the implementation of accounting principles in the financial practices .ppt

8/10/2019 The Implementation of Accounting Principles in the Financial Practices .ppt

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WELCOME TO THE

PRESENTATION

American International University-

Bangladesh (AIUB)


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PREPARED BY

Name:Md. Jubair Hossain

ID:05-05344-1

First Major:Management Information system (MIS)

Second Major:Accounting & Finance

Degree:Bachelor of Business Administration (BBA)


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The Implementation of Accounting Principles

in the Financial Practices of Alex LTD

Topic of this Presentation


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Introduction

This presentation is based on the report that has been

prepared to fulfill the requirement of Internship course of

Business Administration Program of American International

University-Bangladesh (AIUB). The main aim of this report is to

find out the financial policies of Alex Ltd. and compare them with

the standard accounting principles. Standard accounting principles

are those which are used to ensure clarity, uniformity, consistency

and accountability of accounting information. The problem will bethat, in real life, financial information are not arranged in such an

order to measure the extent how far these principles are being

really followed. But standards are necessary because they provide

organizations something to achieve for.


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Objectives

The objectives of the report can be categorized in two classes:

Broad Objective:To present a relative study betweenstandard accounting principles and that of the company.

Specific Objectives:

To give an overview of the company

To introduce the various products launched by AlexLtd.

To provide an outline of the accounting standards To analysis the financial performance analysis

To compare between company procedures and thestandards


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Limitations of the Study

Time frame for the research is limited. The adoption to theorganization takes a lot of time.

Large-scale research was not possible due to constraints andrestrictions posed by the organization.

The report was written from an individuals perception. So, allthe findings might not be objective.

Getting Relevant papers and documents have been extremelydifficult.

To protect the organizational confidentiality, some parts of thereport will be edited.

The management seems to get woks out of the intern ratherthan helping in the academic pursuit.


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Methodology of the study

In this study, exploratory research has been undertaken to

gain insights about company procedures and practices. Also both

the primary as well as the secondary form of information was used

to prepare the report.

Research design:As anExploratoryResearch,this report

will briefly reveal the overall activity of Alex Ltd. and also analyzes

the The Implementation of Accounting Principles in the FinancialPractices of Alex LTD. In this report data have been collected

from both primary and secondary sources.


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Methodology cont.

Primary Sources:

Oral interview with various officers of the company

Accounting records- vouchers, journal, ledgers etc; both in

electronic and paper Company manuals

Secondary Sources:

Various accounting related books and periodicals

Bangladesh Accounting Standard guide Website information


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Analysis of the study

The internship report entitled - "The Implementation of

Accounting Principles in the Financial Practices of Alex Ltd." will

discuss about financial performance applies in the Alex Ltd.

Ratio analysis:This analysis will show some ratio analysis

that has been done based on the companysannual report.


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Analysis cont.

Return on assets

0.140.13

0.110.12

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

Ratio

2009 2008 2007 2006

Years

Return on assets

2009

2008

2007

2006

Return on assets ratio is showing good return on the total assets.


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Analysis cont.

Coverage ratio

Coverage ratio is showing poor performance than last three yearsagainst interest and bank charges.

1.53

2.25

1.77

1.69

0

0.5

1

1.5

2

2.5

Ratio

2009 2008 2007 2006

Years

Coverage ratio

2009

2008

2007

2006


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Analysis cont.

0.15

0.16

0.14

0.15

0.13

0.135

0.14

0.145

0.15

0.155

0.16

Ratio

2009 2008 2007 2006

Years

Return on shareholders' equity

2009

2008

2007

2006

Return on shareholders equity

Net income has been decrease in 2009 than the last year againstthe equity of shareholders.


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Analysis cont.

Inventory turnover

7.26

4.47

6.13

6.92

0

1

2

3

4

56

7

8

Ratio

2009 2008 2007 2006

Years

Inventory turnover

2009

2008

2007

2006

Inventory management system is very good in 2009 than the lastthree years.


