Financial Statement Essay Example | Topics and Well Written Essays - 3000 words

Financial Statement - Essay Example Since it should be goal of he company to benefit its shareholders, it is called bottom-line measure of performance. Accordingly it is 22.5 % as calculated below Return on equity= Net profit after tax/ Total equity =m 467/ 2074 = 22.5 % for 2005-06 = " 392/1397 = 28.06 % for 2004-05 The decline in ROE in 2005-06 is due to abnormal increase in other reserves shown under equity... This is also known as Return on capital employed (ROCE) and also calculated on pretax profit. Liquidity/Solvency Liquidity means the speed and ease with which an asset can be converted into cash. Liquidity has two dimensions. Ease of conversion versus loss of value. Any asset can be converted into cash if its price is cut sufficiently. A highly liquid asset is therefore one that can be sold without significant loss of value. An illiquid asset is one that cannot be quickly converted into cash without a substantial price reduction. Assets are listed on the Balance Sheet in order of liquidity meaning that the least liquid assets are listed first. Current assets are Cash and those assets convertible into cash over the next 12 months. Bills Receivable for instance represents amounts collectible from the customers for sales already made to them. These are therefore expected to be realised in the near future. Inventory that is stock-in-trade is the least liquid of the current assets. Current Ratio is one of the best known and most widely used ratios to ascertain company's solvency/liquidity. It is defined as Current Ratio = Current Assets / Current Liabilities CurrentAssets m 3,666/Current Liabilities m 3,432 = Current Ratio1.07 for 2005-06" " 2,752/ "...Assets are listed on the Balance Sheet in order of liquidity meaning that the least liquid assets are listed first. Current assets are Cash and those assets convertible into cash over the next 12 months. Bills Receivable for instance represents amounts collectible from the customers for sales already made to them. These are therefore expected to be realised in the near future. Inventory that is stock-in-trade is the least liquid of the current assets. The current ratio of 1.07 indicates that company is efficient enough to use all its current assets without keeping them surplus and idle. It has also shown remarkable improvement from the last year's negative current ratio of 0.84. Quick ratio is calculated ignoring the value of inventory included in current assets for its obvious shortcomings of the least liquid of all current assets besides possible overvaluation and inclusion of damaged, obsolete and lost stocks. It can also include over purchased and slow moving items. These will impede liquidity. Quick Ratio or Acid -Test ratio is so named to indicate the current assets sans inventory's quicker liquidity. BA has no stock in trade as mentioned above except for "expendable spares and other inventories" valued m 83 since it is a service industry.

Conflict of Interest Essay Example | Topics and Well Written Essays - 1000 words

Conflict of Interest - Essay Example The biasness he will show at that point will give rise to conflicts. Moreover, an example may be, if there is some kind of affection between the boss and the employee and as a result the boss gives advantage to that specific employee. In this process unintentionally or intentionally other employees will suffer and this is what conflict of interests is all about. Now there are actually two types of conflicts; potential conflicts and actual conflicts. The potential conflict occurs when there is a divergence between the personal and professional interests of an individual. The above examples are potential conflict based. The actual conflict depends on the situation not on the actions of the individuals. Nowadays actual conflicts are not as common as potential conflicts are. Potential conflict can be considered as a red flag, which means that the person involved in the conflict must be careful with whatever he is doing before it turns out to transform into an actual conflict. As the pote ntial conflict can take the shape of an actual conflict that is why the officials should remain vigilant and they should keep a keen eye on whatever is happening in the organization (Campbell and Keith, 122-126). Conflict of interest has always been an indicator of moral wrongness. Moral wrongness refers to the act of doing something that is morally wrong. It is prohibited and prevented at all cost but if it happens then the consequences are devastating. There are two reasons on the basis of which conflict of interest are considered as an indicator of moral wrongness; 1. If a person who is involved in the conflict of interest does not know what he is doing, this negligent behavior has an adverse effect on the people he is being biased for and for those whom he is not being bias as well. This is morally wrong because every employee should be treated equally according to his rank and any kind of biasness among the employees will be considered morally wrong. 2. If the people who are su ffering don’t know at the moment that a conflict is taking place and the person who is involved in the conflict also doesn’t reveal this to them, then this whole act will be termed as deception. Deceiving someone is also morally wrong. It not only hurts the person but it also disappoints him. If equal effort is being made then what is the reason of this conflict of interest. Let us take the same example given above. It is related to an organization in which an employer hires his wife for a job. Their personal relation will obviously affect their professional life. The husband will obviously be bias for his wife. He will not consider her as an employee and as a result other employees will suffer. The amount of bonuses and promotions she will get will be much more then the amount given to other employees. Apart from this she will also not be fired for her lousy performance but she will be given many chances to improve herself while other employees will be fired at the in stant no matter how hardworking and efficient they are. This act will sometimes be noticed by the other employees and sometimes they will not be able to note that conflict is taking place. The moment they know that their boss is involved in a conflict they will definitely be disappointed and if in some cases they do not get to know then also the boss will be involved in a case of deception. This act of biasness and deception shows that conflict of interest is always an indicator of