owes to other parties ("liabilities"). It also shows how much has been invested in the business and what the sources of that investment finance were.
It is often helpful to think of a balance sheet as a "snap-shot" of the business - a picture of the financial position of the business at a specific point. Whilst this is a useful picture to have, every time an accounting transaction takes place, the "snap-shot" picture will have changed.
By contrast, the profit and loss account provides a perspective on a longer time-period. If the balance sheet is a "digital snap-shot" of the business, then think of the profit and loss account as the "DVD" of the business' activities. The story of what financial transactions took place in a particular period - and (most importantly) what the overall result of those transactions was.
Not surprisingly, the profit and loss account measures "profit".
What is profit?
Profit is the amount by which sales revenue (also known as "turnover" or "income") exceeds "expenses" (or "costs") for the period being measured. 0 nhận xét
It is not easy to provide a concise definition of accounting since the word has a broad application within businesses and applications.
The American Accounting Association define accounting as follows:
"the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by users of the information!.
This definition is a good place to start. Let's look at the key words in the above definition:
- It suggests that accounting is about providing information to others. Accounting information is economic information - it relates to the financial or economic activities of the business or organisation.
- Accounting information needs to be identified and measured. This is done by way of a "set of accounts", based on a system of accounting known as double-entry bookkeeping. The accounting system identifies and records "accounting transactions".
- The "measurement" of accounting information is not a straight-forward process. it involves making judgements about the value of assets owned by a business or liabilities owed by a business. it is also about accurately measuring how much profit or loss has been made by a business in a particular period. As we will see, the measurement of accounting information often requires subjective judgement to come to a conclusion
- The definition identifies the need for accounting information to be communicated. The way in which this communication is achieved may vary. There are several forms of accounting communication (e.g. annual report and accounts, management accounting reports) each of which serve a slightly different purpose. The communication need is about understanding who needs the accounting information, and what they need to know!
Accounting information is communicated using "financial statements"
What is the purpose of financial statements?
There are two main purposes of financial statements:
(1) To report on the financial position of an entity (e.g. a business, an organisation);
(2) To show how the entity has performed (financially) over a particularly period of time (an "accounting period").
The most common measurement of "performance" is profit.
It is important to understand that financial statements can be historical or relate to the future.
Accountability
Accounting is about ACCOUNTABILTY
Most organisations are externally accountable in some way for their actions and activities. They will produce reports on their activities that will reflect their objectives and the people to whom they are accountable.
The table below provides examples of different types of organisations and how accountability is linked to their differing organisational objectives:
Organisation
Objectives
Accountable to (examples)
Private or public company
- Making of profit- Creation of wealth
- Shareholders- Other stakeholders (e.g. employees, customers, suppliers)
- Achievement of charitable aims- Maximise spending on activities
- Charity commissioners- Donors
Local Authorities
- Provision of local services- Optimal allocation of spending budget
- Local electorate- Government departments
Public services (e.g. transport, health) (e.g. Natinoal Healthe Servise, Prision Servise)
- Provision of public service (often required by law)- High quality and reliability of services
- Government ministers- Consumers
Quasi-governmental agencies
- Regulation or instigation of some public action- Coordination of public sector investments
- Government ministers- Consumers
All of the above organisations have a significant roles to play in society and have multiple stakeholders to whom they are accountable.
All require systems of financial management to enable them to produce accounting information.
How accounting information helps businesses be accountable
As we have said in our introductory definition, accounting is essentially an "information process" that serves several purposes:
- Providing a record of assets owned, amounts owed to others and monies invested;
- Providing reports showing the financial position of an organisation and the profitability of its operations
- Helps management actually manage the organisation
- Provides a way of measuring an organisation's effectiveness (and that of its separate parts and management)
- Helps stakeholders monitor an organisations activities and performance
- Enables potential investors or funders to evaluate an organisation and make decisions
There are many potential users of accounting Information, including shareholders, lenders, customers, suppliers, government departments (e.g. Inland Revenue), employees and their organisations, and society at large. Anyone with an interest in the performance and activities of an organisation is traditionally called a stakeholder.
For a business or organisation to communicate its results and position to stakeholders, it needs a language that is understood by all in common. Hence, accounting has come to be known as the "language of business"
There are two broad types of accounting information:
(1) Financial Accounts: geared toward external users of accounting information (2) Management Accounts: aimed more at internal users of accounting information
Although there is a difference in the type of information presented in financial and management accounts, the underlying objective is the same - to satisfy the information needs of the user. These needs can be described in terms of the following overall information objectives:
Collection
Collection in money terms of information relating to transactions that have resulted from business operations
Recording and Classifying
Recording and classifying data into a permanent and logical form. This is usually referred to as "Book-keeping"
Summarising
Summarising data to produce statements and reports that will be useful to the various users of accounting information - both external and internal
Interpreting and Communicating
Interpreting and communicating the performance of the business to the management and its owners
Forecasting and Planning
Forecasting and planning for future operation of the business by providing management with evaluations of the viability of proposed operations. The key forecasting and planning tool is the "Budget"
The process by which accounting information is collected, reported, interpreted and actioned is called "Financial Management". Taking a commercial business as the most common organisational structure, the key objectives of financial management would be to:
(1) Create wealth for the business(2) Generate cash, and(3) Provide an adequate return on investment bearing in mind the risks that the business is taking and the resources invested
In preparing accounting information, care should be taken to ensure that the information presents an accurate and true view of the business performance and position. To impose some order on what is a subjective task, accounting has adopted certain conventions and concepts which should be applied in preparing accounts.
For financial accounts, the regulation or control of what kind of information is prepared and presented goes much further. UK and international companies are required to comply with a wide range of Accounting Standards which define the way in which business transactions are disclosed and reported. These are applied by businesses through their Accounting Policies.
The main financial accounting statements
The purpose of financial accounting statements is mainly to show the financial position of a business at a particular point in time and to show how that business has performed over a specific period.
The three main financial accounting statements that help achieve this aim are:
(1) The profit and loss account for the reporting period
(2) A balance sheet for the business at the end of the reporting period
(3) A cash flow statement for the reporting period
A balance sheet shows at a particular point in time what resources are owned by a business ("assets") and what it owes to other parties ("liabilities"). It also shows how much has been invested in the business and what the sources of that investment finance were.
It is often helpful to think of a balance sheet as a "snap-shot" of the business - a picture of the financial position of the business at a specific point. Whilst this is a useful picture to have, every time an accounting transaction takes place, the "snap-shot" picture will have changed.
By contrast, the profit and loss account provides a perspective on a longer time-period. If the balance sheet is a "digital snap-shot" of the business, then think of the profit and loss account as the "DVD" of the business' activities. The story of what financial transactions took place in a particular period - and (most importantly) what the overall result of those transactions was.
Not surprisingly, the profit and loss account measures "profit".
What is profit?
Profit is the amount by which sales revenue (also known as "turnover" or "income") exceeds "expenses" (or "costs") for the period being measured. 0 nhận xét
accounting concept
Nhãn: Accounting
In drawing up accounting statements, whether they are external "financial accounts" or internally-focused "management accounts", a clear objective has to be that the accounts fairly reflect the true "substance" of the business and the results of its operation.
The theory of accounting has, therefore, developed the concept of a "true and fair view". The true and fair view is applied in ensuring and assessing whether accounts do indeed portray accurately the business' activities.
To support the application of the "true and fair view", accounting has adopted certain concepts and conventions which help to ensure that accounting information is presented accurately and consistently.
Accounting Conventions
The most commonly encountered convention is the "historical cost convention". This requires transactions to be recorded at the price ruling at the time, and for assets to be valued at their original cost.
Under the "historical cost convention", therefore, no account is taken of changing prices in the economy.
The other conventions you will encounter in a set of accounts can be summarised as follows:
Monetary measurement
Accountants do not account for items unless they can be quantified in monetary terms. Items that are not accounted for (unless someone is prepared to pay something for them) include things like workforce skill, morale, market leadership, brand recognition, quality of management etc.
Separate Entity
This convention seeks to ensure that private transactions and matters relating to the owners of a business are segregated from transactions that relate to the business.
Realisation
With this convention, accounts recognise transactions (and any profits arising from them) at the point of sale or transfer of legal ownership - rather than just when cash actually changes hands. For example, a company that makes a sale to a customer can recognise that sale when the transaction is legal - at the point of contract. The actual payment due from the customer may not arise until several weeks (or months) later - if the customer has been granted some credit terms.
Materiality
An important convention. As we can see from the application of accounting standards and accounting policies, the preparation of accounts involves a high degree of judgement. Where decisions are required about the appropriateness of a particular accounting judgement, the "materiality" convention suggests that this should only be an issue if the judgement is "significant" or "material" to a user of the accounts. The concept of "materiality" is an important issue for auditors of financial accounts.
Accounting Concepts
Four important accounting concepts underpin the preparation of any set of accounts:
Going Concern
Accountants assume, unless there is evidence to the contrary, that a company is not going broke. This has important implications for the valuation of assets and liabilities.
