Founded by Gustav Schweitzer init had been in the Schweitzer family for 12 generations. Whereas the members of the board had extensive production know-how, they had little knowledge about marketing and financial management of the company.
What are the characteristics of Fund flow statement and its uses? What do the financial forecast and sources and uses of funds statement of company tell us? Discuss about breakeven analysis.
What does the breakeven chart of the company tell us? Profit and loss account lists out all the expenses made by the firm and revenue earned over a period of time. Balance sheet depicts the financial position of the firm at a particular point of time. While fund flow statement is complimentary to both balance sheet and profit and loss account, it brings a clear idea about the movement of funds in and out of the firm, during a particular period of time.
But it is possible that there is enough profit in the business and the financial position is also good and still there may be deficiency of cash or of working capital in business.
We will write a custom essay sample on Deutsche Brauerei Order now More Essay Examples on If the management wants to find out as to where the cash is being utilized, financial statement cannot Deutsche braueri. Therefore, a statement is prepared of the sources and applications of funds from where Working Capital Deutsche braueri and it is utilized.
This is called Fund Flow statement. Every transaction has double entry. Various cases can be that transaction involves Change on current assets and on fixed assets cash purchase of fixed assets o Cash being current item and fixed assets are non current?
Change on current assets and on current assets credit sale of inventory o Debtors is a current item and inventory is also current in nature? Change on current assets and change on current liabilities payment made to creditors o Cash is current asset and creditor, current liability? Change on current liabilities and change on current liabilities short term loan taken to clear overdraft?
Change on fixed assets and on fixed liabilities sale of investments to redeem debentures So, amongst all these combinations, transactions which involve change, on one hand on current item and on other hand on non current item, they would only lead to fund flow.
Thus fund flow statement enumerates various sources from which funds come in organization and various applications which lead to usage of funds. It is an important tool to check the efficiency of management in the firm. It can make future projections about working capital requirements and thus firm can arrange for those requirements and can allocate funds in a more efficient manner.
Preparation of fund flow statement involves preparation of adjusted profit and loss account which is prepared by excluding the non fund and non operating items from the initial figure of net profit.
To help to understand the changes in assets and asset sources which are not readily evident in the income statement or financial statement.
To inform as to how the cans to the business have been used. To point out the financial strengths and weaknesses of the business How to Prepare a Fund Flow Statement Fund flow statements are prepared by taking the balance sheets for two dates representing the coverage period.
The increases and decreases must then be calculated for each item. Finally, the changes are classified under four categories: It is also important to zero out the non-fund based adjustments in order to capture only the changes that are accompanies by flow of funds.
However, income accrued but received and expenses incurred but not received reckoned in the profit and loss statement should not be excluded from the profit figure for the fund flow statement.
Fund flow statements can be used to identify a variety of problems in the way a company operates. For example, companies that are using short-term money to finance long-term investments may run into liquidity problems in the future.
Meanwhile, a company that is using long-term money to finance short-term investments may not be efficiently utilizing its capital. Steps in Preparation of Fund Flow Statement: Importance of funds flow statement: Funds flow statement is an important analytical tool for external as well as internal uses of financial statements.Deutsche Brauerei Case Company background Founded in by Gustav Schweitzer Produced two varieties of beer, dark and light.
Located in a village just outside Munich, Germany. Deutsche Brauerei was founded in and has been in the Schweitzer family for 12 generations. The company produces quality beer and has won awards over the years and is owned entirely by 16 uncles, aunts and cousins.
In , Deutsche Brauerei expanded into Ukraine. deutsche brauerei In early January , Greta Schweitzer arrived at Deutsche Brauerei to participate in her first meeting of the board of directors. She had recently joined the board at the behest of her uncle, the managing director of the company.
Deutsche Braueri I. Introductory Paragraph Deutsche Brauerei has been a family owned and operated corporation for 12 generations, which has created a high level of focus and control. Each generation has kept the management and operations processes relatively simple, centered on brewing practices and quality.
Deutsche Brauerei Vishal Upadhyay Fin – Seminar: Corporate Financial Policy 02/24/ Statement of the main problem: Deutsche Brauerei was founded in and is entirely owned by 16 uncle, aunts and cousins of Schweitzer family. It is well known for its high quality beer.
Deutsche Brauerei was a family owned business, located in Munich, Germany that produced 2 award winning varieties of beer; dark and light. Founded by Gustav Schweitzer in , it had been in the Schweitzer family for 12 generations.