Plastic Manufacturing Company

The project involved the preparation of complete financial statements, tax reporting, financial analysis, and advisory services for a plastic manufacturing and sales company. The main goal was to provide a clear picture of the company’s financial health, profitability, and cash flow management to aid strategic decision-making.

• Assets:
  • Current Assets: Cash, accounts receivable, raw materials inventory, finished goods inventory.
  • Non-Current Assets: Machinery, equipment, and factory building.
• Liabilities:
  • Current Liabilities: Accounts payable, short-term loans, accrued expenses.
  • Non-Current Liabilities: Long-term bank loans and deferred tax liabilities.
• Equity:
  • Share capital, retained earnings, and reserves.

Purpose: Provided management with a clear snapshot of financial position at a given date, highlighting the company’s net worth, liquidity, and capital structure.

• Revenue: Sales from plastic products, broken down by product type (e.g., packaging materials, moulded products).
• Cost of Goods Sold (COGS): Raw materials, production labour, machine maintenance, and factory overhead.
• Gross Profit: Revenue minus COGS.
• Operating Expenses: Administrative expenses, salaries, marketing, utilities, depreciation.
• Net Profit: Profit before and after tax.

Purpose: Assessed the operational profitability and identified areas where costs could be optimized.

• Operating Activities: Cash inflows from sales, outflows for raw materials, salaries, and operational expenses.
• Investing Activities: Purchase of machinery and equipment, sale of old assets.
• Financing Activities: Loan repayments, dividend payments, capital injections.

Purpose: Provided insights into cash liquidity, ensuring the company could meet operational and investment requirements without cash shortages.

• Tracked changes in share capital, retained earnings, and reserves during the reporting period.
• Adjustments due to net profit/loss, dividends paid, and additional capital introduced.

Purpose: Offered transparency into ownership changes and retained profits, helping stakeholders understand equity growth.

• Calculated corporate income tax based on net profit.
• Ensured compliance with local tax regulations, including VAT/GST (if applicable) and payroll taxes.
• Prepared tax filings and submitted required reports to tax authorities.

Purpose: Ensured regulatory compliance, minimized penalties, and optimized tax liabilities.

• Cost Analysis: Evaluated production costs to identify inefficiencies in raw material usage and labour allocation.
• Profitability Analysis: Analysed margins per product line to identify high-performing products.
• Cash Flow Advisory: Recommended strategies to improve cash flow, such as better receivable collection and inventory turnover.
• Budgeting & Forecasting: Provided projections for next year’s revenue, expenses, and cash requirements to support strategic planning.

Key Recommendations:

• Reduce raw material waste through process optimization.
• Reevaluate pricing strategy for low-margin products.
• Implement a more robust inventory management system to reduce holding costs.
• Schedule debt repayments to align with peak cash inflows.

 

• Improved visibility into financial performance and operational costs.
• Streamlined cash flow, ensuring liquidity for production and growth activities.
• Provided actionable insights to enhance profitability and strategic decision-making.
• Ensured full tax compliance, reducing risk of penalties.

• Accounting Software: QuickBooks / Xero (or Excel for demonstration).
• Financial Reporting Templates: Customized for manufacturing operations.
• Analytical Methods: Ratio analysis, cost-benefit analysis, cash flow projections.