Consistency
Transactions and valuation methods are treated the same way from year to year, or period to period. Users of accounts can, therefore, make more meaningful comparisons of financial performance from year to year. Where accounting policies are changed, companies are required to disclose this fact and explain the impact of any change.
Prudence
Profits are not recognised until a sale has been completed. In addition, a cautious view is taken for future problems and costs of the business (the are "provided for" in the accounts" as soon as their is a reasonable chance that such costs will be incurred in the future.
Matching (or "Accruals")
Income should be properly "matched" with the expenses of a given accounting period.
Key Characteristics of Accounting Information
There is general agreement that, before it can be regarded as useful in satisfying the needs of various user groups, accounting information should satisfy the following criteria:
Criteria
What it means for the preparation of accounting information
Understandability
This implies the expression, with clarity, of accounting information in such a way that it will be understandable to users - who are generally assumed to have a reasonable knowledge of business and economic activities
Relevance
This implies that, to be useful, accounting information must assist a user to form, confirm or maybe revise a view - usually in the context of making a decision (e.g. should I invest, should I lend money to this business? Should I work for this business?)
Consistency
This implies consistent treatment of similar items and application of accounting policies
Comparability
This implies the ability for users to be able to compare similar companies in the same industry group and to make comparisons of performance over time. Much of the work that goes into setting accounting standards is based around the need for comparability.
Reliability
This implies that the accounting information that is presented is truthful, accurate, complete (nothing significant missed out) and capable of being verified (e.g. by a potential investor).
Objectivity
This implies that accounting information is prepared and reported in a "neutral" way. In other words, it is not biased towards a particular user group or vested interest 0 nhận xét
The theory of accounting has, therefore, developed the concept of a "true and fair view". The true and fair view is applied in ensuring and assessing whether accounts do indeed portray accurately the business' activities.
To support the application of the "true and fair view", accounting has adopted certain concepts and conventions which help to ensure that accounting information is presented accurately and consistently.
Accounting Conventions
The most commonly encountered convention is the "historical cost convention". This requires transactions to be recorded at the price ruling at the time, and for assets to be valued at their original cost.
Under the "historical cost convention", therefore, no account is taken of changing prices in the economy.
The other conventions you will encounter in a set of accounts can be summarised as follows:
Monetary measurement
Accountants do not account for items unless they can be quantified in monetary terms. Items that are not accounted for (unless someone is prepared to pay something for them) include things like workforce skill, morale, market leadership, brand recognition, quality of management etc.
Separate Entity
This convention seeks to ensure that private transactions and matters relating to the owners of a business are segregated from transactions that relate to the business.
Realisation
With this convention, accounts recognise transactions (and any profits arising from them) at the point of sale or transfer of legal ownership - rather than just when cash actually changes hands. For example, a company that makes a sale to a customer can recognise that sale when the transaction is legal - at the point of contract. The actual payment due from the customer may not arise until several weeks (or months) later - if the customer has been granted some credit terms.
Materiality
An important convention. As we can see from the application of accounting standards and accounting policies, the preparation of accounts involves a high degree of judgement. Where decisions are required about the appropriateness of a particular accounting judgement, the "materiality" convention suggests that this should only be an issue if the judgement is "significant" or "material" to a user of the accounts. The concept of "materiality" is an important issue for auditors of financial accounts.
Accounting Concepts
Four important accounting concepts underpin the preparation of any set of accounts:
Going Concern
Accountants assume, unless there is evidence to the contrary, that a company is not going broke. This has important implications for the valuation of assets and liabilities.
Consistency
Transactions and valuation methods are treated the same way from year to year, or period to period. Users of accounts can, therefore, make more meaningful comparisons of financial performance from year to year. Where accounting policies are changed, companies are required to disclose this fact and explain the impact of any change.
Prudence
Profits are not recognised until a sale has been completed. In addition, a cautious view is taken for future problems and costs of the business (the are "provided for" in the accounts" as soon as their is a reasonable chance that such costs will be incurred in the future.
Matching (or "Accruals")
Income should be properly "matched" with the expenses of a given accounting period.
Key Characteristics of Accounting Information
There is general agreement that, before it can be regarded as useful in satisfying the needs of various user groups, accounting information should satisfy the following criteria:
Criteria
What it means for the preparation of accounting information
Understandability
This implies the expression, with clarity, of accounting information in such a way that it will be understandable to users - who are generally assumed to have a reasonable knowledge of business and economic activities
Relevance
This implies that, to be useful, accounting information must assist a user to form, confirm or maybe revise a view - usually in the context of making a decision (e.g. should I invest, should I lend money to this business? Should I work for this business?)
Consistency
This implies consistent treatment of similar items and application of accounting policies
Comparability
This implies the ability for users to be able to compare similar companies in the same industry group and to make comparisons of performance over time. Much of the work that goes into setting accounting standards is based around the need for comparability.
Reliability
This implies that the accounting information that is presented is truthful, accurate, complete (nothing significant missed out) and capable of being verified (e.g. by a potential investor).
Objectivity
This implies that accounting information is prepared and reported in a "neutral" way. In other words, it is not biased towards a particular user group or vested interest 0 nhận xét
Profit and loss
Nhãn: Accounting
Richard Bowett introduces the important concept of the profit and loss account:
Introduction - the Meaning of Profit
The starting point in understanding the profit and loss account is to be clear about the meaning of "profit".
Profit is the incentive for business; without profit people wouldn't’t bother. Profit is the reward for taking risk; generally speaking high risk = high reward (or loss if it goes wrong) and low risk = low reward. People won’t take risks without reward. All business is risky (some more than others) so no reward means no business. No business means no jobs, no salaries and no goods and services.
This is an important but simple point. It is often forgotten when people complain about excessive profits and rewards, or when there are appeals for more taxes to pay for eg more policemen on the streets.
Profit also has an important role in allocating resources (land, labour, capital and enterprise). Put simply, falling profits (as in a business coming to an end eg black-and-white TVs) signal that resources should be taken out of that business and put into another one; rising profits signal that resources should be moved into this business. Without these signals we are left to guess as to what is the best use of society’s scarce resources.
People sometimes say that government should decide (or at least decide more often) how much of this or that to make, but the evidence is that governments usually do a bad job of this e.g. the Dome.
The Task of Accounting - Measuring Profit
The main task of accounts, therefore, is to monitor and measure profits.
Profit = Revenue less Costs
So monitoring profit also means monitoring and measuring revenue and costs. There are two parts to this:-
1) Recording financial data. This is the ‘book-keeping’ part of accounting.
2) Measuring the result. This is the ‘financial’ part of accounting. If we say ‘profits are high’ this begs the question ‘high compared to what?’ (You can look at this idea in more detail when covering Ratio Analysis)
Profits are ‘spent’ in three ways.
1) Retained for future investment and growth.2) Returned to owners eg a ‘dividend’.3) Paid as tax.
Parts of the Profit and Loss Account
The Profit & Loss Account aims to monitor profit. It has three parts.
1) The Trading Account.
This records the money in (revenue) and out (costs) of the business as a result of the business’ ‘trading’ ie buying and selling. This might be buying raw materials and selling finished goods; it might be buying goods wholesale and selling them retail. The figure at the end of this section is the Gross Profit.
2) The Profit and Loss Account proper
This starts with the Gross Profit and adds to it any further costs and revenues, including overheads. These further costs and revenues are from any other activities not directly related to trading. An example is income received from investments.
3) The Appropriation Account. This shows how the profit is ‘appropriated’ or divided between the three uses mentioned above.
Uses of the Profit and Loss Account.
1) The main use is to monitor and measure profit, as discussed above. This assumes that the information recording is accurate. Significant problems can arise if the information is inaccurate, either through incompetence or deliberate fraud.
2) Once the profit(loss) has been accurately calculated, this can then be used for comparison ie judging how well the business is doing compared to itself in the past, compared to the managers’ plans and compared to other businesses.
3) There are ways to ‘fix’ accounts. Internal accounts are rarely ‘fixed’, because there is little point in the managers fooling themselves (unless fraud is going on) but public accounts are routinely ‘fixed’ to create a good impression out to the outside world. If you understand accounts, you can usually (not always) spot these ‘fixes’ and take them out to get a true picture.
Example Profit and Loss Account:
An example profit and loss account is provided below:
£'000 £'000
Revenue 12,500 10,000
Cost of Sales 7,500 6,000
Gross Profit 5,000 4,000
Gross profit margin (gross profit / revenue) 40% 40%
Operating Costs
Sales and distribution 1,260 1,010
Finance and administration 570 555
Other overheads 970 895
Depreciation 235 210
Total Operating Costs 3,035 2,670
Operating Profit (gross profit less operating costs) 1,965 1,330
Operating profit margin (operating profit / revenue) 15.7% 13.3%
Interest (450) (475)
Profit before Tax 1,515 855
Taxation (455) (255)
Profit after Tax 1,060 600
Dividends 650 400
Retained Profits 410 200 0 nhận xét
Introduction - the Meaning of Profit
The starting point in understanding the profit and loss account is to be clear about the meaning of "profit".
