2015年ACCA考试《F9财务管理》辅导资料(1)

2015年ACCA考试《F9财务管理》辅导资料(6)

2015年ACCA考试《F9财务管理》辅导资料（6）本文由高顿ACCA整理发布，转载请注明出处The equivalent annual cost (EAC) approachThis approach computes the present value of costs for each project over a cycle and then expresses the present value in an annual equivalent cost using the appropriate annuity factors for each cycle. The annual equivalent of NPVs of the two or more projects can then be compared. Having calculated the EAC for each cycle and each project，then compare the EACs. The project that has the lowest EAC over the cycles is the better one if lowest outlay is the objective or the higher EAC would be preferred if the highest revenue were the objective.Infinite re-investment approachThis approach is appropriate when projects of unequal lives and unequal risks are being considered. The first step to take will be to establish the net present value of the projects in the normal way and then calculate the net present value of projects to infinity using the formula：NPV ? = NPV of project/PV of annuity for the life of project at discount rateDiscount rate for the projectThe project，which has the highest NPV to infinity，is the one to recommendProject appraisal under inflationInflation is a state of affairs under which prices are constantly rising. When this happens the purchasing power of money depreciates. The currency will buy fewer goods and services than previously and consequently the real returns on investments will fall. Investors understandably，will expect to be compensated for the fall in the value of money during inflation. When appraising investment opportunities the appraiser requires an understanding of three discount rates. These are Money Rates，Real Rates and Inflation Rates. Money rate (also known as Nominal rate) is a combination of the real rate and inflation rate and should be used to discount money cash flows. If on the other hand youwere given real cash flows these must be discounted using the real discount rates. In order to be able to use either of these two rates，you need to know how to calculate both of them. They can be calculated from the following formula，devised by Fisher1 + m =(1 + r) x (1 + i)Where：m = money rater = real ratei = inflation rateFrom the above formula it is possible to calculate m，r and i if you were given information about two of the three variables. For example if you were told that the money rate was 20% and real rate was 12% the inflation rate will be calculated as follows：i =1 + m ? 11 + ri =1 + 0.20? 11 + 0.12i =1.0714?= 7.14%Equally m and r could be calculated as follows.m =(1.12 x 1.0714) ? 1(1.19999) ? 120%r =1.20? 11.071412%When the appropriate discount rate has been established the present value factors of this rate at different time periods can be obtained from the present value table or the present value factors calculated using the following formula：11111(1+r)(1+r)2(1+r)3(1+r)4(1+r)5?etcWhere r = discount rate.Present value tables are only available for whole numbers，so if your r is not a whole number you will have to use the formula to calculate the required present value factors. Let us calculate for example the present value factors of 7.14% for years 1 to 5.11111(1.0714)(1.0714) 2(1.0714) 3(1.0714) 4(1.0714)5?etc0.9330.8710.8130.7590.708Having either obtained or calculated the present value factors for the relevant discount rates，these are then used to discount the future cash flows to give the net present values of the projects. It is important to understand when to use which rate. If the question gives you money cash flows，then use the money rate; if the question gives real cash flow it follows then that the real rate must be used. To confuse one with the other would give the wrong answer.更多ACCA资讯请关注高顿ACCA官网：。

2015年ACCA考试《F9财务管理》辅导资料(10)

2015年ACCA考试《F9财务管理》辅导资料（10）本文由高顿ACCA整理发布，转载请注明出处Risk management? How to implement Turnbull's proposals and achieve sound internal by Andy Wynne01 Nov 2000The Turnbull report (issued in September 1999 and available from ) located internal control clearly within the framework of risk management. It also recognised that：profits are，in part，the reward for successful risk-taking in business，the purpose of internal control is to help manage and control risk appropriately rather than to eliminate it.Risk management is a developing area and there are an increasing numbers of books，papers，periodicals and consultants willing to provide their spin on the topic. The aim of this article is to provide a general introduction to the topic and a framework which it is hoped can be used to understand more clearly the detailed guidance available from other sources. It should also be of assistance to students studying for the new syllabus，especially the proposed Paper 2.6 on Audit and Internal Review.All managers have to make decisions in the face of uncertainty. Risk is the possibility that they will experience adverse consequences from these decisions，or not successfully exploit the opportunities that become available. The objective of risk management is to enable managers to take risks knowingly，reduce risks where appropriate and strive to prepare for a future that cannot be predicted with absolute certainty.更多ACCA资讯请关注高顿ACCA官网：。

2015年ACCA考试《F9财务管理》辅导资料(13)

