Download miễn phí Working capital and some solutions to increasing capital in utilization at Petrolimex Asphalt commercial limited company
Open book in details to check frequently Accounts receivable to recover it in dated time.
- Having sollutions to avoid risky payment (chosing good customers, limited credit, ask for paying a deposit, pay in advance a part of contract`s value, selling Accounts debts to recover capital for the company)
- Having a right selling goods on credit for its policy to customers. When the company do this, it should check ability of payment by contracts in details. Because, It would ensure to benefit from these activities, similar to benefit from bank`s interest overdue.
- Classification of overdue debts and looking for their reasons ( objective or subjective ) then to have suitable methods to deal with them : agreement on overdue debts, citing money for overdue debts, absolve customers from payment of a part debt or asked economic court to address by current laws.
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terprises will needn`t to invest too much in Accounts receivable.
2.2.The primary factors have influences on the utilization effects of working capital
* Objective factors
+ Fluctuations of economy : If economy with its inflation causes the rising of goods prices, including input material costs, produce costs will grow, product prices will be raised and of course to make the consumption will become ineffciently.
+ The non-stop development of Science and Technology also contribute to increasing effecient utilization of working capital. Science and technology are developing that it can be helpful factors or can be adverse factors to enterprise. if enterprise produces redundant products and they can not be consumed. Therefore this will be negative factors.
+ Business environment : The number of rising competitors, alternative products, changed market demand … They will impact on the ability of consumption, even though leading to the situation of capital losing.
+ The State with marcro policies : The state`s policies are very important to enterprises` operations. In each policy has 2 effects, may be positive and may be not positive to Business activities in their fieds.
* Subjective factors
+ We can recognize enterprises` weak points in quality of management. It causes the redundant or shortage of capital.
+ Ability of penertration and enlargement the market of enterprise : the speed of consumptionis better, the Working capital is higher, therefore its efficient in utilization will grow.
2.3. some solutions aiming to increase the utilization effects of working capital
2.3.1. Secification of the level necessary working capital demand for business operation
Specification of necessary Working capital regularly, this will ensure the level enough capital to meet the demand of Business process amd avoid unliquided capital or short of capital, leading to interrupted production situation.
Business activities have to ask for capital to come into operation. When starting to produce and do business, enterprise has to calculate the level of necessary capital demand and one of the most important is that enterprise has to calculate accurately in line with developing period in general and in produce process in particular. Because of this will Giúp enterprise`s business operation go on smoothy and efficiently.
2.3.2. To push up the working capital` s rotate speed highly
The effects of Working capital are evaluated by its rotate speed. If Working capital has a highly rotated speed, it shows that the effect of working capital utilization is very good. So, it is necessary to hasten speed of liquided Working capital in 3 processes : reserve , produce and circulation.
2.3.3. Carry out of checking, analysing, surpervising Business activities tightly and regulary.
Executing of check activities regularly and consecutively will Giúp enterprises to evaluate their strong points and weak points. Steming from there, enterprises can develop their advantages or prevent and modify shortcomings in time.
Chapter 2
OVERVIEW OF PRODUCE ACTIVITIES IN PETROLIMEX ASPHALT LIMITED COMPANY
1. Introduction
1.1. Some information about the company
Enterprise name : Petrolimex Asphalt commercial limited company
Short name : Petrolimex Asphalt co.,LTD
Headquarters : At 1 Kham Thien _Dong Da district _ Ha Noi
Petrolimex asphalt commercial limited company, to be a subsidiary of Petrolimex Petrochemical - a member of Viet Nam Petrolimex, head of company. The company specialises in business with products related to asphalt in domestic market and regional South East Asia countries.
In order to meet the increasing demand of petrolimex asphalt products in the domestic market. The ministry of Trading officially approved the company became as a member of Petrolimex Petrochemical joint stock company and under the name of Petrolimex Asphalt commercial limited company. The company deloyed “under the model of parents _subsidiary company ”.
PLC is one of the most dynamic members of Petrolimex Petrochemical and approved by the ministry of Trading.
Presently, the company is representative partner of BPETCO to supply high quality products of BP on market. It has been the first doing business with 60/70 hot solid asphalt products in Viet Nam since 1997
1.2. Business sectors and main products
Do business sectors
Do business with import and export petrolimex Asphalt products, in the short term, concluded 3 main sectors : lubricant , chemical, asphalt fields and some sectors related to them.
- Doing business with import and export material products, Asphalt equipments.
- Doing business with services related to : Shipping, stocks, mixtrure, alnalysis, consultancy and technical services.
- In the coming time, the company will take part in doing business with buildings and real estate.
Main products : Asphalt, chemical, lubricant.
1.3. Organization of management
Management` structure : Including, chairman, director, duty director .
- Chairman: cotrol Business activities as well as making regulations, priciples and the organization model and and have the authority to appoint director of Petrolimex Asphalt limited company.
- Director : Director is a person who is resposible for Business operations to chairman and directly running Business activities and has to report them to chairman.
