Monday, December 30, 2019

Tanga Cement Company Ltd Has Been Doing Well Finance Essay - Free Essay Example

Sample details Pages: 8 Words: 2279 Downloads: 8 Date added: 2017/06/26 Category Business Essay Type Research paper Did you like this example? In this century the uses of financial analytical tools such ratio analysis, trend analysis and common sized analysis is inevitable in any organization or company operations. So in order for the company to succeed it must effectively use financial analysis tool. This is because financial analytical tools help to know the health of the business, how to plan for future, if the business have inventories to support production target, or if the firm have ability to pay creditors and also to provide indicators of how well the firm and its business units are performing. Don’t waste time! Our writers will create an original "Tanga Cement Company Ltd Has Been Doing Well Finance Essay" essay for you Create order The financial analysis is also undertaken by shareholders, investors, suppliers of funds and suppliers of inventories and so on (Arora 2012). This report is about the interpretation of financial statements at Tanga Cement Company by using financial analysis tools. This report is divided into four parts. Part one is about background of the case study (Tanga Cement), part two is concerned with financial analysis and tools used in analyzing the financial performance of Tanga Cement, part three is about limitation on analytical tools used and part four comprises of conclusion. The study revealed that Tanga Cement Company Ltd has been doing well in production and it is making reasonable profit year after year. This revelation has been resulted from the Company financial Statements and Financial Analytical tools (Ratio Analysis, Common sized analysis and Trend Analysis). LIST OF TABLES Table 1 Tanga cement balance sheetÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.3 Table 2 Tanga cement income statementÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦4 Table3: Summary of return on sales ratios ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦6 Table 4: Summary of return on Assets ratiosÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.6 Table 5: Summary of current ratiosÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡  ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..7 Table 6: Summary of quick ratiosÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.8 Table 7: Summary of inventory turnover ratiosÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.8 LIST OF ABBREVIATIONS IT: Information Technology FIFO: First in First out LIFO: Last in First out ROS: Return on Sales TABLE OF CONTENTS EXECUTIVE SUMMARY ii LIST OF TABLES i LIST OF ABBREVIATIONS ii 1.0: BACK GROUND OF TANGA CEMENT COMPANY iv 2.0:FINANCIAL STATEMENTS, ANALYTICAL TOOLS AND ITS INTERPRETATIONS. v 2.1 Financial statements v 2.2 Financial Analysis v Table 1. TANGA CEMENT BALANCE SHEET vii Table 2. TANGA CEMENT INCOME STATEMENT viii 2.2.1 Trend analysis viii 2.2.2 Ratio analysis viii 3: LIMITATIONS ON FINANCIAL ANALYTICAL TOOLS USED xiii 4: CONCLUSION xiv REFERENCES xvi 1.0: BACK GROUND OF TANGA CEMENT COMPANY According to Tanga Cement Website (2011), Tanga Cement is a cement company based in Tanzania. The company was founded in 1980 in alliance with the government of Denmark in 1989, as a state company of the Tanzanian government, entered into a management contract with Holcim Cement of Switzerland. In 1996 the government began to privatize the company and as of 2007 it is owned by public and by Holcim Mauritius. Currently company ownership is as follows: 62.5% Afrisam Mauritius 36.25% Tanzania General Public Institutions 0.75% Employees Share Trust Moreover company production capacity is more than 1,250,000 tones/year where it targets the market demand of Tanzania. With 15000 Tanzanians being the shareholders, Tanga cement shares trade under its brand name Simba, at Dar es Salaam Stock Exchange. The Company produces its financial report in annual bases where those financial reports are uploaded to the website so that every shareholder can check the company financial position online. In our analysis we have taken the yearly financial reports from 2006 up to 2008 as a company financial reports study analysis. 2.0:FINANCIAL STATEMENTS, ANALYTICAL TOOLS AND ITS INTERPRETATIONS. 2.1 Financial statements Financial statements are the summary report that shows how a firm has used the funds entrusted to it by its shareholders and lenders, and what is current financial position (businessdictionary.com 2012). There are three (3) financial statements such as balance sheet, income statement and cash flow. Balance sheet is the financial statement which contains information about resources and the obligations of the entity and about its owners interests in the business at a particular point of time i.e. assets, liabilities and owners equity. Income statement (profit and loss account) is the financial statement which shows the summary of revenues, expenses and net income/loss of a firm during the accounting period. It serves as a measure of the firms profitability. Cash flow statement is the financial statement which shows inflows and outflows of cash during the specific period. 