Profit is the incentive for business; without profit people wouldn't’t bother. Profit is the reward for taking risk; generally speaking high risk = high reward (or loss if it goes wrong) and low risk = low reward. People won’t take risks without reward. All business is risky (some more than others) so no reward means no business. No business means no jobs, no salaries and no goods and services.
This is an important but simple point. It is often forgotten when people complain about excessive profits and rewards, or when there are appeals for more taxes to pay for eg more policemen on the streets.
Profit also has an important role in allocating resources (land, labour, capital and enterprise). Put simply, falling profits (as in a business coming to an end eg black-and-white TVs) signal that resources should be taken out of that business and put into another one; rising profits signal that resources should be moved into this business. Without these signals we are left to guess as to what is the best use of society’s scarce resources.
People sometimes say that government should decide (or at least decide more often) how much of this or that to make, but the evidence is that governments usually do a bad job of this e.g. the Dome.
The Task of Accounting - Measuring Profit
The main task of accounts, therefore, is to monitor and measure profits.
Profit = Revenue less Costs
So monitoring profit also means monitoring and measuring revenue and costs. There are two parts to this:-
1) Recording financial data. This is the ‘book-keeping’ part of accounting.
2) Measuring the result. This is the ‘financial’ part of accounting. If we say ‘profits are high’ this begs the question ‘high compared to what?’ (You can look at this idea in more detail when covering Ratio Analysis)
Profits are ‘spent’ in three ways.
1) Retained for future investment and growth.2) Returned to owners eg a ‘dividend’.3) Paid as tax.
Parts of the Profit and Loss Account
The Profit & Loss Account aims to monitor profit. It has three parts.
1) The Trading Account.
This records the money in (revenue) and out (costs) of the business as a result of the business’ ‘trading’ ie buying and selling. This might be buying raw materials and selling finished goods; it might be buying goods wholesale and selling them retail. The figure at the end of this section is the Gross Profit.
2) The Profit and Loss Account proper
This starts with the Gross Profit and adds to it any further costs and revenues, including overheads. These further costs and revenues are from any other activities not directly related to trading. An example is income received from investments.
3) The Appropriation Account. This shows how the profit is ‘appropriated’ or divided between the three uses mentioned above.
Uses of the Profit and Loss Account.
1) The main use is to monitor and measure profit, as discussed above. This assumes that the information recording is accurate. Significant problems can arise if the information is inaccurate, either through incompetence or deliberate fraud.
2) Once the profit(loss) has been accurately calculated, this can then be used for comparison ie judging how well the business is doing compared to itself in the past, compared to the managers’ plans and compared to other businesses.
3) There are ways to ‘fix’ accounts. Internal accounts are rarely ‘fixed’, because there is little point in the managers fooling themselves (unless fraud is going on) but public accounts are routinely ‘fixed’ to create a good impression out to the outside world. If you understand accounts, you can usually (not always) spot these ‘fixes’ and take them out to get a true picture.
Example Profit and Loss Account:
An example profit and loss account is provided below:
£'000 £'000
Revenue 12,500 10,000
Cost of Sales 7,500 6,000
Gross Profit 5,000 4,000
Gross profit margin (gross profit / revenue) 40% 40%
Operating Costs
Sales and distribution 1,260 1,010
Finance and administration 570 555
Other overheads 970 895
Depreciation 235 210
Total Operating Costs 3,035 2,670
Operating Profit (gross profit less operating costs) 1,965 1,330
Operating profit margin (operating profit / revenue) 15.7% 13.3%
Interest (450) (475)
Profit before Tax 1,515 855
Taxation (455) (255)
Profit after Tax 1,060 600
Dividends 650 400
Retained Profits 410 200 0 nhận xét
Balance sheet
Nhãn: Accounting
In our introduction to the methods available to calculate depreciation, we suggested that there are two main methods that can be used:
- Straight- line depreciation
- Reducing balance method
We emphasised the point that these two methods simply provide an alternative way of allocating the total depreciation charge over several accounting periods. The total depreciation charge using either method will be the same over the total useful economic life of the asset.
To illustrate the straight line depreciation method, we have calculated the depreciation charge for the following asset:
Data
A business purchases a new machine for £75,000 on 1 January 2003. It is estimated that the machine will have a residual value of £10,000 and a useful economic life of five years. The business has an accounting year end of 31 December.
Straight line depreciation method
Using the straight line depreciation method, the calculation of the annual depreciation charge is as follows:
Dpn = (C- R)/ N
where:
Dpn = Annual straight-line depreciation charge
C = Cost of the assetR = Residual value of the assetN = Useful economic life of the asset (years)
So the calculation is:
Dpn = (£75,000 - £10,000) / 5
Dpn = £13,000
in the accounts of the business a depreciation charge of £13,000 will be expensed in the profit and loss account for each of the five years of the asset's useful economic life.
In the annual balance sheet, the machine would be shown at its original cost less the total accumulated depreciation for the asset to date.
Example of how this would be disclosed in the accounts
At the end of the third year of ownership of the machine, the financial accounts of the business would include the following items in relation to the machine:
In the Profit and Loss Account:
Depreciation of Machinery - Charge: £13,000
In the Balance Sheet at 31 December 2005:
Machine at Cost 75,000
less: Accumulated Depreciation 39,000
Machine at net book value 36,000
The figure for accumulated depreciation of £39,000 at 31 December 2005 represents three years' worth of depreciation at £13,000 per year.
The cost of the machine (£75,000) less the accumulated depreciation charged on the machine (£39,000) is known as the "written-down value" ("WDV") or "net book value" ("NBV").
it should be noted that WDV or NBV is simply an accounting value that is the result of a decision about which method is used to calculate depreciation. It does not necessarily mean that the machine is actually worth more or less than the WDV or NBV. 0 nhận xét
- Straight- line depreciation
- Reducing balance method
We emphasised the point that these two methods simply provide an alternative way of allocating the total depreciation charge over several accounting periods. The total depreciation charge using either method will be the same over the total useful economic life of the asset.
To illustrate the straight line depreciation method, we have calculated the depreciation charge for the following asset:
Data
A business purchases a new machine for £75,000 on 1 January 2003. It is estimated that the machine will have a residual value of £10,000 and a useful economic life of five years. The business has an accounting year end of 31 December.
Straight line depreciation method
Using the straight line depreciation method, the calculation of the annual depreciation charge is as follows:
Dpn = (C- R)/ N
where:
Dpn = Annual straight-line depreciation charge
C = Cost of the assetR = Residual value of the assetN = Useful economic life of the asset (years)
So the calculation is:
Dpn = (£75,000 - £10,000) / 5
Dpn = £13,000
in the accounts of the business a depreciation charge of £13,000 will be expensed in the profit and loss account for each of the five years of the asset's useful economic life.
In the annual balance sheet, the machine would be shown at its original cost less the total accumulated depreciation for the asset to date.
Example of how this would be disclosed in the accounts
At the end of the third year of ownership of the machine, the financial accounts of the business would include the following items in relation to the machine:
In the Profit and Loss Account:
Depreciation of Machinery - Charge: £13,000
In the Balance Sheet at 31 December 2005:
Machine at Cost 75,000
less: Accumulated Depreciation 39,000
Machine at net book value 36,000
The figure for accumulated depreciation of £39,000 at 31 December 2005 represents three years' worth of depreciation at £13,000 per year.
The cost of the machine (£75,000) less the accumulated depreciation charged on the machine (£39,000) is known as the "written-down value" ("WDV") or "net book value" ("NBV").
it should be noted that WDV or NBV is simply an accounting value that is the result of a decision about which method is used to calculate depreciation. It does not necessarily mean that the machine is actually worth more or less than the WDV or NBV. 0 nhận xét
Annual Report
Nhãn: Accounting
• An annual report is a document produced annually by companies designed to portray a true and fair view of the company’s annual performance, with audited financial statements prepared in accordance with company law and other regulatory requirements, and also containing other non-financial information.• The Companies Act 1985/9 requires companies to publish their annual report and accounts.• It should include:– A balance sheet– A profit and loss account– A cash flow statement– A Directors Report
Stakeholders in the annual report• Shareholders (the owners of the business).• Potential shareholders.• Managers and employees.• Creditors and potential creditors.• Suppliers – especially if the supply goods on credit.• Employees and their trade unions.• The government – for tax purposes.
Functions of the annual report• The stewardship and accountability function– Reporting to shareholders.• The decision making function– To provide information about performance and changes in the financial position of an enterprise that is useful to a wide range of users in making economic decisions.– Providing users, especially shareholders with financial information so that they can make decisions such as buying or selling shares.• The public relations function– The annual report is an opportunity to publicise the corporate image
A true and fair view• Directors are responsible for the preparation of the accounts which must give a true and fair view.• A true and fair view is one where accounts reflect what has happened and do not mislead the readers.• The accounts must be prepared in accordance with relevant accounting standards.
