Business report of Zee company Essay Example | Topics and Well Written Essays - 1250 words

Business report of ezed company - Essay ExampleZee Co. should also critically analyze the provisions of the obtain as stipulated by the English Dairy company. For instance, in the analysis report given to the Zee Company, it is clearly stated that the purchase of the company could be financed by two options sales and lease back (1.4 million pounds head office) or by the bank loan that the merchant bank consented to provide upon agreement with the Zee company. The bank proceeded by giving their terms and conditions regarding the loan as 4% of the total purchase price and an additional 4,000 pounds for the arrangement fee. These information is suppose to serving Zee company to brainstorm and come up with a sound decision which is financially a plausible in their attempt to make the purchase. fountainhead 2 a The accounting ratios that were given by the English Dairy Company could be misleading because the ratios were calculated on the assumptions that favored the financial persua sion of the English Dairy Company. ... The financial ratios given by the English Dairy Company could also be misleading in that the aspects of stockpile of the finished reliables were not stated and if was stated then were quoted as sales. This gave a very impressive picture of the companys performance which was fictitious. The key fundamentals involved in the calculations were hidden and this resonated by impressing Zee Company who by the time of purchase believed the report of the English Dairy Company as a honest financial position of the business. In regard of all these, Zee company was vulnerable for deception on grounds that not all the material facts were given to hypothesise and inform the buyer company to make choices that were sound. Question 2 b The published companys accounts be entirely dependant on the good will of the company responsibility to report honest financial position of the business. Just because businesses clearly knows that it is the financial reports th at are used to gauge the performance of the companies, they are always bound to fix figures regarding the business in order to create the feeling that the business is performing favorably. In most cases this may not be the case more so if the business is currently shopping for investors, loan or in the process of floating their shares. The financial reports of the businesses are normally change by reversal to suit the agenda that is moved by the company as at the time the report is required. In some other stretch, the financial reports of the companies are altered in the elaborate plan to evade tax payments. The need to relay the actual business position with regard to its finances has become an issue as business have been under legal obligation to