2.2 Financial Analysis Financial Analysis is an assessment of the effectiveness with which funds (investment and dept) are employed in a firm, efficiency and profitability of its operations, and value and safety of debtors claims against the firms assets (businessdictionary.com 2012).There are three (3) techniques and tools that were used in the analysis of financial statements of Tanga cement, such tools includes Trend analysis, Common sized and ratio analysis. SIMBA CEMENT INCOME STATEMENT  YEARS  2008 2007 2006  Tzs000 Tzs000 Tzs000 Revenue sale of goods 121,349,244 93,784,426 77,626,645 Cost of sales 68,871,990 51,057,886 -45,952,752 Gross profit 52,477,254 42,726,540 31,673,893     Other operating income 999,277 1,267,303 396,414 Other operating expense -146,016 Selling expenses 0 Administrative expenses -7,327,710 -7,590,738 -7,148,240 Depreciation and amortization -2,207,366 -2,024,505 -1,895,277 Profit from operations 42,799,272 34,378,600 23,026,790     Share of profit of associates 987,282 431,432 90,000 Finance cost -312,057 -122,720 -137,377 Finance revenue 31,382  1,553 Foreign exchange gains /(losses) -286,853 -265,467 84,457 Impairemnt of an associate Profit before tax 43,219,026 34,421,845 23,065,423 Income tax expense -12,965,708 -10,831,187 -7,067,479 Profit for the year 30,253,318 23,590,658 15,997,944     Gaining in fair value    Total comprehensive for year 30,253,318 23,590,658 15,997,944 Basic earnings per share (Tzs) 475 371 251 Diluted earnings per share (Tzs 475 185 251 Table 1. TANGA CEMENT BALANCE SHEET COMPREHENSIVE BALANCE SHEET FOR TANGA CEMENT AS AT 31 DECEMBER  YEARS 2008 2007 2006 Tzs000 Tzs000 Tzs 000 ASSETS    Non-current assets    Property, plant and equipment 58,776,827 40,811,579 25,226,657 Intangible asset 39,836 79,674 119,512 Due from Employees share trust 133,009 Investment in associates 468,959 435,677 418,246  59,285,622 41,326,930 25,897,424 Current assets    Inventories 21,138,953 17,688,472 9,113,426 Accounts receivable third party and other 4,600,852 3,219,070 3,906,770 Cash and bank 3,804,282 6,552,597 10,112,629  29,544,087 27,460,139 23,132,825 TOTAL ASSETS 88,829,709 68,787,069 49,030,249     EQUITY AND LIABILITIES    Capital and Reserves    Issued share capital 1,273,421 1,273,421 1,273,421 Re-valuation surplus 2,795,906 2,933,351 3,081,673 Retained earnings 57,337,761 46,307,762 31,100,806  61,407,088 50,514,534 35,455,900     Non-current Liabilities    Provision for site restoration 53,444 49,443 45,442 Deferred tax provision 6,340,887 3,795,940 4,467,136  6,394,331 3,845,383 4,512,578     Current liabilities    Interest bearing borrowing 6,078,136 1,027,386 419,554 Trade and other payables 14,422,864 11,547,684 8,627,451 Income tax payable 527,290 1,852,082 14,766  21,028,290 14,427,152 9,061,771 TOTAL EQUITY AND LIABILITIES 88,829,709 68,787,069 49,030,249 Table 2. TANGA CEMENT INCOME STATEMENT 2.2.1 Trend analysis This is the financial analytical tool which compares two or more years financial data to study the trends. According to a lecture delivered as part of module ARUM58EKM, It involves the calculation of percentage relationship that each statement item bears to the same item in the BASE YEAR (Arora 2012). 2.2.1.1The trend Analysis for Tanga cement The analysis and interpretation of the financial statements of Tanga cement made with calculation of trend percentages comes out with the following: Sales and cost of goods sold have shown a positive increase throughout the three years. This situation is viewed as favorable because it enhances the increase the in gross profit. So Tanga cement should try to maintain the strategy is using in increasing its sales. Net profit was tremendously increasing from year to year accompanied with the increase of fixed assets and capital and reserves. The analysis shows that the situation is favorable and the company has a good policy of manufacturing and trading. 2.2.2 Ratio analysis Ratio analysis is the financial analytical tool which is used to explain the important association between figures shown on a balance sheet, in income statement, cash flow statement or in any other part of accounting organisation. Ratios show how one number is related to another. It may be expressed in the form of co-efficient, percentage, proportion, or rate (accountingformanagement.com 2011) 2.2.2.1 Ratio analysis and valuation for Tanga Cement Company a. Profitability Ratio According to Atrill P and McLaney E (2008) is the ratio that provides an insight to the degree of success of the business in making the good profit to their owner. Return on Sales This ratio is used to evaluate companys operational efficiency. It is also known as operating profit margin. It shows