- Duty director : Duty is a person who is intitled to Giúp director and along with director to run Business operations and to take the regulations and priciples of mother company given into practice. Duty director is also responsiblity to director and chairman for given responsibility.
1.4. Accounting`s structure
Accounting department : responsible to financial accounting activities to director. Always updating and giving accurated figures in time. The department has to give balance sheet, financial report … calculate expensives such as : profits, make loss, taxes, salary, bonus, other policies for staffs.
At the being time, Accounting department has 9 people concluded : 1 chief accountant, 2 deputy chief accountants and 6 accountants (accountant take resposible for the whole company, accountant for departments, accountant for details). They are all up to the standard of graduated University.
2. The real state of working cappital`s utilization at Petrolimex Asphalt commercial limited company
2.1. Over view of assets and capital resources of the company
Look at the table 1, capital and business capital resources of the company was higher than last year because of extending lager scale of produce and business .
Within 2 years of 2006 and 2007 working capital of the company accouted for a high ratio in the number of assets. Namely, in 2006 it was 93.2% and 94.1% in 2007 among of all assets value which made the company` fixed capital had only small density in structure of assets. For example, in 2006 it occupied 6.8% and reduced 5.9% in 2007. This structure is entirely reasonable in line with enterprises doing business in trading.
As for capital resourse, the company tended to use loans. In 2006 the Accounts payable of 43.8% density and decreased slightly 42.1% density in 2007. Although reduced, it was still high in the total of the company`s capital. Owner`s equity accounts for a small density in capital resource structure of the company such as 12.4% and 15.7% in 2007.
Business capital is an value expression of assets. It included : Working capital, it is a form of its value and short term investment accounts; Fixed capital is an expression of its value and long term investment. Looking at business capital structure, showed that the business capital increased with high speed, the company was expanding for a larger scale to control the market, namely : In 2006, business capital 954.698.725 thousand dongs. Its value growed 199.592.549 thousand dongs and present at 1.154.291.274 thousand dongs. It increased relatively of high speed, equivalent of 20.1%.
To get the good results of growing business capital above, the company used flexibly its financial resources included Owner`s equity and Accounts payable. In 2006, Accounts payable were 743.176.105 thousand dongs, holding 43.8% in the total capital. Owner`s equity was 211.522.620 thousand dongs, equivalent of 12.4 % in the total capital. In 2007, the scale of capital was increased both of Accounts payable and working capital : Accounts payable raised 96.970.509 thousand dongs, equivalent of 13.04% ratio. Meawhile, Its owner`s equity speed of 48.51%, equal to 102.622.041 thousand dongs. This showed that, the rising rate of Owner`s equity was higher than Accounts payable in 2007, leading to ratio of capital resource changed, Owner`s equity increased by 48.51 % and Accounts payable reduced to 42.1%. Although, the density of loans reduced but accounted for a large propotion of total capital. The structrure of the capital required to execute activities of management and use it efficiently.
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2.2.The primary factors have influences on the utilization effects of working capital
* Objective factors
+ Fluctuations of economy : If economy with its inflation causes the rising of goods prices, including input material costs, produce costs will grow, product prices will be raised and of course to make the consumption will become ineffciently.
+ The non-stop development of Science and Technology also contribute to increasing effecient utilization of working capital. Science and technology are developing that it can be helpful factors or can be adverse factors to enterprise. if enterprise produces redundant products and they can not be consumed. Therefore this will be negative factors.
+ Business environment : The number of rising competitors, alternative products, changed market demand … They will impact on the ability of consumption, even though leading to the situation of capital losing.
+ The State with marcro policies : The state`s policies are very important to enterprises` operations. In each policy has 2 effects, may be positive and may be not positive to Business activities in their fieds.
* Subjective factors
+ We can recognize enterprises` weak points in quality of management. It causes the redundant or shortage of capital.
+ Ability of penertration and enlargement the market of enterprise : the speed of consumptionis better, the Working capital is higher, therefore its efficient in utilization will grow.
2.3. some solutions aiming to increase the utilization effects of working capital
2.3.1. Secification of the level necessary working capital demand for business operation
Specification of necessary Working capital regularly, this will ensure the level enough capital to meet the demand of Business process amd avoid unliquided capital or short of capital, leading to interrupted production situation.
Business activities have to ask for capital to come into operation. When starting to produce and do business, enterprise has to calculate the level of necessary capital demand and one of the most important is that enterprise has to calculate accurately in line with developing period in general and in produce process in particular. Because of this will Giúp enterprise`s business operation go on smoothy and efficiently.
2.3.2. To push up the working capital` s rotate speed highly
The effects of Working capital are evaluated by its rotate speed. If Working capital has a highly rotated speed, it shows that the effect of working capital utilization is very good. So, it is necessary to hasten speed of liquided Working capital in 3 processes : reserve , produce and circulation.
2.3.3. Carry out of checking, analysing, surpervising Business activities tightly and regulary.
Executing of check activities regularly and consecutively will Giúp enterprises to evaluate their strong points and weak points. Steming from there, enterprises can develop their advantages or prevent and modify shortcomings in time.