Information to be included • The rules governing the content of the annual report are derived from:• Statute law - the Companies Act • Accounting standards• Stock Exchange rules• Codes of best practice in corporate governance.
Companies Act 1985/9• Directors have stewardship of limited companies.• Directors are required to publish accounts which show a true and fair view of the company’s financial position.• Accounts must be sent to:– All shareholders– All debenture holders– The Registrar of Companies at Companies House.– This must be done within 10 months of the year-end for a private company and within 7 months of the year end in the case of a public company 0 nhận xét
Stakeholders in the annual report• Shareholders (the owners of the business).• Potential shareholders.• Managers and employees.• Creditors and potential creditors.• Suppliers – especially if the supply goods on credit.• Employees and their trade unions.• The government – for tax purposes.
Functions of the annual report• The stewardship and accountability function– Reporting to shareholders.• The decision making function– To provide information about performance and changes in the financial position of an enterprise that is useful to a wide range of users in making economic decisions.– Providing users, especially shareholders with financial information so that they can make decisions such as buying or selling shares.• The public relations function– The annual report is an opportunity to publicise the corporate image
A true and fair view• Directors are responsible for the preparation of the accounts which must give a true and fair view.• A true and fair view is one where accounts reflect what has happened and do not mislead the readers.• The accounts must be prepared in accordance with relevant accounting standards.
Information to be included • The rules governing the content of the annual report are derived from:• Statute law - the Companies Act • Accounting standards• Stock Exchange rules• Codes of best practice in corporate governance.
Companies Act 1985/9• Directors have stewardship of limited companies.• Directors are required to publish accounts which show a true and fair view of the company’s financial position.• Accounts must be sent to:– All shareholders– All debenture holders– The Registrar of Companies at Companies House.– This must be done within 10 months of the year-end for a private company and within 7 months of the year end in the case of a public company 0 nhận xét
Budgets
Nhãn: Accounting
Budgets and budgeting•
Budget is a future plan which sets out a business’s financial targets.• Budgeting refers to the preparation of budgets - the drawing up of financial plans and monitoring the performance of a business in attaining them
Formal definition of a budget•
“A budget is a quantitative statement, for a defined period of time, which may include planned revenues, expenses, assets, liabilities and cash flows. A budget provides a focus for the organisation and aids the co-ordination of activities and facilitates control”. (CIMA)• Budgets are prepared in advance of a defined period of time. They are based on the objectives of the business and are intended to show how policies are to be pursued in order to achieve objectives.
What is a budget?• A budget – is a financial plan.– sets out a businesses financial targets.– is a plan expressed in money. – an agreed plan of action over a given period.– an agreed plan establishing, in numerical or financial terms, the policy to be pursued and the anticipated outcomes of that policy.
Forecasts, plans and budgets• A forecast is a prediction of future events and their quantification for the purpose of planning.• A forecast relates to events in the environment over which the business has either no control or only very limited control.• Hence we have a weather forecast - not a weather plan.• A forecast is not a budget but a prediction of the future.• However, a forecast of future sales is the starting point in the budgeting process.• Planning is the establishment of objectives and the formulation, evaluation and selection of the policies, strategies, tactics and action required to achieve the objectives.• A plan is the end product of planning.• Whereas a forecast is simply a prediction, a plan is what we are going to do about it.• A budget is a plan because it concerns actions to be taken rather than a passive acceptance of future trends.
Time horizons for a budget• Budget time horizon - this refers to the immediate future where on the basis of past business decisions and commitments the consequences are action can be predicted with a reasonable degree of certainty e.g. the next 12 months.• Business planning horizon - the period over which future forecasts can be made with a reasonable degree of confidence e.g. 3-5 years.• Strategic planning horizon - far into the future- it is concerned with the long term aspirations of senior managers e.g. 5+ years. 0 nhận xét
Budget is a future plan which sets out a business’s financial targets.• Budgeting refers to the preparation of budgets - the drawing up of financial plans and monitoring the performance of a business in attaining them
Formal definition of a budget•
“A budget is a quantitative statement, for a defined period of time, which may include planned revenues, expenses, assets, liabilities and cash flows. A budget provides a focus for the organisation and aids the co-ordination of activities and facilitates control”. (CIMA)• Budgets are prepared in advance of a defined period of time. They are based on the objectives of the business and are intended to show how policies are to be pursued in order to achieve objectives.
What is a budget?• A budget – is a financial plan.– sets out a businesses financial targets.– is a plan expressed in money. – an agreed plan of action over a given period.– an agreed plan establishing, in numerical or financial terms, the policy to be pursued and the anticipated outcomes of that policy.
Forecasts, plans and budgets• A forecast is a prediction of future events and their quantification for the purpose of planning.• A forecast relates to events in the environment over which the business has either no control or only very limited control.• Hence we have a weather forecast - not a weather plan.• A forecast is not a budget but a prediction of the future.• However, a forecast of future sales is the starting point in the budgeting process.• Planning is the establishment of objectives and the formulation, evaluation and selection of the policies, strategies, tactics and action required to achieve the objectives.• A plan is the end product of planning.• Whereas a forecast is simply a prediction, a plan is what we are going to do about it.• A budget is a plan because it concerns actions to be taken rather than a passive acceptance of future trends.
Time horizons for a budget• Budget time horizon - this refers to the immediate future where on the basis of past business decisions and commitments the consequences are action can be predicted with a reasonable degree of certainty e.g. the next 12 months.• Business planning horizon - the period over which future forecasts can be made with a reasonable degree of confidence e.g. 3-5 years.• Strategic planning horizon - far into the future- it is concerned with the long term aspirations of senior managers e.g. 5+ years. 0 nhận xét
Incremental Budgeting
Nhãn: Accounting
Incremental budget
• This is a budget prepared using a previous period’s budget or actual performance as a basis with incremental amounts added for the new budget period
• The allocation of resources is based upon allocations from the previous period.
• This approach is not recommended as it fails to take into account changing circumstances
• Moreover it encourages “spending up to the budget” to ensure a reasonable allocation in the next period. It leads to a “spend it or lose” mentality.
Advantages of incremental budgeting
• The budget is stable and change is gradual.
• Managers can operate their departments on a consistent basis.
• The system is relatively simple to operate and easy to understand.
• Conflicts should be avoided if departments can be seen to be treated similarly.
• Co-ordination between budgets is easier to achieve.
• The impact of change can be seen quickly.
Disadvantages of incremental budgeting
• Assumes activities and methods of working will continue in the same way.
• No incentive for developing new ideas.
• No incentives to reduce costs.
• Encourages spending up to the budget so that the budget is maintained next year.
• The budget may become out of date and no longer relate to the level of activity or type of work being carried out.
• The priority for resources may have changed since the budgets were set originally.
• There may be budgetary slack built into the budget, which is never reviewed-managers might have overestimated their requirements in the past in order to obtain a budget which is easier to work to, and which will allow them to achieve favourable results. 0 nhận xét
• This is a budget prepared using a previous period’s budget or actual performance as a basis with incremental amounts added for the new budget period
• The allocation of resources is based upon allocations from the previous period.
• This approach is not recommended as it fails to take into account changing circumstances
• Moreover it encourages “spending up to the budget” to ensure a reasonable allocation in the next period. It leads to a “spend it or lose” mentality.
Advantages of incremental budgeting
• The budget is stable and change is gradual.
• Managers can operate their departments on a consistent basis.
• The system is relatively simple to operate and easy to understand.
• Conflicts should be avoided if departments can be seen to be treated similarly.
• Co-ordination between budgets is easier to achieve.
• The impact of change can be seen quickly.
Disadvantages of incremental budgeting
• Assumes activities and methods of working will continue in the same way.
• No incentive for developing new ideas.
• No incentives to reduce costs.
• Encourages spending up to the budget so that the budget is maintained next year.
• The budget may become out of date and no longer relate to the level of activity or type of work being carried out.
• The priority for resources may have changed since the budgets were set originally.
• There may be budgetary slack built into the budget, which is never reviewed-managers might have overestimated their requirements in the past in order to obtain a budget which is easier to work to, and which will allow them to achieve favourable results. 0 nhận xét
Purpose of Budgets
Nhãn: Accounting
Six Key Purposes of Budgets
• A method of planning the use of resources
• A vehicle for forecasting
• A means of controlling the activities of various groups within the firm
• A means of motivating individuals to achieve performance levels agreed and set.