how much profit is produced per Shs of Sales. Increase in ROS it shows the company is growing more efficient while a decreasing in ROS could signal looming financial troubles. Return on Sales = Net Income (before tax and interest changes) Sales Year 2010 2009 2008 Tanga Cement 0.305 0.376 0.353 Standard 1.91 1.91 1.91 Table3: Summary of return on sales ratios In our analysis we found the average ROS for Tanga Cement is 0.23 while the industry average ratio is 1.91 so this implies that the company is not operating efficiently because its ROS value is low from the industry average. The management of Tanga cement should try to come up with a good strategy that will help them to boost profit and sales. Return on Assets This ratio is used for measuring the return of total investment in the firm. Return on Assets = Net Income after Tax x100 Total Asset Year 2008 2007 2006 Tanga Cement 34.05% 34.29% 32.6% Standard 1.81% 1.81% 1.81% Table4: Summary of return on Assets ratios For Tanga Cement we found that, the average return on asset is 33.64 while industrial average ratio is 1.81%.This shows that Tanga Cement is significantly above the industry average ratio. For this case the company is in a good position on the return of total investment, hence the company has high ability of growing. b. Liquidity Ratio According to Atrill P and McLaney E (2008) It is the vital to the survival of the business that there is sufficient liquid resource available to meet maturing obligation (that is amount owing that must be paid in the near future). Mostly it is measured by Current Ratio and the Quick Ratio. Current Ratio This ratio falls under category of liquidity ratio it measures companys ability to meet its maturing short term obligation Current Ratio = Current Asset x100 Current Liabilities Year 2008 2007 2006 Tanga Cement 1.4 1.9 2.55 Standard 1.83 1.83 1.83 Table5: Summary of current ratios Current ratio for Tanga Cement is 1.94 times while industrial ratio is 1.83 times. Hence this indicates that Tanga Cement is in a good position to meet its both long term and short liabilities which is good because, in situation like this the company can grow. Quick Ratio The ratio measures the companys ability to meet its short term obligation with its most liquid assets. Quick Ratio = Current Asset -Inventories Current Liabilities Year 2008 2007 2006 Tanga Cement 0.4 0.68 1.55 Standard 1.09 1.09 1.09 Table6: Summary of quick ratios Quick ratio for Tanga Cement is 0.87 times while industrial average ratio is 1.09 times, this indicates that Tanga Cement is below industrial average by 0.14 times. Hence this is not favorable financial position. The difference is not big but, the difference indicates the company cannot meet its entire obligation; it has to make sure it has enough cash to meet its obligation. c. Activity Ratios Inventory Turnover Ideally the ratio show how many times the companys inventory is sold and replaced over the period of time. Inventory Turnover = Cost of Sales Average Inventory Year 2008 2007 2006 Tanga Cement 3.26 2.89 5 Standard 10.46 10.46 10.46 Table7: Summary of inventory turnover ratios Inventory turnover in Tanga Cement is 3.71 times while the industry average is 10.46 times. This shows Tanga Cement is not in favorable financial position since its turnover is 3.67 times compared to 10.46 times of industrial average ratio, hence the degree at which the inventory will be sold and replaced in Tanga cement is 3.67 times, this is the low turnover. The company is doing worse on this part because its turnover is almost two times less from industry average.it shows that the companys resources have not been properly utilized. Analysis and interpretation of balance sheet and income statement for Tanga cement. 1. Capital and reserves at first increased by 1.12% from 2006 to 2007, in the year 2008 it declined by 4.31%. This means that the company in 2008 was generating much loss that caused its reserve to decrease as well as capital which resulted to decrease in company wealth. 2. Investment in non current assets increased from 52.18% to 66.74 from 2006 to 2008. The investment done in the preceding years was beneficial to the company thats why the investment in 2008 declined because there was no need of investing much. 3. Current assets generally have been decreasing from 47.18% to 33.29% from 2006 to 2008. Cash and bank was decreasing from year to year this is a good sign since short term obligations such as current liabilities have been resolved by cash and bank. The company has no need of holding cash and bank while it needs to make profit using that money 3: LIMITATIONS ON FINANCIAL ANALYTICAL TOOLS USED When calculating the financial ratios, may find getting two types of answers. Some ratios might be good and some might be bad ratios compared to industry standard, which will make it difficult to judge if the company is I a good position or not. Financial ratios are giving the actual financial picture of the company whether the