ACCOUNTING & DECISION MAKING

Dyed in the Wool Limited

Dyed in the Wool Limited

Judgment in DITW's Financial Statements for 2012

DITW's financial statements, are the successful or extinct, have in general the same frame problems, needs and expectations, as operate in the same socio-economic environment, suffering. However, although all can share the problems, conditions hold Different reacting, showing differences Significant performance. Some of these conditions can be raised in a survey by Sampling, others that indicate the ability to react to the organization conditions market it is submitted, would need to be realized and raised from a monitoring such conditions and actions now before them.

Companies in the global scenario that is DITW's fand competitive today have a variety of responsibilities and objectives, among which there is the ability to attract and mobilize savings and direct them to those investments efficient generators of income needed to socioeconomic development of the community. The deficiencies of the correlation of variables in the world economic and financial are causing serious imperfections in the process of decision making business, generating harmful consequences, whether for the survival of enterprises to support social, either for their own efficiency. The theme of This work is the role of planning finance as a determinant in the success and failure of an organization.

Among the many challenges faced by Brazilian family enterprise in pursuit of survival, competitiveness and longevity, there are factors that are static (internal rate of return, payback rates financial), and there are also dynamic factors (Technology, knowledge, quality) that influence the fate of these DITW's financial statements.

Past studies allow broader understanding of the family business, since which shows the relationships among members of the family themselves and among the other elements of the company. The concept allows observing the dynamics and changes that involve the family business, even the most traditional. This change or continuity over time is displayed with greater enhancement through the lifecycle family enterprises, which shows the possible changes that will achieve them. Within the concept of the family business, and for a better understanding of future analysis object of study, should consider the concept of life cycle of family businesses.

Statement of Cash Flows for DITW for 2012

 

2012

Beginning Cash Balance

278,000

Total Revenue

3,000,000

Operating profit

378,000

Change in creditors

529000

Total Cash Inflows

4,185,000

Depreciation expenses

317,000.00

Loss from the sale of land and building

500,000

Change in stocks

715000

Change in debtors

89000

Change in expenditures

355000

Total Cash Outflows

1,976,000

2,209,000

Evaluating HomeSpun's Performance

Calculation Of Ratios For DITW

Profitability Ratios

2012

2011

ROA % (Net)

=

Net Income X 100

=

505

=

0.05

=

926

=

0.11

Total Assets

11,178

8,650

ROE % (Net)

=

Net Income X 100

=

505

=

0.07

=

926

=

0.20

Stockholders' Equity

6,922

4,642

ROI % (Operating)

=

Operating Income X 100

=

778

=

2.59

=

1,355

=

4.52

Invested Capital

300

300

Liquidity Ratios

2012

2011

Quick Ratio

=

Quick Assets

=

3,516

=

0.83

=

2,838

=

0.71

Current Liabilities

4,256

4,008

Current Ratio

=

Current Assets

=

6,225

=

1.46

=

5,492

=

1.37

Current Liabilities

4,256

4,008

Net Current Assets % TA

=

Net Current Assets

=

6,225

=

0.56

=

5,492

=

0.63

Total Assets

11,178

8,650

Debt Management

2012

2011

Borrowing Ratio

=

Total Borrowings

=

4256

=

0.61

=

4008

=

0.86

Equity

6,922

4,642

Asset Management

2012

2011

Total Asset Turnover

=

Revenue

=

26,387

=

2.36

=

28,853

=

3.34

Total Assets

11,178

8,650

Receivables Turnover

=

Revenue

=

26,387

=

12.83

=

28,853

=

15.11

Trade Receivables

2,056

1,909

Moreover, if HomeSpun is involved with projects related to mergers, acquisitions or involving the financial part is interesting to know the indicators of financial performance. It is not very common for project managers know well these indicators since most project managers are usually from areas of technical and non-finance or ...