Accounting and Finance in AS Diena

| Категория реферата: Рефераты по бухгалтерскому учету и аудиту
| Теги реферата: конспект занятия, готовые рефераты
| Добавил(а) на сайт: Zhilov.

It should be noted that effective tax rate can deviate from the statutory tax rate during years. (The Profitability, Financing, and Growth of the Firm, p. 60) This difference can be seen in AS Diena’s case. The denominator in the ratio is profit before tax. In 1997 t was 27.47 per cent. (Table 1) However applying the same formula in 1996 this ratio was
60.32 per cent.

Current ratio; Quick ratio

The quick ratio shows the liquidity in very short terms when it is impossible to sell stock. Both ratios for AS Diena are similar and larger than 1 (Table 1). Thus, it should not be very hard for AS Diena to get over short-term problems. Little difference between these ratios indicates the low proportion of stock in current assets. In contrast, current ratio for
AS Preses Nams is 2 times more than quick ratio because it has large amount of stock.

Equity ratio

Equity ratio for AS Diena is 33.15 %, and it is 2 times less than for
AS Preses Nams. The reason for this difference is of similar nature as for
D / E discussed above.

Profit margin; Capital turnover

ROA depends on two factors. The first one is profit margin, and it is
13.15 %. (Table 1) The second factor is capital turnover that can indicate the speed of operations. The decomposition of ROA shows that the difference between AS Diena and AS Preses Nams in ROA is due to faster capital turnover in AS Diena’s case.

?E / E0 = ROE0 – Div / E0 + NI / E0

This formula decomposes equity changes. Because there was no new issue of shares in 1997, only profit and dividends affects equity for AS Diena.

ROE = (1 – t)(ROCE + (ROCE – COD) * D / E)

In this formula only interest-bearing debt should be taken into consideration. Thus COD was 7.99% (Table 1), and it is similar to COD for
AS Preses Nams, because there COD does not depend on company’s debt structure.

Conclusion

It is fair enough to say that it takes more than just analysing the
Annual Reports to draw serious conclusions about the accounting system and finance in the firm. However, some important findings can be listed to summarise the investigation conducted in the report.

First, there is no doubt that the computerised accounting system is the only one applicable for the company of the similar size because of the immense number of transactions and complicated structure of the business.

Next, the analysis has revealed some features that characterise the publishing and printing business:
. operating activities are mainly financed by short-term liabilities, most of them being non interest -bearing
. debtors are the main component of the current assets of the company, due to the need in the high level of stock turnover

To conclude, the AS Diena financial indices show an outstanding, if compared to competitors, business performance.

Reference list

Annual Report of AS Diena (1997).
Johansson, S. (1998) The Profitability, Financing, and Growth of the Firm,

Sweden: Studentlitteratur, Lund.
The State Register of Enterprises of Latvia (1999, Feb 18). [on-line],
Available: http://www.lursoft.lv/AppServer1?For...en=50972411&code=000300024

-----------------------

[pic]