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

Business report of izzard accompany - Essay ExampleZee Co. should similarly critically analyze the provisions of the purchase as stipulated by the side Dairy company. For instance, in the synopsis report given to the Zee follow, it is clearly stated that the purchase of the company could be financed by cardinal 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 testifyation is suppose to help Zee company to brainstorm and come up with a sound decision which is fiscally a arguable in their attempt to make the purchase. Question 2 a The accounting ratios that were given by the English Dairy Company could be mislead because the ratios were calculated on the assumptions that favored the financial pos ition 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 goods were not stated and if was stated then were quoted as sales. This gave a truly impressive picture of the companys performance which was fictitious. The key fundamentals involved in the calculations were undercover 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 reflect and inform the buyer company to make choices that were sound. Question 2 b The published companys accounts are 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 unendingly 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 shop for investors, loan or in the process of floating their shares. The financial reports of the businesses are normally corrected to typeface the agenda that is moved by the company as at the time the report is required. In rough other stretch, the financial reports of the companies are altered in the elaborate plan to evade tax payments. The pick up to relay the actual business position with regard to its finances has become an issue as business have been under legal obligation to