2015年ACCA考试《F9财务管理》辅导资料（13）本文由高顿ACCA整理发布，转载请注明出处by John Richard Edwards01 Oct 2000The merits of cash based financial reporting ? for example，it is based principally on facts rather than problematic accounting measurements ? have been known for many years. However，it was not until 1990 (revised 1996) that the Accounting Standards Board made the publication of Cash Flow Statements (FRS 1) a standard requirement for UK companies. FRS 1 tells us that the ?cash flow statement in conjunction with a profit and loss account and balance sheet provides information on financial position and performance as well as liquidity，solvency and financial adaptability?. Wise words，but what do they mean?The usefulness of financial statements is enhanced by an examination of the relationship between them; also by comparisons with previous time periods，other entities and expected performance. Value can be further added through the calculation and interpretation of accounting ratios. An examination of accounting textbooks and the pages of accounting periodicals reveals an enthusiasm for rehearsing the potential of ?accounting ratios? demonstrated through calculations of the net profit margin，return on capital employed，current ratio and a host of other ?traditional? measures based on the contents of the profit and loss and balance sheet. But what about the cash flow statement? We have seen that its publication was required by the ASB in order to improve the informative value of published financial information. Indeed，some say it is the most important financial statement. One based on ?hard facts? which has helped prevent financial machinations such as those that are believed to have occurred at companies such as Polly Peck in the 1980s.The lack of attention to cash flow-based ratios in accounting textbooks is particularly surprising given their acknowledged role in credit rating assessments and in the prediction of corporate failure.In these and other contexts，the traditional ratios suffer from the same defect as the financial statements (the profit and loss account and balance sheet) on which they are based. Such ratios are the result of comparing figures which have been computed using accounting conventions and ?guestimations?. Given the difficulty of deciding the length of the period over which a fixed asset should be written off，whether the tests whichjustify the capitalisation of development expenditure have been satisfied，the amount of the provision to be made for claims under a manufacturer?s twelve month guarantee (to give just a few examples)，ratios based on such figures are also bound to have limited economic significance. This is not to suggest that the traditional ratios are irrelevant. Clearly this is not so，as they reveal important relationships and trends that are not apparent from the examination of individual figures appearing in the accounts. However，given the fact that cash flow ratios contain at least one element that is factual (the numerator，the denominator or both)，their lack of prominence in the existing literature is puzzling.Some recognition of cash flow ratiosThe importance of cash flow ratios was dramatically demonstrated，early on，by W.H. Beaver whose 1966 study showed that the most effective predictor of corporate failure was the ratio of cash flow to total debt. Indeed，one of his most surprising findings was that the current ratio proved to be one of the least useful ratios in predicting impending collapse. The importance of cash as an indicator of continuing financial health should not be surprising in view of its crucial role within the business. Colourfully described as a company?s ?life-blood?，a strong cash flow will enable a business to recover from temporary financial problems whereas future negative cash flow will cause even an apparently sound enterprise to move towards liquidation. Expressing the importance of cash differently：a company which descends into a loss-making position often succeeds in making a comeback; one which runs out of cash is unlikely to have a second chance.Another US-based writer，Yuji Ijiri，has noted the paradox between the way in which investment decisions are made by business and other entities and the way in which the results of those decisions are evaluated. The principal focus for informed investment decisions is cash flows，whether the capital project appraisal method is ?payback? or one of the more sophisticated discounted cash flow-based techniques，namely ?net present value? and ?internal rate of return?. Turning to performance evaluation，however，the emphasis usually shifts to techniques such as return on investment.The inconsistency between the two approaches is highlighted by the use of depreciation cost allocation for computing ROI; a calculation which has no place whatsoever in the above project appraisal methods. Ijiri persuasively argues，therefore，the importance of making project appraisal and performance evaluation consistent· ratios which link the cash flow statement with the two other principal financial statements;· ratios and percentages based entirely on the contents of the cash flow statement.To illustrate the calculations，the results of Tamari plc for 1998 and 1999 appear in Figure 1. For each ratio is presented both the calculation and a discussion of its significance. Inevitably，there will be some overlap in the messages conveyed by the various ratios presented. This may be due to similarities in the nature of the calculations or to the fact that the results of just one company are used for illustration purposes. The application of the same ratios to different financial facts might well yield additional valuable insights.Ratios which link the cash flow statement with the two other principal financial statementsCash flow from operations to current liabilitiesCash flow from operations to current liabilities= Net cash flow from operating activities x 100Average current liabilitiesWhere：Net cash flow from operating activities is taken directly from the cash flow statement published to comply with FRS 1. Average current liabilities are computed from the opening and closing balance sheet.This ratio examines the liquidity of the company by providing a measure of the extent to which current liabilities are covered by cash flowing into the business from normal operating activities. The ratio is thought to possess some advantage over balancesheet-based ratios such as the liquidity ratio as a measure of short-term solvency. This is because balance sheet ratios are based on a static positional statement (the ?instantaneous financial photograph?) and are therefore subject to manipulation by，for example，running down stock immediately prior to the year end and not replacing it until the next accounting period. Balance sheet based ratios may alternatively be affected by unusual events which cause particular items to be abnormally large or small. In either case，the resulting ratios will not reflect normal conditions.Cash recovery rateCash recovery rate (CRR)=Cash flow from operations x 100Average gross assetsWhere：Cash flow from operations is made up of ?net cash flow from operating activities? together with any proceeds from the disposal of long-term assets. Gross assets is the average gross value of the entity?s assets.Assets are required to generate a return which is ultimately，if not immediately，in the form of cash. The CRR is，therefore，a measure of the rate at which the company recovers its investment in fixed assets. The quicker the recovery period，the lower the risk. You may have noticed that the CRR is thus the reciprocal of the pay back period used for capital project appraisal purposes assuming projects have equal (or roughly equal) annual cash flows.Cash flow per shareCash flow per share =Cash flowWeighted average no. of sharesRatios which link the cash flow statement with the two other principal financial statementsCash flow from operations to current liabilitiesCash flow from operations to current liabilities= Net cash flow from operating activities x 100Average current liabilitiesWhere：Net cash flow from operating activities is taken directly from the cash flow statement published to comply with FRS 1. Average current liabilities are computed from the opening and closing balance sheet.This ratio examines the liquidity of the company by providing a measure of the extent to which current liabilities are covered by cash flowing into the business from normal operating activities. The ratio is thought to possess some advantage over balancesheet-based ratios such as the liquidity ratio as a measure of short-term solvency. This is because balance sheet ratios are based on a static positional statement (the ?instantaneous financial photograph?) and are therefore subject to manipulation by，for example，running down stock immediately prior to the year end and not replacing it until the next accounting period. Balance sheet based ratios may alternatively be affected by unusual events which cause particular items to be abnormally large or small. In either case，the resulting ratios will not reflect normal conditions.Cash recovery rateCash recovery rate (CRR)=Cash flow from operations x 100Average gross assetsWhere：Cash flow from operations is made up of ?net cash flow from operating activities? together with any proceeds from the disposal of long-term assets. Gross assets is the average gross value of the entity?s assets.Assets are required to generate a return which is ultimately，if not immediately，in the form of cash. The CRR is，therefore，a measure of the rate at which the company recovers its investment in fixed assets. The quicker the recovery period，the lower the risk. You may have noticed that the CRR is thus the reciprocal of the pay back period used for capital project appraisal purposes assuming projects have equal (or roughly equal) annual cash flows.Cash flow per shareCash flow per share =Cash flowWeighted average no. of shares更多ACCA资讯请关注高顿ACCA官网：。

