Chic Paints Plan
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- Date Submitted: 10/06/2014 03:22 AM
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Introduction to business (Section 4)
Which accounting function will you be reviewing?
Accounts Receivable/Credit Control
Overview of the business (PC 1.3)
How big is the business – staff, offices, turnover?
Chic Paints Ltd manufactures and supplies specialist paint products such as those used on boats, cars and industrial machines. It operates business to business.
The company was formerly part of Ashstead Plc, but was the subject of a management buyout (MBO) from its previous owners in 2008 by five of its directors, whom had managed the company for many years. Prior to the MBO the Ashstead Plc operated a conglomerate manufacturing a wide range of products but this was considered to be no longer viable and as a result Chic Paints Ltd was sold off. Following the MBO the company moved away from the household paints market and towards the niche market of specialised paints as there is less competition and profit margins are higher.
The shareholding of the company is as follows:
Managing Director 25% shareholding
Finance Director 25% shareholding
Sales Director 20% shareholding
Production Director 15% shareholding
HRM Director 15% shareholding
The Sales and Production directors have indicated that they would like to sell their shares and retire. In July 2 possible replacements were found who are thought to have the necessary skills.
Chic Paints Ltd turnover is currently £120 million having steadily reduced from £200 million over the 6 years but profit margins are around 30% having risen in the same timeframe from 12%. Net assets are over £25 million and the company employs 350 staff.
Who are the businesses major stakeholders (internal and external) and why?
Stakeholders of the business would include internal and external parties who have an interest in the business.
The major stakeholders of Chic Paints Ltd would include the following:
• Shareholders - Would be interested in the business making profits so they receive...
Which accounting function will you be reviewing?
Accounts Receivable/Credit Control
Overview of the business (PC 1.3)
How big is the business – staff, offices, turnover?
Chic Paints Ltd manufactures and supplies specialist paint products such as those used on boats, cars and industrial machines. It operates business to business.
The company was formerly part of Ashstead Plc, but was the subject of a management buyout (MBO) from its previous owners in 2008 by five of its directors, whom had managed the company for many years. Prior to the MBO the Ashstead Plc operated a conglomerate manufacturing a wide range of products but this was considered to be no longer viable and as a result Chic Paints Ltd was sold off. Following the MBO the company moved away from the household paints market and towards the niche market of specialised paints as there is less competition and profit margins are higher.
The shareholding of the company is as follows:
Managing Director 25% shareholding
Finance Director 25% shareholding
Sales Director 20% shareholding
Production Director 15% shareholding
HRM Director 15% shareholding
The Sales and Production directors have indicated that they would like to sell their shares and retire. In July 2 possible replacements were found who are thought to have the necessary skills.
Chic Paints Ltd turnover is currently £120 million having steadily reduced from £200 million over the 6 years but profit margins are around 30% having risen in the same timeframe from 12%. Net assets are over £25 million and the company employs 350 staff.
Who are the businesses major stakeholders (internal and external) and why?
Stakeholders of the business would include internal and external parties who have an interest in the business.
The major stakeholders of Chic Paints Ltd would include the following:
• Shareholders - Would be interested in the business making profits so they receive...