company is going at the right or wrong direction. These ratios do not give a solution of what to do if things go wrong. In analytical tools, the data which is used is only accounting data instead of economic data. In doing financial ratios analysis, data that is used are obtained from bank statement, balance sheet and cash flows of previous years. This shows that they are using historical data which is bad because they do not reflect the actual economic situation. In financial analysis ,data obtained cannot be used alone, the data obtained must be compared with other data so as to get actual interpretation Different accounting practices can di stort comparison even within the same company. A good example is one can use LIFO and one use FIFO; the answers will definitely be different. The set standard industry financial ratios are not authentic because the levels of business differ from place to place. A good example is on IT industry. The level of technology in third world countries is very low, so logically third world countries wont be able to meet the set standard due to our level of technology. 4: CONCLUSION Tanga Cement Company Limited has been doing well in production and making sound profit year after year. Tanga Cement is also the second largest cement producer in Tanzania with a production of 1.25 million tpa capacity. Tanzania Portland Cement in Dar es Salaam is the major (largest) producer with a production capacity totaling 1.4 million tpa. This revelation has been resulted from the Company financial Statements and Financial Analytical tools (Ratio Analysis, Common sized analysis and Trend Analysis). Generally the performance of Tanga Cement Co. LTD is good.

Sunday, December 22, 2019

Likert’S 4 System Approach Was Published In 1961, And Likert

Likert’s 4 System Approach was published in 1961, and Likert argues for what he considers is a â€Å"generalized theory of organization† (Mumby 100). Likert sums it up that all organizations can be summarized into one of four systems. Each of these systems reflect a certain leadership style reflected in an organization and they also consist of 7 dimensions. The seven dimensions are as follows; employee motivation, the characterization of the communication process, the interaction-influence process, decision making process, the type of goal setting, the control processes and its performance characteristics. Likerts 4 System Approach consists of the Exploitive-authoritative approach, Benevolent-authoritative, Consultative and Participative.†¦show more content†¦On the Plante Moran website they’ve posted their client satisfaction rates that supports our claim. Plante Moran used an independent firm to conduct a survey to the clients that they serve and positive feedback was received. Between 95-99% of their clients agreed that they would recommend Plante Moran to other people and companies, they across the board agreed that the staff at Plante Moran are trustworthy, courteous and professional. The staff is responsive and takes the time to build relationships with clients. The staff at Plante Moran are industry experts and they demonstrate technical expertise and delivers on their promises. Bottom line, Plante Moran meets all the needs of their clients. Throughout their customer focused ideology, and being a participative system approach Plante Moran has succeeded and strengthened their company wholly. They hold a 13% turnover rate when the industry standard is 15%, and the communication processes within Plante Moran keeps projects on track and promotes a healthy relationship with the staff and clients equating to higher productivity organizationally- wide. According to Mumby, Likert advocated specifically for the participative approach because it â€Å"most effectively taps into human resources and is the most productive organizational system† (Mumby 101) RECOMMENDATION/ACTIONS: 1. Create an informal support group or type of dialogueShow MoreRelatedZappos Holocracy6731 Words   |  27 Pages This strategy would entail a manager-free system that will enable Zappos to adapt and become one of the largest companies to implement this management system. The future of Zappos just might depend upon how well this innovative way of thinking is received, implemented and executed. Many industries will be observing this new management technique in action and its success rate, and if all goes well, Zappos could conceivably have a new management system to impart to other companies (Groth, 2013)Read MoreLibrary Management204752 Words   |  820 PagesSeries Library and Information Center Management, Sixth Edition Robert D. Stueart and Barbara B. Moran United States Government Information: Policies and Sources Peter Hernon, Harold C. Relyea, Robert E. Dugan, and Joan F. Cheverie Library Information Systems: From Library Automation to Distributed Information Access Solutions Thomas R. Kochtanek and Joseph R. Matthews The Complete Guide to Acquisitions Management Frances C. Wilkinson and Linda K. Lewis Organization of Information, Second Edition Arlene