2015年ACCA考试《F9财务管理》辅导资料(13)

2015年ACCA考试《F9财务管理》辅导资料（13）本文由高顿ACCA整理发布，转载请注明出处by John Richard Edwards01 Oct 2000The merits of cash based financial reporting ? for example，it is based principally on facts rather than problematic accounting measurements ? have been known for many years. However，it was not until 1990 (revised 1996) that the Accounting Standards Board made the publication of Cash Flow Statements (FRS 1) a standard requirement for UK companies. FRS 1 tells us that the ?cash flow statement in conjunction with a profit and loss account and balance sheet provides information on financial position and performance as well as liquidity，solvency and financial adaptability?. Wise words，but what do they mean?The usefulness of financial statements is enhanced by an examination of the relationship between them; also by comparisons with previous time periods，other entities and expected performance. Value can be further added through the calculation and interpretation of accounting ratios. An examination of accounting textbooks and the pages of accounting periodicals reveals an enthusiasm for rehearsing the potential of ?accounting ratios? demonstrated through calculations of the net profit margin，return on capital employed，current ratio and a host of other ?traditional? measures based on the contents of the profit and loss and balance sheet. But what about the cash flow statement? We have seen that its publication was required by the ASB in order to improve the informative value of published financial information. Indeed，some say it is the most important financial statement. One based on ?hard facts? which has helped prevent financial machinations such as those that are believed to have occurred at companies such as Polly Peck in the 1980s.The lack of attention to cash flow-based ratios in accounting textbooks is particularly surprising given their acknowledged role in credit rating assessments and in the prediction of corporate failure.In these and other contexts，the traditional ratios suffer from the same defect as the financial statements (the profit and loss account and balance sheet) on which they are based. Such ratios are the result of comparing figures which have been computed using accounting conventions and ?guestimations?. Given the difficulty of deciding the length of the period over which a fixed asset should be written off，whether the tests whichjustify the capitalisation of development expenditure have been satisfied，the amount of the provision to be made for claims under a manufacturer?s twelve month guarantee (to give just a few examples)，ratios based on such figures are also bound to have limited economic significance. This is not to suggest that the traditional ratios are irrelevant. Clearly this is not so，as they reveal important relationships and trends that are not apparent from the examination of individual figures appearing in the accounts. However，given the fact that cash flow ratios contain at least one element that is factual (the numerator，the denominator or both)，their lack of prominence in the existing literature is puzzling.Some recognition of cash flow ratiosThe importance of cash flow ratios was dramatically demonstrated，early on，by W.H. Beaver whose 1966 study showed that the most effective predictor of corporate failure was the ratio of cash flow to total debt. Indeed，one of his most surprising findings was that the current ratio proved to be one of the least useful ratios in predicting impending collapse. The importance of cash as an indicator of continuing financial health should not be surprising in view of its crucial role within the business. Colourfully described as a company?s ?life-blood?，a strong cash flow will enable a business to recover from temporary financial problems whereas future negative cash flow will cause even an apparently sound enterprise to move towards liquidation. Expressing the importance of cash differently：a company which descends into a loss-making position often succeeds in making a comeback; one which runs out of cash is unlikely to have a second chance.Another US-based writer，Yuji Ijiri，has noted the paradox between the way in which investment decisions are made by business and other entities and the way in which the results of those decisions are evaluated. The principal focus for informed investment decisions is cash flows，whether the capital project appraisal method is ?payback? or one of the more sophisticated discounted cash flow-based techniques，namely ?net present value? and ?internal rate of return?. Turning to performance evaluation，however，the emphasis usually shifts to techniques such as return on investment.The inconsistency between the two approaches is highlighted by the use of depreciation cost allocation for computing ROI; a calculation which has no place whatsoever in the above project appraisal methods. Ijiri persuasively argues，therefore，the importance of making project appraisal and performance evaluation consistent· ratios which link the cash flow statement with the two other principal financial statements;· ratios and percentages based entirely on the contents of the cash flow statement.To illustrate the calculations，the results of Tamari plc for 1998 and 1999 appear in Figure 1. For each ratio is presented both the calculation and a discussion of its significance. Inevitably，there will be some overlap in the messages conveyed by the various ratios presented. This may be due to similarities in the nature of the calculations or to the fact that the results of just one company are used for illustration purposes. The application of the same ratios to different financial facts might well yield additional valuable insights.Ratios which link the cash flow statement with the two other principal financial statementsCash flow from operations to current liabilitiesCash flow from operations to current liabilities= Net cash flow from operating activities x 100Average current liabilitiesWhere：Net cash flow from operating activities is taken directly from the cash flow statement published to comply with FRS 1. Average current liabilities are computed from the opening and closing balance sheet.This ratio examines the liquidity of the company by providing a measure of the extent to which current liabilities are covered by cash flowing into the business from normal operating activities. The ratio is thought to possess some advantage over balancesheet-based ratios such as the liquidity ratio as a measure of short-term solvency. This is because balance sheet ratios are based on a static positional statement (the ?instantaneous financial photograph?) and are therefore subject to manipulation by，for example，running down stock immediately prior to the year end and not replacing it until the next accounting period. Balance sheet based ratios may alternatively be affected by unusual events which cause particular items to be abnormally large or small. In either case，the resulting ratios will not reflect normal conditions.Cash recovery rateCash recovery rate (CRR)=Cash flow from operations x 100Average gross assetsWhere：Cash flow from operations is made up of ?net cash flow from operating activities? together with any proceeds from the disposal of long-term assets. Gross assets is the average gross value of the entity?s assets.Assets are required to generate a return which is ultimately，if not immediately，in the form of cash. The CRR is，therefore，a measure of the rate at which the company recovers its investment in fixed assets. The quicker the recovery period，the lower the risk. You may have noticed that the CRR is thus the reciprocal of the pay back period used for capital project appraisal purposes assuming projects have equal (or roughly equal) annual cash flows.Cash flow per shareCash flow per share =Cash flowWeighted average no. of sharesRatios which link the cash flow statement with the two other principal financial statementsCash flow from operations to current liabilitiesCash flow from operations to current liabilities= Net cash flow from operating activities x 100Average current liabilitiesWhere：Net cash flow from operating activities is taken directly from the cash flow statement published to comply with FRS 1. Average current liabilities are computed from the opening and closing balance sheet.This ratio examines the liquidity of the company by providing a measure of the extent to which current liabilities are covered by cash flowing into the business from normal operating activities. The ratio is thought to possess some advantage over balancesheet-based ratios such as the liquidity ratio as a measure of short-term solvency. This is because balance sheet ratios are based on a static positional statement (the ?instantaneous financial photograph?) and are therefore subject to manipulation by，for example，running down stock immediately prior to the year end and not replacing it until the next accounting period. Balance sheet based ratios may alternatively be affected by unusual events which cause particular items to be abnormally large or small. In either case，the resulting ratios will not reflect normal conditions.Cash recovery rateCash recovery rate (CRR)=Cash flow from operations x 100Average gross assetsWhere：Cash flow from operations is made up of ?net cash flow from operating activities? together with any proceeds from the disposal of long-term assets. Gross assets is the average gross value of the entity?s assets.Assets are required to generate a return which is ultimately，if not immediately，in the form of cash. The CRR is，therefore，a measure of the rate at which the company recovers its investment in fixed assets. The quicker the recovery period，the lower the risk. You may have noticed that the CRR is thus the reciprocal of the pay back period used for capital project appraisal purposes assuming projects have equal (or roughly equal) annual cash flows.Cash flow per shareCash flow per share =Cash flowWeighted average no. of shares更多ACCA资讯请关注高顿ACCA官网：。

