Examination Into Financial Practices Of Canamax Limited Finance Essay

United Nations Conference on Trade and Development ( UNCTAD ) in its papers, Small Business A Way Out Of Poverty ( 2008 ) , notes that little concerns are highly of import for developing economic systems. In industrialised markets, UNCTAD farther notes that little concerns make up 95 % of entire concerns. However, it is besides good known that little concerns face many challenges chiefly in the country of capital and fiscal operations.

The twin island Republic Trinidad and Tobago is made up of a diverse, multiethnic population of about 1.5 million people and is one of the most advanced economic systems of the CARICOM part with a GDP of US $ 20.9 billion ( 2008 )[ 1 ]. As declared

by the International Monetary Fund ( IMF ) , Trinidad and Tobago is better placed than many states to endure the international fiscal crisis but is non immune from contagious disease.[ 2 ]

Small and medium size endeavors ( SME ‘s ) are a important portion of the concern landscape of Trinidad and Tobago and do over 90 % of all concerns and are considered by the authorities of Trinidad and Tobago to be the engine that drives economic growing. SME ‘s are normally household owned and managed concerns which are created from little sums of invested capital. Staff is little in figure and production capablenesss are comparatively low. This sector chiefly operates on the footing of trust instead than systems and proper accounting direction, criterions and record maintaining.

However, SME ‘s fail to capitalise on support chances due to miss of collateral and deficiency of cognition of finance system.

In an attempt to advance little concern the Trinidad and Tobago authorities has established establishments such as National Entrepreneurship Development Company ( NEDCO ) and Agricultural Development Bank ( ADB ) to supply the relevant aid ( both fiscal and general concern direction ) to SME ‘s which are necessary to guarantee growing and sustainability of this of import entrepreneurial base of the state.

NEDCO identifies SME ‘s as concern with less than 50 employees and assets and gross revenues valued at TTD5 million and TTD10 Million severally.

Despite the above little concern are at hazard as enterprisers continue to see fiscal jobs head among them are entree to finance and hard currency flow jobs.

The campaigner has chosen Canamax Limited, a Trinidad and Tobago cocoa distributer, as the beginning of survey because this company provides an chance to analyze some of the challenges faced by little concerns within the industry.

Background

Canamax is a little distribution house with a little market portion in the cocoa industry and faces hard currency flow challenges which limit the company ‘s growing and enlargement.

Canamax Limited, a Trinidad and Tobago cocoa distributer was chosen because this company provides the chance to analyze the operating schemes of the concern and at the same clip analyze the challenges faced by little concerns of this type with purpose of geting at solutions to these jobs. To be specific, the scrutiny will include fiscal policy, liquidness policy, hard currency flow challenges and fiscal analysis as compared to outdo patterns in fiscal direction.

Industry Information

The cocoa industry in Trinidad and Tobago and by extension in the Caricom part is dominated by Charles Candy merchandises. The import section/competition comprises Cadbury and Hershey. This trade name, Simsek, originates from Turkey and was introduced to the local market through Canamax Limited in Chaguanas.

At present, Canamax controls about 1 % of the market portion of confectionery and is expected to implement new selling schemes in an attempt to increase its market portion in the short term.

Although Canamax continues to remain afloat its capacity is sometimes limited due to its inability to obtain hard currency on a timely footing. The distributorship concern is normally conducted on a recognition footing normally 30 yearss. This procedure allows the retail merchants to have the goods, show and sell same, roll up the hard currency and so pay the distributer. Any default in payment on the portion of the retail merchants consequences in a hard currency flow job for the distributer.

Company Legal and Business History

Canamax is a Private Ltd Company which was incorporated in 2002 by Hazife and Hillary Ali who are the proprietors of the company. It ‘s registered office is located at # 67 Line Head Road, Chase Village, Chaguanas.

The company holds the exclusive distribution rights toA importA confectionery fromA Simsek in Turkey to administer throughout the Caribbean part. Its client baseA comprises over 150 clients chiefly supermarkets and little retail stores.A

Management Team

Bing a little company, Canamax Limited direction squad consists of The Managing Director, Mr. Rick Yip Hoi, two supervisors and the comptroller who manage a little staff of 10 ( 10 ) individuals.

Mission Statement

The company mission statement states its intent is “ To make superior value for its clients, employees and investors through prompt and efficient bringing of gross revenues and services and to keep its place as the exclusive distributer of Simsek merchandises in the Caribbean. ”

Vision Statement

The vision statement of CANAMAX LTD. states that its vision is “ To be the taking supplier of confectionary merchandises in the Caribbean part and create wealth for stakeholders while lending to the economic development both locally and regionally. ”

Gross saless Forecast

In the short term ( within one twelvemonth ) the company plans to sell TT $ A 3,000,000.00 locally and regionally and for the long-run end ( three to five old ages ) , the figure is projected to be TT $ A 4,500,000.00 yearly.

Scope

This thesis survey is concerned with the usage of hard currency flow adequateness and CANAMAX processs with a position to urging solutions to the challenges identified.

The survey will concentrate on the fiscal policies and patterns of Canamax Ltd. and will analyze and analyze its fiscal statements over the last two fiscal periods. The historical Financial Documents to be examined include:

Cash flow statements

Income ( Profit and Loss ) statements:

Month-end for every complete month for the last 12 months

Year-to-date for the current twelvemonth

Year-end for the last 2 complete old ages

Balance Sheets

Year-end for the last 2 complete old ages

Year-to-date for current twelvemonth

Cash flow statements ( CFS ) form an built-in portion of fiscal statements contained in the fiscal accounting criterions by GAAP ( General Accepted Accounting Practices )

creates a strong correlativity to the income statement and balance sheet points.

Cash flow statements can be utilized to measure the solvency, liquidness, fiscal adaptability and viability of a company. Furthermore, Everingham etal ( 2003 ) opine that hard currency flow ratios serve as public presentation indexs. The sufficiency ratio determines the ability of a house to cover its debts and facilitate reinvest enterprise from generated hard currency gross.

Balance sheets comprise of inactive informations which can merely be measured at a given point and clip. The income statements consist of informations of hard currency influxs and out flows for a peculiar fiscal period viz. the house ‘s fiscal twelvemonth.

The survey will besides analyze Canamax effectivity in reacting to alterations in the environment and the factors that may impact on its ability to accomplish its aims.

Research job

Identify grounds for hard currency flow jobs faced by SME ‘s in Trinidad and Tobago and to analyze and concentrate on hard currency flow jobs of CANAMAX LTD and urge possible solutions.

Primary purpose

The purpose of the survey is to place some of the major challenges confronting little concerns in Trinidad and Tobago with the chief focal point being hard currency flow jobs. The writer has selected to analyze the operations of one little concern CANAMAX LTD. as the primary research and will compare the findings to that of secondary research on challenges faced by SME are both locally and internationally. The survey will analyze the processs and patterns of one little concern and urge schemes with the position of work outing these jobs and therefore enable the company to accomplish and bask sustainable growing.

The study will take into consideration the influxs and escapes of hard currency and the period of clip it takes to regulate payments in an effort to accomplish competitory advantage through prudent pricing and recognition dialogues.

Aims

The aims of this thesis are to place one of the major jobs and challenges faced by this little concern and do some recommendations to turn to these jobs and this will be achieved through the followers:

Examination of the fiscal patterns of the concern operations and its policies.

Measure the fiscal direction of Canamax Ltd through the analysis of its fiscal statements in order to find the hard currency flow jobs that are faced by the company.

To urge schemes that will bring forth prudent recognition direction, hard currency flow operations, beginning of funding and sustainable on the job capital.