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Analysis cont.

Days of sales in inventory

5.62

9.84

6.46

7.04

0

2

4

6

8

10

Ratio

2009 2008 2007 2006

Years

Days of sales in inventory

2009

2008

2007

2006

This ratio is unexpectedly lower than the last year. The highervalue can be achieve when, for perishable goods, the valuebecome low; and the value of durable goods become higher.


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Analysis cont.

Current ratio

1.21

1.83

1.38

1.65

0

0.5

1

1.5

2

Ratio

2009 2008 2007 2006

Years

Current ratio

2009

2008

2007

2006

The company is maintaining a sufficient amount of current assetsin order to sustain their daily need.


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Analysis cont.

Inventory to net working capital

2.38

1.12

1.88

1.47

0

0.5

1

1.5

2

2.5

Ratio

2009 2008 2007 2006

Years

Inventory to net working capital

2009

2008

2007

2006

The ratio of 2009 is showing that the company has been able tofulfill its short term financial obligations very well than last year.


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Analysis cont.

Debt-to-asset ratio

0.71

0.55

0.640.61

0

0.1

0.2

0.3

0.4

0.50.6

0.7

0.8

Ratio

2009 2008 2007 2006

Years

Debt-to-asset ratio

2009

2008

2007

2006

Judging the ratios of four years, the year 2009 have the highestvalue, means shareholders have contributed a less portion of thefunds to the business than last three years.


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Analysis cont.

Debt-to-equity ratio

0.81

0.75

0.79

0.76

0.72

0.74

0.76

0.78

0.8

0.82

Ratio

2009 2008 2007 2006

Years

Debt-to-equity ratio

2009

2008

2007

2006

The ratio of four years shows that, in 2009 the debt-to-equity ratiobecome very high. Therefore company had grater reliance oncreditors that last three years.


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Findings

The company uses a combination of manual and computerized financial

information system to record, collect, analyze and report financial

information.

Financial performance is good and intended to achieve more. As a result,

performance of the company increases and with it companys brand image

also get brighten.

A higher ratio result than industry standards usually indicate an efficient

use of assets.

Though managers and executive officers know a great deal about the

financial concepts used, many of the supervisory employees do not

understand their importance. This sometimes results, not to paying

enough attention to the details creating misunderstanding.


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Findings cont.

A high turnover rate is an indication of good inventory management as the

appropriate amount of inventory is being purchased to meet demand. High

turnovers are also a good indicator that the business is less.

Most of the orders come from foreign country.

In general all assets run twice in a year but this company in competitive

market ratio is not satisfactory.

Where I have done my internship they facing worker conflict and also they

facing less order from buyer.

Garments sector is contributing a major portion to our economic growth.

But in this sector today they are facing lots of problem.


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Suggestions

Not only managers and officials, but the supervisors and senior workers

should have an idea about importance of the financial reporting. So, some

sort of basic training financial on should be arranged for them.

To discourage workers from deliberately not collecting their dues in time, a

minor charge should be cut from their dues after a fixed numbers of days.

This will psychologically motivate workers to gather their wages in time

and relieve the pressure on the pay-roll accounting because company

should not face liquidity problem.

There must be a clear allocation of responsibilities authority andaccountability.


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Suggestions cont.

The company should take the initiative to develop an effective research

and development center to get innovative ideas to capture the competitive

market.

The company has the provision of internship program but there is no

organized structure for the internship program. The company can properly

utilize the internees at minimum cost.

The company should go for advertising about their company and the up

coming brand. So that the customer knows what types of products and

designs they are providing.


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Conclusion

At last it can be said that Alex Ltd. has built its organizational

accounting procedures around standard accounting principles. This

results into the better financial performance of the company. The

management needs to have accurate financial information.Accounting procedures based standard accounting principles

ensure that the management gets it on time.


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END OF THE

PRESENTATION

the implementation of accounting principles in the financial practices .ppt

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