2015年ACCA考试《F9财务管理》辅导资料(7)

2015年ACCA考试《F9财务管理》辅导资料（7）本文由高顿ACCA整理发布，转载请注明出处Effects of taxation on project appraisalInvestment in capital assets has taxation implications，which should be included in the analysis.To ignore the effect of taxation could affect the quality of the decision，which is consequently made about an investment opportunity. If the resulting project from the appraisal is profitable then taxation becomes payable on these profits thus reducing the net cash inflows by the amounts of tax payable. Capital allowances are given by the Inland Revenue at about 25% on a reducing balance basis over the life of the project. Capital allowances reduce the amount of tax which becomes payable. If the project has a terminal value at the end of its useful life，it will be necessary to establish whether this gives rise to a balancing allowance or a balancing charge. Net cash inflows are used in pay back，net present value and Internal rate of return methods. If the entity will not be in atax-paying position during the entire life of the project then it is known as tax exhausted and tax can be ignored but this situation is most unlikely to occur.Now that we have looked at these possible areas of complication let us look at a fictitious company we shall call Samco Plc.CaseSamco Plc is a manufacturer of electric drills. The company has just developed two new models of electric drills. Model 1 is called Automatic and model 2 is called Super. Senior managers have resolved that if production were to commence in making the automatic model，200，000 drills per annum will be produced and sold over the next five years at a price of ?200 per drill，whereas if production were to commence with the super model，150，000 drills per annum will be sold over the next seven years at a price of ?140 per drill. Budgeted operating costs of each of the two models at today?s prices are as stated below：Automatic model?Direct material70Direct Labour20Variable overheadFixed production overheadSelling，Distribution etc20Net Cash inflow per unit =(?200 ? ?140)= ?60Super model?Direct material20Direct labour12Variable overhead15Fixed production overheadSelling，distribution，etc.Net Cash inflow per unit =(?140 ? 70)= ?70Net present value to infinityAutomatic modelNPV = NPV of the project/PV of annuity of appropriate years and rate Discount Rate= 17，130，000/3.7360.155= ?29，581，405Super model= 18，920，000/3.6050.20= 26，241，332Having calculated the net present values of the two projects to infinity clearly one can see that the automatic model has a net present value of about ?29.5m whereas super has a lower net present value of about ?26.2m. This means that the automatic model will give a higher return to the shareholders of Samco plc. This is the model the Board should manufacture and sell to their customers，because shareholders? wealth will be maximised by taking this course of action.ConclusionThe main objective of this second article in the area of project appraisal was to demonstrate to readers that cases might not necessarily be straightforward. Aspects such as inflation，taxation and unequal life spans must be understood in order that candidates can competently answer questions requiring an understanding of these further aspects. The scenario in Samco plc should be carefully followed ensuring that you understand how the author has used the available information to answer the question.更多ACCA资讯请关注高顿ACCA官网：。

2015年ACCA考试《F9财务管理》辅导资料(4)