• A means of communicating the wishes and aspirations of senior management
• A means of resolving conflicts of interest between groups with the organisation
Role of Budgets
• To aid the planning of the organisation in a systematic and logical manner that adheres to the long term strategy• To determine direction• To forecast outcomes• To allocate resources• To promote forward thinking• To turn strategic objectives into practical reality• To establish priorities.• To set targets in numerical terms• To provide direction and co-ordination• To communicate objectives, opportunities and plans various managers.• To assign responsibilities.• To allocate resources.• To delegate without loss of control. • To provide motivation for managers to achieve goals• To motivate staff.• To improve efficiency.• To establish targets and standards which employees are motivated to achieve• To evaluate performance against the budget • To provide a framework for evaluating the performance of managers in meeting individual and department targets• To control activities by measuring progress against the original plan, making adjustments where necessary• To control income and expenditure• To facilitates management by exception• To take remedial action when there is deviation from the plan 0 nhận xét
• A method of planning the use of resources
• A vehicle for forecasting
• A means of controlling the activities of various groups within the firm
• A means of motivating individuals to achieve performance levels agreed and set.
• A means of communicating the wishes and aspirations of senior management
• A means of resolving conflicts of interest between groups with the organisation
Role of Budgets
• To aid the planning of the organisation in a systematic and logical manner that adheres to the long term strategy• To determine direction• To forecast outcomes• To allocate resources• To promote forward thinking• To turn strategic objectives into practical reality• To establish priorities.• To set targets in numerical terms• To provide direction and co-ordination• To communicate objectives, opportunities and plans various managers.• To assign responsibilities.• To allocate resources.• To delegate without loss of control. • To provide motivation for managers to achieve goals• To motivate staff.• To improve efficiency.• To establish targets and standards which employees are motivated to achieve• To evaluate performance against the budget • To provide a framework for evaluating the performance of managers in meeting individual and department targets• To control activities by measuring progress against the original plan, making adjustments where necessary• To control income and expenditure• To facilitates management by exception• To take remedial action when there is deviation from the plan 0 nhận xét
minimum wage
Nhãn: Accounting
ADVANTAGES OF THE MINIMUM WAGE- Fair for workers to be paid a minimum wage. - Helps low earners gain a higher standard of living- Extra disposable income should lead to extra spending in the economy- Helps increase the gap between wages for low earners and unemployment benefit- May help reduce unemployment
DISADVANTAGES OF THE MINIMUM WAGE
- Increases the cost to businesses-Businesses may increase their prices (cost push inflation)- Businesses may be unable to afford to employ as many workers- Could cause unemployment- Other workers may now ask for a pay rise- Doesn’t help the unemployed who don’t receive a wage
In the diagram above, £3.80 is the free market equilibrium wage, supply is equal to demand. At this point 1000 people are employed.
Imagine that a minimum wage is imposed at £4.20. Some businesses can’t afford their wage bill and reduce their workforce. Now only 750 workers are employed. 250 have become unemployed.
0 nhận xét
Marketing process
Nhãn: Marketing skill
Macdonald (1995) suggests that several stages have to be completed in order to arrive at a strategic marketing plan. These are summarised in the diagram below:
The extent to which each part of the above process needs to be carried out depends on the size and complexity of the business.
In an un diversified business, where senior management have a strong knowledge and detailed understanding of the overall business, it may not be necessary to formalise the marketing planning process.
By contrast, in a highly diversified business, top level management will not have knowledge and expertise that matches subordinate management. In this situation, it makes sense to put formal marketing planning procedures in place throughout the organisation.
1 nhận xét
The extent to which each part of the above process needs to be carried out depends on the size and complexity of the business.
In an un diversified business, where senior management have a strong knowledge and detailed understanding of the overall business, it may not be necessary to formalise the marketing planning process.
By contrast, in a highly diversified business, top level management will not have knowledge and expertise that matches subordinate management. In this situation, it makes sense to put formal marketing planning procedures in place throughout the organisation.
Strategic planning
Nhãn: Marketing skill
Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition.Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.Where does marketing planning fit in with the overall strategic planning of a business?Strategic planning (which you will cover in your studies of “strategy” is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”.Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!).However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of marketing decision-making in such a complex situation? This calls for well-organised marketing planning.What are the key issues that should be addressed in marketing planning?The following questions lie at the heart of any marketing (or indeed strategic) planning process:• Where are we now?• How did we get there?• Where are we heading?• Where would we like to be?• How do we get there?• Are we on course?Why is marketing planning essential?Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected. It makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services.A marketing plan is useful to many people in a business. It can help to:• Identify sources of competitive advantage• Gain commitment to a strategy• Get resources needed to invest in and build the business• Inform stakeholders in the business• Set objectives and strategies• Measure performance
0
nhận xét
pricing
Nhãn: Marketing skill
Setting the right price is an important part of effective marketing . It is the only part of the marketing mix that generates revenue (product, promotion and place are all about marketing costs).Price is also the marketing variable that can be changed most quickly, perhaps in response to a competitor price change.Put simply, price is the amount of money or goods for which a thing is bought or sold.The price of a product may be seen as a financial expression of the value of that product.For a consumer, price is the monetary expression of the value to be enjoyed/benefits of purchasing a product, as compared with other available items.The concept of value can therefore be expressed as:(perceived) VALUE = (perceived) BENEFITS – (perceived) COSTSA customer’s motivation to purchase a product comes firstly from a need and a want:e.g.• Need: "I need to eat• Want: I would like to go out for a meal tonight")The second motivation comes from a perception of the value of a product in satisfying that need/want (e.g. "I really fancy a McDonalds").The perception of the value of a product varies from customer to customer, because perceptions of benefits and costs vary.Perceived benefits are often largely dependent on personal taste (e.g. spicy versus sweet, or green versus blue). In order to obtain the maximum possible value from the available market, businesses try to ‘segment’ the market – that is to divide up the market into groups of consumers whose preferences are broadly similar – and to adapt their products to attract these customers.In general, a products perceived value may be increased in one of two ways – either by:(1) Increasing the benefits that the product will deliver, or,(2) Reducing the cost.For consumers, the PRICE of a product is the most obvious indicator of cost - hence the need to get product pricing right.Factors affecting demandConsider the factors affecting the demand for a product that are(1) within the control of a business and(2) outside the control of a business:Factors within a businesses’ control include:• Price (assuming an imperfect market – i.e. not perfect competition)• Product research and development• Advertising & sales promotion• Training and organisation of the sales force• Effectiveness of distribution (e.g. access to retail outlets; trained distributor agents)• Quality of after-sales service (e.g. which affects demand from repeat-business)Factors outside the control of business include:• The price of substitute goods and services• The price of complementary goods and services• Consumers’ disposable income• Consumer tastes and fashionsPrice is, therefore, a critically important element of the choices available to businesses in trying to attract demand for their products.
0
nhận xét
Promotion
Nhãn: Marketing skill
Direct marketing is concerned with establishing an individual relationship between the business offering a product or service and the final customer.Direct marketing has been defined by the Institute of Direct Marketing as:The planned recording, analysis and tracking of customer behaviour to develop a relational marketing strategiesThe process of direct marketing covers a wide range of promotional activities you may be familiar with. These include:• Direct-response adverts on television and radio• Mail order catalogues• E-commerce (you bought this marketing companion following tutor2u’s direct marketing campaign!)• Magazine inserts• Direct mail (sometimes also referred to as “junk mail”)• TelemarketingDirect mailOf the above direct marketing techniques, the one in most widespread use is direct mail.Direct mail is widely thought of as the most effective medium to achieve a customer sales response.Why?• The advertiser can target a promotional message down to an individual level, and where possible personalise the message. There are a large number of mailing databases available that allow businesses to send direct mailing to potential customers based on household income, interests, occupation and other variables• Businesses can first test the responsiveness of direct mailing (by sending out a test mailing to a small, representative sample) before committing to the more significant cost of a larger campaign• Direct mailing campaigns are less visible to competitors – it is therefore possible to be more creative, for longerHowever, direct mail has several weaknesses:• A piece of direct mail is less “interactive” than a television or radio advert, although creative packaging can still stimulate customer response• Lead times to produce direct mailing campaigns can be quite long• There is increasing customer concern with “junk mail” – the receipt of unsolicited mail which often suggests that the right to individual privacy has been breached.The Direct marketing databaseDirect mailing is based on the “mailing list” – a critical part in the direct marketing process. The mailing list is a database which collects together details of past, current and potential customers. A properly managed mailing database enables a business to:• Focus on the best prospective customers• Cross-sell related products• Launch new products to existing customersHow is the mailing database compiled?The starting point is the existing information the business keeps on its customers. All forms of communication between a customer and the business need to be recorded so that a detailed, up-to-date profile can be maintained.It is also possible to “buy” mailing lists from elsewhere. There are numerous mailing list owners and brokers who sell lists of names. The Internet, directories, associations and other sources are good sources.
