30+mba-第9章
按键盘上方向键 ← 或 → 可快速上下翻页，按键盘上的 Enter 键可回到本书目录页，按键盘上方向键 ↑ 可回到本页顶部！
————未阅读完？加入书签已便下次继续阅读！
between them constitute a set of accounts； but conventionally two balance
sheets； the opening and closing one； are provided to make a ‘package’。
By including these balance sheets we can see the full picture of what has
happened to the owner’s investment in the business。
Table 1。10 shows a simplified package of accounts。 We can see from these；
that over the year the business has made ￡600 of profit a。。er tax； and has
invested that profit in ￡200 of additional fixed assets and ￡400 of working
capital such as stock and debtors； balancing that off with the ￡600 put into
reserves from the year’s profits。
FILING ACCOUNTS
A pany’s financial affairs are in the public domain。 As well as keeping
HM Revenue and Customs （HMCR） informed； panies have to file
Table 1。10 A package of accounts
Balance sheet at 31 Dec 2009 P & L for year to 31 Dec 2010 Balance sheet at 2010
￡’s ￡’s ￡’s
Fixed assets 1；000 Sales 10；000 Fixed assets 1；200
Working capital 1；000 less cost of sales 6；000 Working capital 1；400
2；000 Gross profit 4；000 2；600
less expenses 3；000
Financed by Profit before tax 1；000 Financed by
Owners’ equity 2；000 Tax 400 Owners’ equity 2；000
Profit a。。er tax 600 Reserves 600
2；600
Accounting 39
their accounts with panies House （wwwpanieshouse。gov。uk/
about/gbhtml/gb3。shtml）。 Accounts should be filed within 10 months of
the pany’s financial year…end。 Small businesses （turnover below ￡5。6
million） can file abbreviated accounts that include only very limited balance
sheet and profit and loss account information and these do not need to be
audited。 Businesses can be fined up to ￡1；000 for filing accounts late。
You can find the report and accounts for all panies listed on UK
stock markets at Free pany Report and Accounts （fcreports。
）。 US pany accounts can be obtained from The Securities Exchange
mission （sec。gov）。 The Investor Relations Society （irs。
uk 》 IR Best Practice） makes an award each year to the pany producing
the best set of report and accounts。
FINANCIAL RATIOS
Earlier in this chapter the two important financial statements of profit
and loss account and balance sheet were examined。 To recap – the trading
performance of a pany for a period of time is measured in the profit and
loss account by deducting running costs from sales ine。 A balance sheet
sets out the financial position of the pany at a particular point in time；
usually the end of the accounting period。 It lists the assets owned by the
pany at that date matched by an equal list of the sources of finance。
Reading pany accounts； with practice； you can get some insight into
a pany’s affairs。 paring the current year’s figure with the previous
year’s figure can identify changes in some of the key items； but conclusions
drawn from this approach can be misleading。 Consider the situation shown
in Table 1。11。
You can see that the table is nothing more than a simplified profit and
loss account on the le。。 and the assets section of the balance sheet on the
right。 Any change that increases net profit （more sales； lower expenses；
less tax etc）； but does not increase the amount of assets employed （lower
Table 1。11 Factors that affect profit performance
￡ ￡ ￡
Sales 100；000 Fixed assets 12；500
– Cost of sales 50；000
= Gross profit 50；000 Working capital
– Expenses 33；000 Current assets 23；100
= Operating profit 17；000 – Current liabilities 6；690 = 16；410
– Finance charges 8；090 Total net assets 28；910
= Net profit 8；910
40 The Thirty…Day MBA
stocks； fewer debtors etc）； will increase the return on assets。 Conversely；
any change that increases capital employed without increasing profits in
proportion will reduce the return on assets。
Now let us suppose that events occur to increase sales by ￡25；000 and
profits by ￡1；000 to ￡8。910。 Superficially that would look like an improved
position。 But if we then discover that in order to achieve that extra profit
new equipment costing ￡5；000 had to be bought and a further ￡2；500 had
to be tied up in working capital （stock and debtors）； the picture might not
look so a。。ractive。 The return being made on assets employed has dropped
from 31 per cent （8；910 / 28；910 × 100） to 27 per cent （9；910 / ＇28；910 ＋ 5；000 ＋
2；500＇ × 100）。
ANALYSING ACCOUNTS
The main analytical approach is to examine the relationship of pairs of
figures extracted from the accounts。 A pair may be taken from the same
statement； or one figure from each of the profit and loss account and
balance sheet statements。 When brought together； the two figures are called
ratios。 Miles per gallon； for example； is a useful ratio for drivers checking
one aspect of a vehicle’s performance。 Some financial ratios are meaningful
in themselves； but their value mainly lies in their parison with the
equivalent ratio last year； a target ratio； or a petitor’s ratio。
Before we can measure and analyse anything about a business’s accounts
we need some idea of what level or type of performance a business wants
to achieve。 All businesses have three fundamental objectives in mon；
which allow us to see how well （or otherwise） they are doing。
Making a satisfactory return on investment
The first of these objectives is to make a satisfactory return （profit） on the
money invested in the business。
It is hard to think of a sound argument against this aim。 To be satisfactory
the return must meet four criteria：
1。 It must give a fair return to shareholders； bearing in mind the risk they