2015年ACCA考试《F9财务管理》辅导资料（4）本文由高顿ACCA整理发布，转载请注明出处BackgroundThere is no unequivocal definition of what is meant by an SME. McLaney (2000) identifies three characteristics:1. firms are likely to be unquoted;2. ownership of the business is restricted to few individuals, typically a family group; and3. they are not micro businesses that are normally regarded as those very small businesses that act as a medium for self-employment of the owners. However, this too is an important sub-group.The characteristics of SME's can change as the business develops. Thus, for growing businesses a floatation on a market like AIM is a possibility in order to secure appropriate financing. In fact, venture capital support is usually preconditioned on such an assumption.The SME sector is important in terms of contribution to the economy and this is likely to be a characteristic of SME's across the world. According to the Bank of England (1998), SME's accounted for 45% of UK employment and 40% of sales turnover of all UK firms. This situation is similar across the EU.Future developments mean that the importance of the SME sector will continue, if not develop. The growth in small, new technology businesses servicing particular market segments and the shift from manufacturing to service industries, at least in Western economies, means that economies of scale are no longer as important as they once were and, hence, the necessity for scale in operations is no longer an imperative. We know, also, that innovation flourishes in the smaller organisation and that this will be an important characteristic of the business in the future.The cost of capital is 12% and AICO depreciates all its fixed assets on the straight-line basis. By cost of capital is meant what it costs to raise the required finance for the project.更多ACCA资讯请关注高顿ACCA官网：。

2015年ACCA考试《F9财务管理》辅导资料(8)