0
nhận xét
Contract
Nhãn: Contract
Type your summary here
0 nhận xét
CONTRACT
THIS AGREEMENT, made and entered into this ___ day of_________, l98_, by and between ___________________, theSeller, and ___________________, the Buyer: 1. The seller hereby undertakes to transfer and deliverto the buyer on or before __________, l98_, the followingdescribed goods:
2. The buyer hereby undertakes to accept the goods andpay for them in accordance with the terms of the contract.
3. It is agreed that identification shall not be deemedto have been made until both the buyer and the seller haveagreed that the goods in question are to be appropriated tothe performance of the contract with the buyer.
4. The buyer shall make payment for the goods at thetime when and at the place where the goods are received byhim.
5. Goods shall be deemed received by the buyer whenreceived by him at .
6. The risk of loss from any casualty to the goodsregardless of the cause thereof shall be on the seller untilthe goods have been accepted by the buyer.
7. The seller warrants that the goods are now free andat the time of delivery shall be free from any securityinterest or other lien or encumbrance.
8. The seller further warrants that at the time ofsigning this contract he neither knows nor has reason toknow of the existence of any outstanding title or claim oftitle hostile to his rights in the goods.
9. The buyer shall have the right to examine the goodson arrival, and within business days after such deliveryhe must give notice to the seller of any claim for damageson account of the condition, quality, or grade of theproperty, and must specify the basis of his claim in detail.The failure of the buyer to comply with these rules shallconstitute irrevocable acceptance of the goods.
10. Executed in duplicate, one copy of which wasdelivered to and retained by the buyer, the day and yearfirst above written.
/S/.......................... /S/..........................
0 nhận xét
ĐƠN XIN THAY ĐỔI NỘI DUNG ĐÃ ĐĂNG KÝ KINH DOANH
Nhãn: Company knowledge
ĐƠN XIN THAY ĐỔI NỘI DUNG ĐÃ ĐĂNG KÝ KINH DOANH
0 nhận xét
CỘNG HOÀ XÃ HỘI CHỦ NGHĨA VIỆT NAM
Độc lập - Tự do - Hạnh phúc
________________
Kính gửi: Uỷ ban nhân dân tỉnh (thành phố)
ĐƠN XIN THAY ĐỔI NỘI DUNG ĐÃ ĐĂNG KÝ KINH DOANH
Tên doanh nghiệp:……………………………………………………...
Hình thức doanh nghiệp:……………………………………………….
Số giấy phép thành lập:………………………………………………... do UBND Tỉnh (thành phố) cấp ngày… tháng…. năm…
Số đăng ký kinh doanh…… Do…….. cấp ngày… tháng… năm 199....
Trụ sở doanh nghiệp:…………………………………………………..
Tel:…………….. Fax:…………………………………………………
Vốn đầu tư ban đầu hoặc vốn điều lệ…………………………………..
Tài khoản:……………………………………………………………...
Ngành, nghề kinh doanh:………………………………………………
Thời hạn hoạt động:………………... năm
Xin thay đổi nội dung đã đăng ký kinh doanh:………………………...
Tên doanh nghiệp:……………………………………………………...
Trụ sở:………………………………………………………………….
Ngành nghề kinh doanh:……………………………………………….
Vốn đầu tư:
Trong đó: - Vốn bằng tiền:
- Vốn bằng giá trị hiện vật:
Doanh nghiệp cam đoan những lời khai trên đây là hoàn toàn đúng sự thật. Doanh nghiệp xin chấp hành nghiêm chỉnh các quy định của Nhà nước về hoạt động của doanh nghiệp và thực hiện đầy đủ nghĩa vụ đối với nhà nước.
… Ngày… tháng… năm 199…
T/M Doanh nghiệp
Giám đốc
0 nhận xét
Business letter
Nhãn: Business letters
Business letter
Acceptance of Counter Proposal
Dear
Your counter proposal on the above referenced project
has been reviewed and is acceptable in its entirety.
We are enclosing an executed copy of the agreement along
with two copies for your files.
We are enthusiastically looking forward to this project
and are pleased about having the opportunity to work
together.
Acceptance of Order
We are in receipt of your order as contained in theattached purchase order form. We confirm acceptance on said order subject only to thefollowing exceptions: [Describe]
_
On exceptions noted, we shall assume you agree to sameunless objection is received within ten days of receipt ofthis notice.
Thank you for your patronage.
_______________________________
Acceptance of Order with Delivery in Lots
To: _ [Customer]
We acknowledge acceptance of your order as per your orderof _, 19_. The goods will be shipped to you in the followinglots: [Specify lots and delivery schedule]
_
We request that payment be made as each lot is received.
Very truly,
_______________________________
Acceptance of Purchase Security Agreement
Dear
Attached is an accepted copy of your Purchase SecurityAgreement for the [specify equipment].There are [number] remaining quarterly payments. Yourfirst quarterly payment will be due on [date] , andwe will mail you an invoice for it approximately one monthprior to that date. Please return the remittance portionof the invoice with your check.Under the Agreement, this contract is non-cancellable duringthe term of the contract. The balance, however, can be paidoff at any time prior to the expiration of the contract.We would like to take this opportunity to express ourappreciation for your business. If you have any questionsconcerning your contract, or if we can be of service to youin any way, please let us know.
Acceptance of Resignation
Dear
It is with deep regret, that we accept your resignationas [position] of the [organization]We can appreciate the demands that this position has placedon you, and appreciate all of the fine contributions youhave made as [position]
0 nhận xét
Acceptance of Counter Proposal
Dear
Your counter proposal on the above referenced project
has been reviewed and is acceptable in its entirety.
We are enclosing an executed copy of the agreement along
with two copies for your files.
We are enthusiastically looking forward to this project
and are pleased about having the opportunity to work
together.
Acceptance of Order
ACKNOWLEDGEMENT AND ACCEPTANCE
OF ORDER
Date: _
To: _ [Customer] We are in receipt of your order as contained in theattached purchase order form. We confirm acceptance on said order subject only to thefollowing exceptions: [Describe]
_
On exceptions noted, we shall assume you agree to sameunless objection is received within ten days of receipt ofthis notice.
Thank you for your patronage.
Very truly,
_______________________________
Acceptance of Order with Delivery in Lots
ACCEPTANCE OF ORDER WITH
DELIVERY IN LOTS
Date: _
We acknowledge acceptance of your order as per your orderof _, 19_. The goods will be shipped to you in the followinglots: [Specify lots and delivery schedule]
_
We request that payment be made as each lot is received.
Very truly,
_______________________________
Acceptance of Purchase Security Agreement
Dear
Attached is an accepted copy of your Purchase SecurityAgreement for the [specify equipment].There are [number] remaining quarterly payments. Yourfirst quarterly payment will be due on [date] , andwe will mail you an invoice for it approximately one monthprior to that date. Please return the remittance portionof the invoice with your check.Under the Agreement, this contract is non-cancellable duringthe term of the contract. The balance, however, can be paidoff at any time prior to the expiration of the contract.We would like to take this opportunity to express ourappreciation for your business. If you have any questionsconcerning your contract, or if we can be of service to youin any way, please let us know.
Acceptance of Resignation
Dear
It is with deep regret, that we accept your resignationas [position] of the [organization]We can appreciate the demands that this position has placedon you, and appreciate all of the fine contributions youhave made as [position]
0 nhận xét
HỢP ĐỒNG HỢP TÁC KINH DOANH
Nhãn: Contract
HỢP ĐỒNG HỢP TÁC KINH DOANH
CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM
Độc lập - Tự do - Hạnh phúc
***********
HỢP ĐỒNG HỢP TÁC KINH DOANH
Số [SO HD]/HĐHTKD
- Căn cứ Pháp lệnh hợp đồng kinh tế ngày 25-9-1989 của Hội đồng Nhà nước vàNghị định số 17/HĐBT ngày 16-01-1990 của Hội đồng Bộ trưởng;
- Căn cứ Quyết định số 38 ngày 10-4-1989 của Hội đồng Bộ trưởng về liên kết kinh tế trong sản xuất, lưu thông, dịch vụ.
- Căn cứ vào [các văn bẢn cỦa UBND cẤp tỈnh hoẶc ngành chỦ quẢN]).
Hôm nay ngày [NGAY THANG NAM] Tại [DIA DIEM KY KET]]
Chúng tôi gồm có:
Bên A:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [GIAM DOC HAY TONG GIAM DOC] ký (nếu có).
Bên B:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [TONG GIAM DOC HAY GIAM DOC] ký (nếu có).
Bên C:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [TONG GIAM DOC HAY GIAM DOC] ký (nếu có).
Bên D:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [TONG GIAM DOC HAY GIAM DOC] ký (nếu có).
Các bên thống nhất thỏa thuận nội dung hợp đồng như sau:
Điều 1: Nội dung các hoạt động kinh doanh
[NOI DUNG CUA HOAT DONG]
(Có thể hợp tác trong sản xuất hàng hoá, xây dựng một công trình thu mua chế biến một hoặc một số loại sản phẩm, tiến hành một hoạt động dịch vụ v.v…).
Điều 2: Danh mục, số lượng, chất lượng thiết bị, vật tư chủ yếu cần cho hoạt động kinh doanh và nguồn cung cấp thiết bị vật tư.
