Business Finance of Cipher Clothing - Essay Example

Business Finance Introduction Cipher clothing is UK based company that focuses its synergies in the production of various types of quality clothes. The company has made significant strides in the textile and clothing industry despite the stiff competition that characterizes the sector. Its exemplary performance is attributable to the effective marketing strategies, financial mobilization, planning, budgeting, and quality management. The performance is also attributable to its ide market share and strong asset base. Notably, the company was formed with the mission to be the leading producer and seller of clothes in UK and globally. It seeks to achieve this aim through production of quality items, timely response to customer needs and investment on future projects. Henry Williams founded the company in the year 1859 as a small wardrobe clothing company. Despite its small start, the company has expanded its network and business units to various market destinations globally including US. The expansion is resulting to high amount of revenue and asset development. The level of performance can be ascertained from its strong revenue base and asset capacity as contained in its financial statements. For instance, the company recorded a gross profit of 440 million in the year 2014 up from the amount realized in the year 2011 that stood at 690. Likewise, the company reported an encouraging net profit and sales of 75900 and 834 in the year ending 2014 respectively. Its net asset worth was also reported at 485300 in the year 2014 up from 319000 in the year 2011. The growth in the company’s capital base and revenues including assets depicts a good start for the company that operates in the competitive industry. Although the firm is reporting positive figures in its balance sheet, the performance, there is need for the company to improve its balance sheet figures to facilitate its competitiveness in the market. To achieve this there are various financial developments or action plans that the company can adopt. The action plans are essential since they hold the capacity of revolutionizing the revenue entry points through diversification and expand income capacity (Salhanick, Kipnis & Wiele, 1995, p. 67). The probable action plans include adopting product diversification, seeking for strategic partnership, injecting more capital to increase productivity and reaching out to a wider market spectrum. All these action plans forms viable tools that the clothe making company can embrace to ensure that its balance sheet is boosted to higher levels. The action plans if adopted will enable the company to double its income capacity, advance its output levels, and increase sales. This will enhance the company’s balance sheet value appropriately. The recommended action plan that the company can adopt is diversification. The strategy is suitable for the company because of its suitability in facilitating the realization of quality or high returns. By employing the action plan, the company is able to expand its product base, market base and increase the number of items manufactured. This is achievable given that the strategy entails finding or embracing new ways of service delivery and production. It also entails expansion of the product base to widen the scope of customers, widening of the products scope, market base and capacity is vital in fostering quality service delivery and maintenance of road safety (Marcella & Guillossou, 2012, p. 79). The strategy has been instrumental in advancing the asset base and income level of most companies as they receive cash from diverse business units. For example, Cipher clothing plc would benefit if it expand its fleet of products to include water cans and sports gears in addition to everybody clothing, sportswear, and undergarments. The projection of such a move will enable the company to advance its performance to high of 21% in its balance sheet. Such a figure is necessary to boost development of the company and to make it vibrant. Investigative approach in compiling data and carrying-out the task There are numerous ways that companies can adopt in ensuring effective compilation and analysis of financial data to facilitate investment decisions. The approaches give credible solutions and methodologies that are essential in promoting validity in the process. They incentives they hold give credence to the realization of absolute results that necessary for competitiveness. Indeed, they foster analysis of financial ratios, performance indices, and financial statements. Investigative approach of data compilation and carrying out of various tasks entails systematic analysis processes. The processes enables individuals to identify the type data to compile, the process of data compilation, the key tasks to be carried out and how to perform the tasks. In a financial institution, the analytical data compilation method and task analysis help institutions to understand the financial strength of the company, the expenditure areas, financial statements and interpretation of financial data. The analytical tool gives accountants and financial staff viable incentives for compiling financial data from the point of receipt to the expenditure point. This ensures that finance or monetary resources are effectively monitored and controlled through systematic safeguards. In any company that