2015年ACCA考试《F9财务管理》辅导资料（8）本文由高顿ACCA整理发布，转载请注明出处by John Richard Edwards01 Oct 2000The merits of cash based financial reporting ? for example，it is based principally on facts rather than problematic accounting measurements ? have been known for many years. However，it was not until 1990 (revised 1996) that the Accounting Standards Board made the publication of Cash Flow Statements (FRS 1) a standard requirement for UK companies. FRS 1 tells us that the ?cash flow statement in conjunction with a profit and loss account and balance sheet provides information on financial position and performance as well as liquidity，solvency and financial adaptability?. Wise words，but what do they mean?The usefulness of financial statements is enhanced by an examination of the relationship between them; also by comparisons with previous time periods，other entities and expected performance. Value can be further added through the calculation and interpretation of accounting ratios. An examination of accounting textbooks and the pages of accounting periodicals reveals an enthusiasm for rehearsing the potential of ?accounting ratios? demonstrated through calculations of the net profit margin，return on capital employed，current ratio and a host of other ?traditional? measures based on the contents of the profit and loss and balance sheet. But what about the cash flow statement? We have seen that its publication was required by the ASB in order to improve the informative value of published financial information. Indeed，some say it is the most important financial statement. One based on ?hard facts? which has helped prevent financial machinations such as those that are believed to have occurred at companies such as Polly Peck in the 1980s.The lack of attention to cash flow-based ratios in accounting textbooks is particularly surprising given their acknowledged role in credit rating assessments and in the prediction of corporate failure.In these and other contexts，the traditional ratios suffer from the same defect as the financial statements (the profit and loss account and balance sheet) on which they are based. Such ratios are the result of comparing figures which have been computed using accounting conventions and ?guestimations?. Given the difficulty of deciding the length of the period over which a fixed asset should be written off，whether the tests whichjustify the capitalisation of development expenditure have been satisfied，the amount of the provision to be made for claims under a manufacturer?s twelve month guarantee (to give just a few examples)，ratios based on such figures are also bound to have limited economic significance. This is not to suggest that the traditional ratios are irrelevant. Clearly this is not so，as they reveal important relationships and trends that are not apparent from the examination of individual figures appearing in the accounts. However，given the fact that cash flow ratios contain at least one element that is factual (the numerator，the denominator or both)，their lack of prominence in the existing literature is puzzling.Some recognition of cash flow ratiosThe importance of cash flow ratios was dramatically demonstrated，early on，by W.H. Beaver whose 1966 study showed that the most effective predictor of corporate failure was the ratio of cash flow to total debt. Indeed，one of his most surprising findings was that the current ratio proved to be one of the least useful ratios in predicting impending collapse. The importance of cash as an indicator of continuing financial health should not be surprising in view of its crucial role within the business. Colourfully described as a company?s ?life-blood?，a strong cash flow will enable a business to recover from temporary financial problems whereas future negative cash flow will cause even an apparently sound enterprise to move towards liquidation. Expressing the importance of cash differently：a company which descends into a loss-making position often succeeds in making a comeback; one which runs out of cash is unlikely to have a second chance.Another US-based writer，Yuji Ijiri，has noted the paradox between the way in which investment decisions are made by business and other entities and the way in which the results of those decisions are evaluated. The principal focus for informed investment decisions is cash flows，whether the capital project appraisal method is ?payback? or one of the more sophisticated discounted cash flow-based techniques，namely ?net present value? and ?internal rate of return?. Turning to performance evaluation，however，the emphasis usually shifts to techniques such as return on investment.The inconsistency between the two approaches is highlighted by the use of depreciation cost allocation for computing ROI; a calculation which has no place whatsoever in the above project appraisal methods. Ijiri persuasively argues，therefore，the importance of making project appraisal and performance evaluation consistent· ratios which link the cash flow statement