Friday, December 13, 2019

Investment Portfolio Analysis Free Essays

B6201 – Investments/portfolio theory| Investment Portfolio Analysis| Course Project Task 6| | Crystal Watkins| 10/17/2012| This paper will Identify and explain the major factors driving the market during this week. It will also identify and explain causes of changes in the market and the index. As well as developed investment objectives and defined risk tolerance levels. We will write a custom essay sample on Investment Portfolio Analysis or any similar topic only for you Order Now I will also include a snap shot of my investments and an explanation of why I choose those particular companies. | The trends that I noticed that were going on with my investments this week were: * Apple – Apple  has asked  Foxconn  to tighten quality control measures while manufacturing the iPhone 5 after complaints of scratches on the device’s body, and that has worsened  its supply shortfall. Stricter benchmarks are affecting production of the anodized aluminum housing used in the device, delaying orders for the  phone,  Bloomberg  said. Apple consumers started complaining of nicks and scrapes to the body of the new phone soon after its launch last month, with some saying there were scratches even before the device was unpacked. While the company said in response to the complaints that it was â€Å"normal† for an aluminum product to â€Å"scratch or chip with use, exposing its natural silver color,†Ã‚  internally, it expressed its displeasure to Foxconn. (Rathee, 2012) * Microsoft – Microsoft  is  reportedly  bringing its flagship product, Microsoft Office to both Apple and  Google’s  Android-based devices. This comes from Microsoft’s Czech Republic Team, and Petr Bobek, a Microsoft Office productivity manager. Microsoft has been hesitant in the past to bring its software outside of the Windows ecosystem, with the noted exception of haphazard versions of Microsoft Office being available for Mac. Bringing Office to iOS and Android, the two dominant mobile operating systems, would be a change in philosophy for Microsoft. (Ciaccia, 2012) * Johnson Johnson – The delay for Eliquis is perhaps not unexpected given the size of the trial and the mass of data collected. No matter, it is widely believed to be more efficacious and safer than its  Johnson Johnson’s  Xarelto and Boehringer Ingelheim’s Pradaxa. If approved, it will likely see strong sales growth. The delay will no doubt please JNJ shareholders whose rival drug Xarelto is only just establishing sales. Its partner Bayer has been forecasting peak sales of over Euro 2 billion for Xarelto even after the FDA refused to expand its indications. If these sorts of numbers are baked into JNJ’ forecasts and Eliquis (if approved) starts to grab market share then this will be a blow. (Samaha, 2012) * Pfizer – Pfizer had four major events expected. It had one success (Inlyta), one failure (bapineuzumab) and two delays. As ever with pharma the patience of a Saint is needed. The two biggest drugs (Eliquis and Tofacitinib) saw potential approvals delayed until November and March next year respectively. Both are expected to be blockbusters. (Samaha, 2012) * Nike – Corporate Responsibility Magazine has named Nike one of its top corporate citizens. The magazine ranked the Top 10 Best Corporate Citizens  in categories including consumer items, consumer stables, energy and health care. Nike topped the consumer items list, sharing the honor with Mattel and Gap. The rankings were determined using public data related to companies’ responses to climate change, employee relations, environment, governance and human rights, among other variables. [ (Journal, 2012) ] * Sprint – Sprint Nextel Corp. ’s Chief Executive Officer Dan Hesse, who took over in December 2007, has worked to fix the mess he was handed after Sprint’s $36 billion acquisition of Nextel in 2005 failed, causing 3. 1 million subscribers to leave the carrier. Now he says that Sprint is on track to return to the black in 2014. Wall Street has shown increasing faith. Sprint shares are up more than 122% this year, but Hesse is quick to qualify his optimism. I tell the team here, â€Å"You’re not going to see any mission  accomplished  signs anywhere on this campus. †? Bloomberg Business Week reported, that this is a long process. (Marin, 2012) * Verizon – Earlier in the year, wireless carrier  Verizon said  it was planning on expanding its 4G LTE coverage to span over 400 markets by year’s end. That was an aggressive goal considering it started the year with only about 190, meaning it was looking to more than double that figure in just one year. Turns out that Big Red wasn’t just being overly ambitious, and is actually reaching that goal ahead of time. Speaking at MobileCon, a conference all about mobile IT, Verizon CTO Nicola Palmer said  the carrier is launching LTE in a handful of markets on Oct. 18, bringing its total tally up to a whopping 