[DANH MUC]
[SO LUONG]
[CHAT LUONG THIET BI VAT TU]
(Có thể lập bảng chiết tính theo các mục trên)
Điều 3: Quy cách, số lượng, chất lượng sản phẩm và thị trường tiêu thụ
1. Quy cách sản phẩm
- Hình dáng kích thước [KICH THUOC]
- Màu sắc [MAU SAC]
- Bao bì [BAO BI]
- Ký mã hiệu [KY HIEU]
2. Số lượng sản phẩm
- Số lượng sản phẩm trong năm sẽ sản xuất là [SO LUONG]
- Trong các quý [QUY]
- Trong từng tháng của quý [THANG]
3. Chất lượng sản phẩm
Sản phẩm phải đạt tiêu chuẩn chất lượng như sau [TIEU CHUAN YEU CAU]
(Dựa theo tiêu chuẩn, theo mẫu, theo hàm lượng chất chủ yếu, theo tài liệu kỹ thuật v.v…).
4. Thị trường tiêu thụ
a/ Các thị trường phải cung ứng theo chỉ tiêu pháp lệnh:
- Địa chỉ [DIA CHI] Dự kiến số lượng [SO LUONG]
b/ Các thị trường khác đã có đơn đặt hàng
- Địa chỉ [DIA CHI] Dự kiến số lượng [SO LUONG]
c/ Các thị trường có thể bán lẻ
- Địa chỉ [DIA CHI] Dự kiến số lượng [SO LUONG]
Điều 4: Nghĩa vụ và quyền lợi của các bên hợp doanh
1. Bên A
a/ Có các nghĩa vụ sau: (Theo trách nhiệm đã phân công)
[TRACH NHIEM]
b/ Các quyền lợi:
[QUYEN LOI]
2. Bên B: (Ghi rõ quyền và nghĩa vụ theo thỏa thuận).
[QUYEN LOI VA NGHIA VU]
3. Bên C:
[QUYEN LOI VA NGHIA VU]
Điều 5: Phương thức xác định kết quả kinh doanh và phân chia kết quả kinh doanh
1. Phương thức xác định kết quả kinh doanh
a. Dựa vào lợi nhuận do bán sản phẩm (hoặc các công trình hoàn thành được bên chủ đầu tư thanh toán) .
b. Dựa vào các nguồn thu nhập khác (nếu có)
(Thu nhập này có thể là lãi, có thể là lỗ)
2. Phương thức phân chia kết quả kinh doanh
a. Các bên được chia lợi nhuận hoặc lỗ và rủi ro theo tỷ lệ tương ứng với phần trách nhiệm trong hợp doanh.
b. Tỷ lệ phân chia cụ thể được thỏa thuận trên cơ sở phần công việc được giao như sau:
- Bên A là [SO %] kết quả
- Bên B là [SO %]
- Bên C là [SO %]
- v.v…
Điều 6: Trách nhiệm của các bên do vi phạm hợp đồng
1. Bên nào đã ký hợp đồng mà không thực hiện hoặc đơn phương đình chỉ hợp đồng không có lý do chính đáng thì sẽ bị phạt [SO %] tổng trị giá vốn mà bên đó có trách nhiệm đóng (có thể xác định một khoản tiền cụ thể).
2. Ngoài tiền phạt vi phạm hợp đồng, bên vi phạm còn phải bồi thường những mất mát hư hỏng tài sản, phải trả những chi phí để ngăn chặn, hạn chế thiệt hại do vi phạm hợp đồng gây ra, các khoản tiền phạt do vi phạm hợp đồng khác và tiền bồi thường thiệt hại mà các bên bị vi phạm đã phải trả cho bên thứ ba (ngoài hợp doanh) là hậu quả trực tiếp của vi phạm này gây ra.
3. Các bên vi phạm nghĩa vụ trách nhiệm đã quy định trong Điều 4 sẽ bị buộc phải thực hiện đầy đủ những quy định đó, nếu cố tình không thực hiện sẽ bị khấu trừ vào lợi nhuận, nếu nghiêm trọng có thể bị khấu trừ cả vào vốn góp (Tùy theo tính chất mức độ vi phạm cụ thể mà các bên sẽ họp quyết định mức phạt cụ thể vào biên bản).
Điều 7: Thủ tục giải quyết các tranh chấp giữa các bên phát sinh từ việc thực hiện hợp đồng
1. Hai bên cần chủ động thông báo cho nhau biết tiến độ thực hiện hợp đồng, nếu có vấn đề gì bất lợi phát sinh, các bên phải kịp thời báo cho nhau biết và chủ động bàn bạc giải quyết trên cơ sở thương lượng đảm bảo hai bên cùng có lợi (có lập biên bản ghi toàn bộ nội dung đó).
2. Trường hợp có nội dung tranh chấp không tự giải quyết được thì hai bên thống nhất sẽ khiếu nại tới Tòa án [TEN TOA AN KINH TE] là cơ quan có đủ thẩm quyền giải quyết.
3. Các chi phí về kiểm tra, xác minh và lệ phí Tòa án do bên có lỗi chịu.
Điều 8: Trường hợp cần sửa đổi hoặc chấm dứt hợp đồng trước thời hạn
1. Trường hợp cần sử đổi hợp đồng
- Khi quyền lợi của một bên nào đó bị thiệt thòi do phân chia lợi nhuận không chính xác và công bằng, cần xác định lại phương thức phân chia kết quả.
- Phân công nghĩa vụ trách nhiệm chưa sát hợp với khả năng thực tế của một trong các bên.
- Khi cần thay đổi quy cách, chất lượng cho phù hợp với nhu cầu người tiêu dùng, hoặc thay đổi mẫu mã hàng hóa, thay đổi mặt hàng kinh doanh, v.v…
- Khi cần thay đổi số lượng vốn góp của một trong các bên.
2. Trường hợp cần chấm dứt hợp đồng trước thời hạn
- Khi cơ quan Nhà nước có thẩm quyền ra quyết định đình chỉ các hoạt động ghi trong hợp đồng này (do hoạt động trong hợp đồng vi phạm pháp luật).
- Khi gặp rủi ro (cháy, nổ, lụt…) làm cho một hoặc nhiều bên mất khả năng hoat động.
- Khi làm ăn thua lỗ trong.. tháng liên tiếp dẫn tới vỡ nợ hoặc mất khả năng thanh toán.
[CAC TRUONG HOP CU THE KHAC]
3. Các bên phải tổ chức họp và lập biên bản thanh lý hợp đồng trước thời hạn, xác định trách nhiệm tiếp theo của các bên sau khi chấm dứt hợp đồng vào biên bản và phải thực hiện triệt để phần trách nhiệm của mình.
Điều 9: Các thỏa thuận khác (nếu cần)
Điều 10: Thời hạn có hiệu lực của hợp đồng
................................................................................................................. Hợp đồng này có hiệu lực từ ngày [NGAY THANG NAM] Đến ngày [NGAY THANG NAM].
Các bên sẽ tổ chức họp và lập biên bản thanh lý hợp đồng này sau khi hết hiệu lực không quá 10 ngày. Bên [BEN CHIU TRACH NHIEM] có trách nhiệm tổ chức và chuẩn bị thời gian, địa điểm họp.
Hợp đồng này được làm thành [SO BAN] bản, có giá trị như nhau, mỗi bên giữ [SO BAN] bản.
Gửi cơ quan [SO BAN] bản
ĐẠI DIỆN BÊN A ĐẠI DIỆN BÊN B ĐẠI DIỆN BÊN C
Chức vụ Chức vụ Chức vụ
(Ký tên, đóng dấu) (Ký tên, đóng dấu) (Ký tên, đóng dấu)
0 nhận xét
CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM
Độc lập - Tự do - Hạnh phúc
***********
HỢP ĐỒNG HỢP TÁC KINH DOANH
Số [SO HD]/HĐHTKD
- Căn cứ Pháp lệnh hợp đồng kinh tế ngày 25-9-1989 của Hội đồng Nhà nước vàNghị định số 17/HĐBT ngày 16-01-1990 của Hội đồng Bộ trưởng;
- Căn cứ Quyết định số 38 ngày 10-4-1989 của Hội đồng Bộ trưởng về liên kết kinh tế trong sản xuất, lưu thông, dịch vụ.
- Căn cứ vào [các văn bẢn cỦa UBND cẤp tỈnh hoẶc ngành chỦ quẢN]).
Hôm nay ngày [NGAY THANG NAM] Tại [DIA DIEM KY KET]]
Chúng tôi gồm có:
Bên A:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [GIAM DOC HAY TONG GIAM DOC] ký (nếu có).
Bên B:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [TONG GIAM DOC HAY GIAM DOC] ký (nếu có).
Bên C:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [TONG GIAM DOC HAY GIAM DOC] ký (nếu có).