seeks to record exemplary performance and satisfy the needs of stakeholders, data compilation is vital and analysis of key tasks areas is vital in promoting accountability. The compilation enables accountants and others stakeholders including investors and financiers to make valid decisions on whether to invest in the company or not. AS noted, by Marcella & Guillossou (2012), not every agency has the capacity and intelligence with dedicated capacity to execute comprehensive compilation and financial data analysis. Due to this, most institutions rely on the investigative analytic approach to perform data compiling and task analysis. They prefer the analysis tool given that it encourages investigators to work methodologically and thoughtfully in achieving successful analysis of figures including investigations. This can be done in eight step process that include employment of a strategic targeting, use of effective investigative plans, expansion of the use of critical thinking and use of the data analysis techniques. All the highlighted techniques play acritical role in analyzing and compiling data of certain magnitude. They also apply differently to various institutions based on certain parameters that include size and operation base. For this study, the use of data analysis techniques and strategic targeting method are adopted. Their adoption is based on their appropriateness in fostering analysis, compilation, and execution of financial tasks. They hold the capacity of enabling accountants and financial advisers to compile, interpret, and evaluate financial data with the aim of finding amicable basis for investment decision-making (Fabbri, 2002, p. 45). In particular, strategic targeting based on a clear criterion that enables institutions to focus on strong areas of income generation. It ensures that a company employs its efforts in cases and financial aspects with great impact on diverse areas. Therefore, the strategy will enable Cipher clothing company to focus on viable projects that can help it enhance the strength of the balance sheet. It will give the company the opportunity the settle on income generating activity with great impact for sustainable growth and development. The strategy is embraced in most settings as it allows the involvement of various stakeholders in the decision making process that creates a sense of belonging necessary for posterity. Data analysis tools that are complex analytical products are also fundamental in the process of data analysis and compilation. The analysis tool is preferred for the execution of complex analytical data such as those relating to financial statements due to their proprietary software set-ups. The technique helps individuals to understand complex situations through viewing of graphics that are generated using quality materials. These techniques will enable Cipher clothing company to generate clear data that are easily understood by the stakeholders. The idea is imperative since data presented in financial statements are at times complex to understand. The information enables the management to establish and understand clearly the performance level of the institution and the trend. They will also be able to establish the projected amount that can enable the financial statement of the company especially the balance sheet to remain afloat. Financial metrics The financial metrics derived from the financial data in the appendices were generated with the support of the investigative approaches adopted. The approaches facilitated effective computation, compiling, and presentation of the financial data in the respective financial statements. The approaches also ensure effective understanding of the data contained in the documents attached to them. From the figures presented in the financial statements as computed, it is clear that Cipher clothing company has been performing well (Suzuki, 1992). The company’s exemplary performance is evident in its prepared books of account. As presented in the income statement of the company. The computed sales value or turnover rate stood at 834million in the year 2014/15 against 690 billion. The company’s gross profit stood at 440 and 362 respectively. This has an increase of over 78million that is enough to build building partly. It shows that the company has a good tradition of cash a management and that money will not be a hindrance factor in the management of a company and financing of the expansion including asset growth. That is it fosters general growth of a company and sharing of ideas. On the aspect of net worth, the entity reported a net worth of 485300million capital strength up from 319000million. This shows how the company is strong in terms of asset value. Bibliography Fabbri, A. G. (2002). Deposit and geoenvironmental models for resource exploitation and environmental security: [proceedings of the NATO Advanced Study Institute (ASI) on Deposit and Geoenvironmental Deposit Models for Resource Exploitation and Environmental Security, Mátraháza, Hungary, 6 - 19 September 1998]. Dordrecht [u.a.], Kluwer Acad. Publ. Marcella, A. J., & Guillossou, F. (2012). Cyber forensics: from data to digital evidence. Suzuki, N. (1992). Shared memory multiprocessing. Cambridge, Mass, MIT Press. Salhanick, H. A., Kipnis, D. M., & Wiele, R. L. V. (1995). Metabolic Effects of Gonadal Hormones and Contraceptive Steroids. Boston, MA, Springer US. Read More