Chapter 2
OVERVIEW OF PRODUCE ACTIVITIES IN PETROLIMEX ASPHALT LIMITED COMPANY
1. Introduction
1.1. Some information about the company
Enterprise name : Petrolimex Asphalt commercial limited company
Short name : Petrolimex Asphalt co.,LTD
Headquarters : At 1 Kham Thien _Dong Da district _ Ha Noi
Petrolimex asphalt commercial limited company, to be a subsidiary of Petrolimex Petrochemical - a member of Viet Nam Petrolimex, head of company. The company specialises in business with products related to asphalt in domestic market and regional South East Asia countries.
In order to meet the increasing demand of petrolimex asphalt products in the domestic market. The ministry of Trading officially approved the company became as a member of Petrolimex Petrochemical joint stock company and under the name of Petrolimex Asphalt commercial limited company. The company deloyed “under the model of parents _subsidiary company ”.
PLC is one of the most dynamic members of Petrolimex Petrochemical and approved by the ministry of Trading.
Presently, the company is representative partner of BPETCO to supply high quality products of BP on market. It has been the first doing business with 60/70 hot solid asphalt products in Viet Nam since 1997
1.2. Business sectors and main products
Do business sectors
Do business with import and export petrolimex Asphalt products, in the short term, concluded 3 main sectors : lubricant , chemical, asphalt fields and some sectors related to them.
- Doing business with import and export material products, Asphalt equipments.
- Doing business with services related to : Shipping, stocks, mixtrure, alnalysis, consultancy and technical services.
- In the coming time, the company will take part in doing business with buildings and real estate.
Main products : Asphalt, chemical, lubricant.
1.3. Organization of management
Management` structure : Including, chairman, director, duty director .
- Chairman: cotrol Business activities as well as making regulations, priciples and the organization model and and have the authority to appoint director of Petrolimex Asphalt limited company.
- Director : Director is a person who is resposible for Business operations to chairman and directly running Business activities and has to report them to chairman.
- Duty director : Duty is a person who is intitled to Giúp director and along with director to run Business operations and to take the regulations and priciples of mother company given into practice. Duty director is also responsiblity to director and chairman for given responsibility.
1.4. Accounting`s structure
Accounting department : responsible to financial accounting activities to director. Always updating and giving accurated figures in time. The department has to give balance sheet, financial report … calculate expensives such as : profits, make loss, taxes, salary, bonus, other policies for staffs.
At the being time, Accounting department has 9 people concluded : 1 chief accountant, 2 deputy chief accountants and 6 accountants (accountant take resposible for the whole company, accountant for departments, accountant for details). They are all up to the standard of graduated University.
2. The real state of working cappital`s utilization at Petrolimex Asphalt commercial limited company
2.1. Over view of assets and capital resources of the company
Look at the table 1, capital and business capital resources of the company was higher than last year because of extending lager scale of produce and business .
Within 2 years of 2006 and 2007 working capital of the company accouted for a high ratio in the number of assets. Namely, in 2006 it was 93.2% and 94.1% in 2007 among of all assets value which made the company` fixed capital had only small density in structure of assets. For example, in 2006 it occupied 6.8% and reduced 5.9% in 2007. This structure is entirely reasonable in line with enterprises doing business in trading.
As for capital resourse, the company tended to use loans. In 2006 the Accounts payable of 43.8% density and decreased slightly 42.1% density in 2007. Although reduced, it was still high in the total of the company`s capital. Owner`s equity accounts for a small density in capital resource structure of the company such as 12.4% and 15.7% in 2007.
Business capital is an value expression of assets. It included : Working capital, it is a form of its value and short term investment accounts; Fixed capital is an expression of its value and long term investment. Looking at business capital structure, showed that the business capital increased with high speed, the company was expanding for a larger scale to control the market, namely : In 2006, business capital 954.698.725 thousand dongs. Its value growed 199.592.549 thousand dongs and present at 1.154.291.274 thousand dongs. It increased relatively of high speed, equivalent of 20.1%.
To get the good results of growing business capital above, the company used flexibly its financial resources included Owner`s equity and Accounts payable. In 2006, Accounts payable were 743.176.105 thousand dongs, holding 43.8% in the total capital. Owner`s equity was 211.522.620 thousand dongs, equivalent of 12.4 % in the total capital. In 2007, the scale of capital was increased both of Accounts payable and working capital : Accounts payable raised 96.970.509 thousand dongs, equivalent of 13.04% ratio. Meawhile, Its owner`s equity speed of 48.51%, equal to 102.622.041 thousand dongs. This showed that, the rising rate of Owner`s equity was higher than Accounts payable in 2007, leading to ratio of capital resource changed, Owner`s equity increased by 48.51 % and Accounts payable reduced to 42.1%. Although, the density of loans reduced but accounted for a large propotion of total capital. The structrure of the capital required to execute activities of management and use it efficiently.
Beca...