Bên D:
- Tên cơ quan (hoặc doanh nghiệp): [TEN DOANH NGHIEP]
- Địa chỉ: [DIA CHI DOANH NGHIEP]
- Điện thoại: [SO DT]
- Tài khoản số: [SO TAI KHOAN] Mở tại ngân hàng: [TEN NGAN HANG]
- Đại diện là Ông (Bà): [HO VA TEN] Chức vụ: [CHUC VU]
- Giấy ủy quyền số: [SO GIAY UY QUYEN] (nếu có).
Viết ngày [NGAY THANG NAM] Do [HO VA TEN] chức vụ: [TONG GIAM DOC HAY GIAM DOC] ký (nếu có).
Các bên thống nhất thỏa thuận nội dung hợp đồng như sau:
Điều 1: Nội dung các hoạt động kinh doanh
[NOI DUNG CUA HOAT DONG]
(Có thể hợp tác trong sản xuất hàng hoá, xây dựng một công trình thu mua chế biến một hoặc một số loại sản phẩm, tiến hành một hoạt động dịch vụ v.v…).
Điều 2: Danh mục, số lượng, chất lượng thiết bị, vật tư chủ yếu cần cho hoạt động kinh doanh và nguồn cung cấp thiết bị vật tư.
[DANH MUC]
[SO LUONG]
[CHAT LUONG THIET BI VAT TU]
(Có thể lập bảng chiết tính theo các mục trên)
Điều 3: Quy cách, số lượng, chất lượng sản phẩm và thị trường tiêu thụ
1. Quy cách sản phẩm
- Hình dáng kích thước [KICH THUOC]
- Màu sắc [MAU SAC]
- Bao bì [BAO BI]
- Ký mã hiệu [KY HIEU]
2. Số lượng sản phẩm
- Số lượng sản phẩm trong năm sẽ sản xuất là [SO LUONG]
- Trong các quý [QUY]
- Trong từng tháng của quý [THANG]
3. Chất lượng sản phẩm
Sản phẩm phải đạt tiêu chuẩn chất lượng như sau [TIEU CHUAN YEU CAU]
(Dựa theo tiêu chuẩn, theo mẫu, theo hàm lượng chất chủ yếu, theo tài liệu kỹ thuật v.v…).
4. Thị trường tiêu thụ
a/ Các thị trường phải cung ứng theo chỉ tiêu pháp lệnh:
- Địa chỉ [DIA CHI] Dự kiến số lượng [SO LUONG]
b/ Các thị trường khác đã có đơn đặt hàng
- Địa chỉ [DIA CHI] Dự kiến số lượng [SO LUONG]
c/ Các thị trường có thể bán lẻ
- Địa chỉ [DIA CHI] Dự kiến số lượng [SO LUONG]
Điều 4: Nghĩa vụ và quyền lợi của các bên hợp doanh
1. Bên A
a/ Có các nghĩa vụ sau: (Theo trách nhiệm đã phân công)
[TRACH NHIEM]
b/ Các quyền lợi:
[QUYEN LOI]
2. Bên B: (Ghi rõ quyền và nghĩa vụ theo thỏa thuận).
[QUYEN LOI VA NGHIA VU]
3. Bên C:
[QUYEN LOI VA NGHIA VU]
Điều 5: Phương thức xác định kết quả kinh doanh và phân chia kết quả kinh doanh
1. Phương thức xác định kết quả kinh doanh
a. Dựa vào lợi nhuận do bán sản phẩm (hoặc các công trình hoàn thành được bên chủ đầu tư thanh toán) .
b. Dựa vào các nguồn thu nhập khác (nếu có)
(Thu nhập này có thể là lãi, có thể là lỗ)
2. Phương thức phân chia kết quả kinh doanh
a. Các bên được chia lợi nhuận hoặc lỗ và rủi ro theo tỷ lệ tương ứng với phần trách nhiệm trong hợp doanh.
b. Tỷ lệ phân chia cụ thể được thỏa thuận trên cơ sở phần công việc được giao như sau:
- Bên A là [SO %] kết quả
- Bên B là [SO %]
- Bên C là [SO %]
- v.v…
Điều 6: Trách nhiệm của các bên do vi phạm hợp đồng
1. Bên nào đã ký hợp đồng mà không thực hiện hoặc đơn phương đình chỉ hợp đồng không có lý do chính đáng thì sẽ bị phạt [SO %] tổng trị giá vốn mà bên đó có trách nhiệm đóng (có thể xác định một khoản tiền cụ thể).
2. Ngoài tiền phạt vi phạm hợp đồng, bên vi phạm còn phải bồi thường những mất mát hư hỏng tài sản, phải trả những chi phí để ngăn chặn, hạn chế thiệt hại do vi phạm hợp đồng gây ra, các khoản tiền phạt do vi phạm hợp đồng khác và tiền bồi thường thiệt hại mà các bên bị vi phạm đã phải trả cho bên thứ ba (ngoài hợp doanh) là hậu quả trực tiếp của vi phạm này gây ra.
3. Các bên vi phạm nghĩa vụ trách nhiệm đã quy định trong Điều 4 sẽ bị buộc phải thực hiện đầy đủ những quy định đó, nếu cố tình không thực hiện sẽ bị khấu trừ vào lợi nhuận, nếu nghiêm trọng có thể bị khấu trừ cả vào vốn góp (Tùy theo tính chất mức độ vi phạm cụ thể mà các bên sẽ họp quyết định mức phạt cụ thể vào biên bản).
Điều 7: Thủ tục giải quyết các tranh chấp giữa các bên phát sinh từ việc thực hiện hợp đồng
1. Hai bên cần chủ động thông báo cho nhau biết tiến độ thực hiện hợp đồng, nếu có vấn đề gì bất lợi phát sinh, các bên phải kịp thời báo cho nhau biết và chủ động bàn bạc giải quyết trên cơ sở thương lượng đảm bảo hai bên cùng có lợi (có lập biên bản ghi toàn bộ nội dung đó).
2. Trường hợp có nội dung tranh chấp không tự giải quyết được thì hai bên thống nhất sẽ khiếu nại tới Tòa án [TEN TOA AN KINH TE] là cơ quan có đủ thẩm quyền giải quyết.
3. Các chi phí về kiểm tra, xác minh và lệ phí Tòa án do bên có lỗi chịu.
Điều 8: Trường hợp cần sửa đổi hoặc chấm dứt hợp đồng trước thời hạn
1. Trường hợp cần sử đổi hợp đồng
- Khi quyền lợi của một bên nào đó bị thiệt thòi do phân chia lợi nhuận không chính xác và công bằng, cần xác định lại phương thức phân chia kết quả.
- Phân công nghĩa vụ trách nhiệm chưa sát hợp với khả năng thực tế của một trong các bên.
- Khi cần thay đổi quy cách, chất lượng cho phù hợp với nhu cầu người tiêu dùng, hoặc thay đổi mẫu mã hàng hóa, thay đổi mặt hàng kinh doanh, v.v…
- Khi cần thay đổi số lượng vốn góp của một trong các bên.
2. Trường hợp cần chấm dứt hợp đồng trước thời hạn
- Khi cơ quan Nhà nước có thẩm quyền ra quyết định đình chỉ các hoạt động ghi trong hợp đồng này (do hoạt động trong hợp đồng vi phạm pháp luật).
- Khi gặp rủi ro (cháy, nổ, lụt…) làm cho một hoặc nhiều bên mất khả năng hoat động.
- Khi làm ăn thua lỗ trong.. tháng liên tiếp dẫn tới vỡ nợ hoặc mất khả năng thanh toán.
[CAC TRUONG HOP CU THE KHAC]
3. Các bên phải tổ chức họp và lập biên bản thanh lý hợp đồng trước thời hạn, xác định trách nhiệm tiếp theo của các bên sau khi chấm dứt hợp đồng vào biên bản và phải thực hiện triệt để phần trách nhiệm của mình.
Điều 9: Các thỏa thuận khác (nếu cần)
Điều 10: Thời hạn có hiệu lực của hợp đồng
................................................................................................................. Hợp đồng này có hiệu lực từ ngày [NGAY THANG NAM] Đến ngày [NGAY THANG NAM].
Các bên sẽ tổ chức họp và lập biên bản thanh lý hợp đồng này sau khi hết hiệu lực không quá 10 ngày. Bên [BEN CHIU TRACH NHIEM] có trách nhiệm tổ chức và chuẩn bị thời gian, địa điểm họp.
Hợp đồng này được làm thành [SO BAN] bản, có giá trị như nhau, mỗi bên giữ [SO BAN] bản.
Gửi cơ quan [SO BAN] bản
ĐẠI DIỆN BÊN A ĐẠI DIỆN BÊN B ĐẠI DIỆN BÊN C
Chức vụ Chức vụ Chức vụ
(Ký tên, đóng dấu) (Ký tên, đóng dấu) (Ký tên, đóng dấu)
0 nhận xét
Đăng ký:
Bài đăng (Atom)