with the two other principal financial statements;· ratios and percentages based entirely on the contents of the cash flow statement.To illustrate the calculations，the results of Tamari plc for 1998 and 1999 appear in Figure 1. For each ratio is presented both the calculation and a discussion of its significance. Inevitably，there will be some overlap in the messages conveyed by the various ratios presented. This may be due to similarities in the nature of the calculations or to the fact that the results of just one company are used for illustration purposes. The application of the same ratios to different financial facts might well yield additional valuable insights.Ratios which link the cash flow statement with the two other principal financial statementsCash flow from operations to current liabilitiesCash flow from operations to current liabilities= Net cash flow from operating activities x 100Average current liabilitiesWhere：Net cash flow from operating activities is taken directly from the cash flow statement published to comply with FRS 1. Average current liabilities are computed from the opening and closing balance sheet.This ratio examines the liquidity of the company by providing a measure of the extent to which current liabilities are covered by cash flowing into the business from normal operating activities. The ratio is thought to possess some advantage over balancesheet-based ratios such as the liquidity ratio as a measure of short-term solvency. This is because balance sheet ratios are based on a static positional statement (the ?instantaneous financial photograph?) and are therefore subject to manipulation by，for example，running down stock immediately prior to the year end and not replacing it until the next accounting period. Balance sheet based ratios may alternatively be affected by unusual events which cause particular items to be abnormally large or small. In either case，the resulting ratios will not reflect normal conditions.Cash recovery rateCash recovery rate (CRR)=Cash flow from operations x 100Average gross assetsWhere：Cash flow from operations is made up of ?net cash flow from operating activities? together with any proceeds from the disposal of long-term assets. Gross assets is the average gross value of the entity?s assets.Assets are required to generate a return which is ultimately，if not immediately，in the form of cash. The CRR is，therefore，a measure of the rate at which the company recovers its investment in fixed assets. The quicker the recovery period，the lower the risk. You may have noticed that the CRR is thus the reciprocal of the pay back period used for capital project appraisal purposes assuming projects have equal (or roughly equal) annual cash flows.Cash flow per shareCash flow per share =Cash flowWeighted average no. of sharesRatios which link the cash flow statement with the two other principal financial statementsCash flow from operations to current liabilitiesCash flow from operations to current liabilities= Net cash flow from operating activities x 100Average current liabilitiesWhere：Net cash flow from operating activities is taken directly from the cash flow statement published to comply with FRS 1. Average current liabilities are computed from the opening and closing balance sheet.This ratio examines the liquidity of the company by providing a measure of the extent to which current liabilities are covered by cash flowing into the business from normal operating activities. The ratio is thought to possess some advantage over balancesheet-based ratios such as the liquidity ratio as a measure of short-term solvency. This is because balance sheet ratios are based on a static positional statement (the ?instantaneous financial photograph?) and are therefore subject to manipulation by，for example，running down stock immediately prior to the year end and not replacing it until the next accounting period. Balance sheet based ratios may alternatively be affected by unusual events which cause particular items to be abnormally large or small. In either case，the resulting ratios will not reflect normal conditions.Cash recovery rateCash recovery rate (CRR)=Cash flow from operations x 100Average gross assetsWhere：Cash flow from operations is made up of ?net cash flow from operating activities? together with any proceeds from the disposal of long-term assets. Gross assets is the average gross value of the entity?s assets.Assets are required to generate a return which is ultimately，if not immediately，in the form of cash. The CRR is，therefore，a measure of the rate at which the company recovers its investment in fixed assets. The quicker the recovery period，the lower the risk. You may have noticed that the CRR is thus the reciprocal of the pay back period used for capital project appraisal purposes assuming projects have equal (or roughly equal) annual cash flows.Cash flow per shareCash flow per share =Cash flowWeighted average no. of shares更多ACCA资讯请关注高顿ACCA官网：。

2015年ACCA考试《F9财务管理》辅导资料(15)