are taking。 If the venture is highly speculative and the profits are less
than bank interest rates； your shareholders （yourself included） will not
be happy。
2。 You must make enough profit to allow the pany to grow。 If a business
wants to expand sales it will need more working capital and eventually
more space or equipment。 The safest and surest source of new money
for this is internally generated profits； retained in the business： reserves。
（A business has three sources of new money： share capital or the owner’s
Accounting 41
money； loan capital； put up by banks etc； retained profits； generated by
the business）。
3。 The return must be good enough to a。。ract new investors or lenders。
If investors can get a greater return on their money in some other
parable business； then that is where they will put it。
4。 The return must provide enough reserves to keep the real capital intact。
This means that you must recognize the impact inflation has on the
business。 A business retaining enough profits each year to meet a 3％
growth is actually contracting by 1％ if inflation is running at 4％。
Maintaining a sound financial position
As well as making a satisfactory return； investors； creditors and employees
expect the business to be protected from unnecessary risks。 Clearly； all
businesses are exposed to market risks： petitors； new products and
price changes are all part of a healthy mercial environment。 The sorts
of unnecessary risk that investors and lenders are particularly concerned
about are high financial risks； such as overtrading。
Cash…flow problems are not the only threat to a business’s financial position。
Heavy borrowing can bring a big interest burden to a small business；
especially when interest rates rise unexpectedly。 This may be acceptable
when sales and profits are good； however； when times are bad； bankers；
unlike shareholders； cannot be asked to tighten their belts – they expect to
be paid all the time。 So the position audit is not just about profitability； but
about survival capabilities and the practice of sound financial disciplines。
Achieving growth
Making profit and surviving are insufficient achievements in themselves to
satisfy either shareholders or directors or ambitious MBAs – they want the
business to grow too。 But they do not just want the number of people they
employ to get larger； or the sales turnover to rise； however nice they may
be。 They want the firm to bee more efficient； to gain economies of scale
and to improve the quality of profits。
ACCOUNTING RATIOS
Ratios used in analysing pany accounts are clustered under five headings
and are usually referred to as ‘tests’：
。 tests of profitability；
。 tests of liquidity；
。 tests of solvency；
42 The Thirty…Day MBA
。 tests of growth；
。 market tests。
The profit and loss account and balance sheet in Tables 1。7 and 1。8 above
will be used； where possible； to illustrate these ratios。
Tests of profitability
There are six ratios used to measure profit performance。 The first four profit
ratios are arrived at using only the profit and loss account and the other
two use information from both that account and the balance sheet。
Gross profit
This is calculated by dividing the gross profit by sales and multiplying by
100。 In this example the sum is 30；000 / 60；000 × 100 = 50％。 This is a measure
of the value we are adding to the bought…in materials and services we need
to ‘make’ our product or service； the higher the figure the be。。er。
Operating profit
This is calculated by dividing the operating profit by sales and multiplying
by 100。 In this example the sum is 8；700 / 60；000 × 100 = 14。5％。 This is a
measure of how efficiently we are running the business； before taking
account of financing costs and tax。 These are excluded as interest and tax
rates change periodically and are outside our direct control。 Excluding
them makes it easier to pare one period with another or with another
business。 Once again the rule here is the higher the figure the be。。er。
Net profit before and after tax
Dividing the net profit before and a。。er tax by the sales and multiplying
by 100 calculates these next two ratios。 In this example the sums are
8；100/60；000 × 100 = 13。5％ and 6；723/60；000 × 100 = 11。21％。 This is a measure
of how efficiently we are running the business； a。。er taking account of
financing costs and tax。 The last figure shows how successful we are at
creating additional money to either invest back in the business or distribute
to the owner（s） as either drawings or dividends。 Once again the rule here is
the higher the figure the be。。er。
Return on equity
This ratio is usually expressed as a percentage in the way we might think
of the return on any personal financial investment。 Taking the owners’
viewpoint； their concern is with the profit earned for them relative to the
amount of funds they have invested in the business。 The relevant profit
here is a。。er interest and tax （and any preference dividends） have been
Accounting 43
deducted。 This is expressed as a percentage of the equity that prises
ordinary share capital and reserves。 So in this example the sum is： return
on equity = 6；723 / 18；700 × 100 = 36％。
Return on capital employed
This takes a wider view of pany performance than return on equity
by expressing profit before interest； tax and dividend deductions as a
percentage of the total capital employed； irrespective of whether this capital
is borrowed or provided by the owners。
Capital employed is defined as share capital plus reserves plus long…term
borrowings。 Where； say； a bank overdra。。 is incl