417, further extending its LTE lead against rivals  AT;T  and  Sprint Nextel. (Evan Niu, 2012) * Target – Radio Shack’s partnership with  Target Corp. to place its employees in Target electronics departments is a money-losing deal that Radio Shack should consider ending. The deal, signed in 2009 and  expanded upon in 2011, hasn’t replaced the revenue generated by an earlier agreement Radio Shack had to run kiosks in Wal-Mart Stores Inc. Radio Shack’s Target business lost $17 million more than it did in 2010, Chai said. But the two companies are apparently working to improve things. Radio Shack’s kiosks now get placement in Target circulars, and Radio Shack is boosting training of its staff. [ (Journal S. P. , 2012) ] * Wal-Mart – Wal-Mart Stores Inc. , the world’s largest retailer, rose to the highest ever after the company’s U. S. merchandising head said the back-to-school season was â€Å"very strong. † The shares climbed 3. 3 percent to $76. 59 at 12:46 p. m. in New York after earlier reaching $76. 73, the highest intraday price since its initial public offering in 1970. The stock also gained after  Costco Wholesale Corp. posted fiscal fourth-quarter profit that topped analysts’ estimates. Costco rose 3. 5 percent to $103. 08. (Townsend, 2012) * Toyota – Toyota  is issuing a safety recall for 7. 43 million vehicles across the globe. The Japanese car manufacturer said 2. million of the vehicles with potential window problems are in the U. S. The issue involves the power window master switches of some of the company’s most well-known brands, including Camry and Corolla sedans and RAV4 sport utility vehicles, built between 2005 and 2010. Toyota  said in a press release that commercial lubricating agents applied to a â€Å"sticky† window switch could potentially melt t he switch or even cause a fire. [ (Carroll, 2012) ] Dow  Ã‚  0. 95%  Nasdaq  Ã‚  1. 21% Your portfolios: WatkinsC Total Value $1,001,095. 54 Today’s Change 7,944. 81  0. 80% SYMBOL| PRICE| CHG  ;  % CHG| 52-WK RANGE| SHARES| MKT VALUE| GAIN  ;  % GAIN| AAPL| 649. 7925| 15. 03| +2. 37%| 363. 32| 705. 07| 150| $97,468. 87|   $15,001,156. 13|   99. 35%| JNJ| ^69. 55| 0. 95| +1. 38%| 61. 05| 69. 80| 1,464| $101,821. 20|   $146,113,831. 92|   99. 93%| MSFT| 29. 49| -0. 02| -0. 07%| 24. 30| 32. 95| 3,247| $95,754. 03|   $324,418,062. 99|   99. 97%| NKE| 97. 24| 1. 63| +1. 70%| 85. 10| 114. 81| 990| $96,267. 60|   $98,795,822. 40|   99. 90%| PFE| ^25. 80| 0. 23| +0. 90%| 18. 15| 25. 92| 4,144| $106,915. 0|   $414,099,477. 12|   99. 97%| S| ^5. 69| 0. 00| +0. 00%| 2. 10| 6. 04| 19,493| $110,915. 17|   $1,949,171,346. 20|   99. 99%| TGT| 62. 90| 1. 09| +1. 76%| 47. 25| 65. 80| 1,549| $97,432. 10|   $154,687,926. 41|   99. 94%| TM| 77. 32| 1. 11| +1. 46%| 60. 37| 87. 15| 1,222| $94,485. 04|   $121,996,414. 80|   99. 92%| VZ| 44. 08| -0. 42| -0. 94%| 35. 32| 48. 77| 2,207| $97,284. 56|   $220,552,175. 14|   99. 96%| WMT| ^76. 91| -0. 24| -0. 31%| 54. 81| 77. 60| 1,336| $102,751. 76|   $133,318,224. 24|   99. 92%| Total| | | | | | | $1,001,095. 4|   $3,578,154,437. 34|   99. 97%| The above chart is a snap-shot of my portfolio for the week of October 17th as you can see I made a 0. 80% increase or $7,944. 81  cash profit since my initial investment, which is a $ 7069. 02 positive difference and a huge increase from last week’s profits. Works Cited Carroll, D. (2012, October 10). Toyota Recalls 7. 43 Million Vehicles. Retrieved October 10, 2012, from The Mootley Fool: http://www. fool. com/investing/general/2012/10/10/toyota-recalls-743-million-vehicles-globally. spx Ciaccia, C. (2012, October 10). Here’s Microsoft’s Most Bullish Move in Years. Retrieved October 10, 2012, from The Stre et: http://www. thestreet. com/story/11733394/1/heres-microsofts-most-bullish-move-in-years. html? puc=yahoo;cm_ven=YAHOO Evan Niu, C. (2012, October 10). Verizon’s Big Red Footprint Gets Bigger. Retrieved October 10, 2012, from The Mootley Fool: http://www. fool. com/investing/general/2012/10/10/verizons-big-red-footprint-gets-bigger. aspx Journal, P. B. (2012, October 9). Nike on ‘Best Corporate How to cite Investment Portfolio Analysis, Essay examples

Thursday, December 5, 2019

Critical Evaluation Of Customer Centricity †MyAssignmenthelp.com

Question: Discuss about the Critical Evaluation Of Customer Centricity. Answer: Introduction: The report aims at providing a critical evaluation of customer centricity. Customer centricity refers to a strategy for fundamentally aligning the services and products and services of the company with the needs and wants of the valuable customers. Being customer centric refers to the means of doing business with the customers in a manner that puts forward a customer experience for driving repeated business, profits and customer loyalty. Nowadays, various E businesses are also adopting customer centric means for the sale of their products and services. In this context, the examples of Zappos and Amazon require a prime mention on following a customer centric