2015年ACCA考试《F9财务管理》辅导资料（15）本文由高顿ACCA整理发布，转载请注明出处ConclusionThe purpose of the cash flow statement is to improve the informative value of published financial reports. The lack of prominence given to cash flow-based accounting ratios as a means of improving the interpretative value of this data is particularly surprising given the enormous amount of space usually devoted to traditional accounting ratios in text books on financial accounting，management accounting and corporate finance. This article has demonstrated the contribution of three types of percentages and ratios：ratios to link the cash flow statement with key related items appearing in the balance sheet; the expression of each item in the cash flow statement as a percentage of net cash flow from operating activities; and the calculation of ratios to explore the inter-relationship between items within the cash flow statement.As usual，it should be noted that different ratios are expressed in different ways，as percentages，as multiples，or in pence，as well as in the classic form.The interpretative value of individual ratios will depend upon the nature of the financial developments at a particular business. Given the content of Figure 1，for example，the cash flow per share (version I) ratio was not seen to possess any interpretative value and was not calculated. It is also the case that the messages conveyed by certain ratios may be similar for a particular company covering a particular year，but in a different time and place the same ratios may yield different insights.Finally，one must remember the importance of not attaching too much weight to any single ratio but to use a representative range of ratios (including cash flow ratios!) to build up a meaningful business profile.Debtor managementby Malcolm Anderson01 May 2000One year after The Late Payment of Commercial Debts (Interest) Act 1998 was passed，market information specialists，Experian，recently reported that British companies are now taking two days longer to settle their bills with suppliers than before the legislation was introduced. The average time taken to pay for credit purchases by British companies is now 74 days. Although the 1998 legislation enables companies employing fewer than 50 staff to levy an 8% interest charge above the base rate on late-paying larger clients，few have done so in fear of alienating the enterprises on whom they frequently so heavily rely. The study also found that most large businesses now insist on a 60-day payment period. Reliant upon cash from trade debtors to pay suppliers，wages and other costs，the failure to receive the amounts owing from credit customers on the due dates creates enormous problems for businesses in paying their own way. This article reviews the major considerations at each stage of the credit management process and concludes with an illustration of how factoring can benefit companies suffering from late-paying customersAssessing the credit worthiness of customersBefore extending credit to a customer，a supplier should analyse the five Cs of credit worthiness，which will provoke a series of questions. These are：· Capacity will the customer be able to pay the amount agreed within the allowable credit period? What is their past payment record? How large is the customer's busiCapital ? what is the financial health of the customer? Is it a liquid and profitable concern，able to make payments on time?· Character do the customers? management appear to be committed to prompt payment? Are they of high integrity? What are their personalities like?· Collateral what is the scope for including appropriate security in return for extending credit to the customer?· Conditions what are the prevailing economic conditions? How are these likely to impact on the customer?s ability to pay promptly?Whilst the materiality of the amount will dictate the degree of analysis involved，the major sources of information available to companies in assessing customers? credit worthiness are：· Bank references. These may be provided by the customer?s bank to indicate their financial standing. However，the law and practice of banking secrecy determines the way in which banks respond to credit enquiries，which can render such references uninformative，particularly when the customer is encountering financial difficulties.· Trade references. Companies already trading with the customer may be willing to provide a reference for the customer. This can be extremely useful，providing that the companies approached are a representative sample of all the clients? suppliers. Such references can be misleading，as they are usually based on direct credit experience and contain no knowledge of the underlying financial strength of the customer.· Financial accounts. The most recent accounts of the customer can be obtained either direct from the business，or for limited companies，from Companies House. While subject to certain limitations (encountered in paper 1)，past accounts can be useful in vetting customers. Where the credit risk appears high or where substantial levels of credit are required，the supplier may ask to see evidence of the ability to pay on time. This demands access to internal future budget data.· Personal contact. Through visiting the premises and interviewing senior management，staff should gain an impression of the efficiency and financial resources of customers and the integrity of its management.· Credit agencies. Obtaining information from a range of sources such as financial accounts，bank and newspaper reports，court judgements，payment records with other suppliers，in return for a fee，credit agencies can prove a mine of information. They will provide a credit rating for different companies. The use of such agencies has grown dramatically in recent years.· Past experience. For existing customers，the supplier will have access to their past payment record. However，credit managers should be aware that many failing companies preserve solid payment records with key suppliers in order to maintain supplies，but they only do so at the expense of other creditors. Indeed，many companies go into liquidation with flawless payment records with key suppliers.· General sources of information. Credit managers should scout trade journals，business magazines and the columns of the business press to keep abreast of the key factors influencing customers' businesses and their sector generally. Sales staff who have their ears to the ground can also prove an invaluable source of information.更多ACCA资讯请关注高顿ACCA官网：。