approach. Customer Centricity is something more than offering a genuine customer service as it involves offering greater experience from the stage of awareness through the process of purchase. The article would consider three peer-reviewed journals for establishing the prospective of customer centricity in the context of E busines s. Critical Evaluation of Customer Centricity in the Prospect of E Business According to Shah et al (2014), the customer centricity concept is not something new whose benefits are under discussion for over 50 years. There were also proposals put forward that firms should not only focus on selling the products but on the fulfillment of the customer centric needs. However, business community recently embraces the importance of the customer centric approach. According to Shah et al (2014), less than 20 percent of the marketing organizations amongst 1000 have evolved successfully for leveraging the capabilities, value added process and customer centric approach. If one goes by history, then he or she will be able to find that the firms were more products centric. The economies of the scale and scope have been central since profits were a direct reflection of the market share. Thus, the firms have been more oriented internally with much of the attention focused on the manufacture of the superior products instead of inclining towards the users and purchasers of th e products. However, revolution in the latter half of 20th century led to the introduction of some unusual improvements in the collection, storage, analysis and transmission of huge quantity of information. This led to the realization amongst the firms that put forward a greater opportunity for the firms including those with E business facilities in investing in the Information Technology (IT) for management of customer relationships. Customer RelationshipManagement (CRM) became the catchphrase that also motivated the companies in making substantial investment in various software packages related to CRM, initiatives for database marketing and infrastructure for supporting marketing that is technology driven (Fader and Peter 2012). Such firms expressed their motivation for achieving a continuous dialogue across all the touch points related to the customer along with maintaining a personalized treatment for the valuable customers. However, the real scenario was that most of the compan ies lacked the necessary customer centricity for realizing such benefits. Moreover, according to Shah et al (2014), customer centric organizations are bounded together via a central value where each decision began with anticipated opportunities and customer for benefit. However, a common norm within the customer centric organizations is that the employees act as the customer advocates. Another unique norm shapes the willingness of the individual employees for sharing information with their peers so that the organization remains in better position for meeting the needs of the customers. As per Lamberti (2013), until the 1980s the concept of customer centricity was nothing more than business philosophy or an idealized policy statement. However, the current reflection of Customer centricity represents a situation experienced by concept of marketing. The refinement and implementation of the marketing concept through analysis of the constituting elements and the antecedents represented the base for development of a theory of market orientation. For explaining the conceptualizations of the customer centricity, he regarded the concept as opposite to the concept of product centricity. The fundamental assumption for product centricity lies in seeing the company as repository of the competences and the resources for the development of products and services. Such services and products represent the basic value proposition on which the company acts for pleasing a number of customers thereby modifying the offer for meeting the expectations of the customers. Customer centricity thus focuses the attention on establishment of the mutually satisfactory relationships amongst the customers. The individual customer expresses their needs according to which the resources of the company activated for developing solutions for satisfying such needs. Presently, there has been criticism on the actual sustenance of a customer centric approach there by putting forward lesser extreme views where a resource focuses on the economic effectiveness of customer centricity. Thus, (Bonacchi and Perego 2013) states that, firms including E business do not only adopt the principles of customer centricity but they also operate in the continuum that focuses on moving from the product centricity to the customer centricity. Customer Centricity is associated with the companys capability in generating the intelligence of the customers, processing data and gathering information for building the repositories of the comprehensive data regarding the interactions between the firm and the custo mer and in supporting the modified marketing activities (West Ford and Ibrahim 2015). The concept of customer centricity also actively involves the customers in the innovation and the marketing process thereby co creating a value with the same. In addition to this, customer centricity helps in shifting the focus from service offered towards a newer customer experience for creating the value in a manner that remains related to the customers. According to Kamble (2012), Customers remains the most important assets for an organization. In order to ensure continuity of business and become competitive, there is a need for development of customer centric approach that touches all the points of customer interaction. The approach of customer centricity helps organization in acquiring, retaining and growing their customer base. The key element of a customer centric approach remains in being sensitive to the needs of the clients and the proactive approach in interacting with the clients.Effective management of the customer needs acts as vital differentiator for todays businesses. Companies are also changing on how they are marketing the products for better satisfying the needs of the customers. Traditional marketing has also become less effective and more expensive with time. Companies are making use of the internet for entering into dialogue with the customers. With the emergence of the internet, it has become possible in gaining permission for discussion of products. Nowadays, internet provides the platform for research, advertising, sales, promotions and customer support. Eventually the companies focus on the development of relationships with the customers that will allow them continuous re supply. Deploying the customer centric approach into E business framework requires careful understanding of the framework (Richardson, James and Kelley 2015). Customer centricity refers to the streamlining of the objectives of the firms for catering them towards the customers. In such a scenario, for the success of the E business framework it is necessary to follow a holistic approach in dealing with the customers. The E business must however consider that the customers represent an important asset for the company therefore; it must align all its business activities for serving the customers in an effective manner. There are various activities related to the customers that surround the framework for E business. This involves, understanding the value proposition of the customers, modified business offerings for customer, ensuring the building of customer understanding for each interaction, building the advisory relationships, analysis of the wants and needs of the customers, deployment of a c ustomer centric virtual framework and delivery of effective and prompt service. Conclusion: To conclude, it can be said that customer centricity represents an indefinable goal for most organizations. However, organizations have managed in successfully traversing the path of customer centricity that has helped in reaping richer rewards in the form of the loyal customers and financial performance. Customer centricity enables the firms in achieving a sustainable competitive advantage not countered easily through competition. Thus, customer centricity happens to be an essential condition for the firms of the 21st century thereby helping them to do well in the market place. References: Bedarkar, M., Pandita, D., Agarwal, R. and Saini, R., 2016. Examining the impact of organizational culture on customer centricity in organizations: An analysis.Prabandhan: Indian Journal of Management,9(2), pp.19-28. Bonacchi, M. and Perego, P., 2013. Improving profitability with customer?centric strategies: the case of a mobile content provider.Strategic Change,20(7?8), pp.253-267. Fader and Peter,. 2012. Customer centricity: Focus on the right customers for strategic advantage. Wharton digital press Galliers, R.D. and Leidner, D.E. eds., 2014.Strategic information management: challenges and strategies in managing information systems. Routledge. Kamble, A., 2012. Aligning Customer-centric Approach to E-commerce Framework. Kilara, T. and Rhyne, E., 2014. Customer-Centricity for Financial Inclusion. Lamberti, L., 2013. Customer centricity: the construct and the operational antecedents.Journal of Strategic marketing,21(7), pp.588-612. Loshin, D. and Reifer, A., 2013.Using information to develop a culture of customer centricity: customer centricity, analytics, and information utilization. Elsevier. Mohapatra, S., 2013. E-commerce Strategy. InE-Commerce Strategy(pp. 155-171). Springer, Boston, MA. Richardson, N., James, J. and Kelley, N., 2015.Customer-centric Marketing: Supporting Sustainability in the Digital Age. Kogan Page Publishers. Shah, D., Rust, R.T., Parasuraman, A., Staelin, R. and Day, G.S., 2014. The path to customer centricity.Journal of service research,9(2), pp.113-124. West, D.C., Ford, J. and Ibrahim, E., 2015.Strategic marketing: creating competitive advantage. Oxford University Press, USA.