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Assignment Stage 1(ASS#1): Getting Started		CQUniversity Martin Turner ACCT11059 – Using Accounting for Decision Making Zoe De-Witt (S0271932) Due 7th April 2015

Step 1

My personal profile on Moodle is complete with a description and a photograph. You can access my blog here: http://zoeannde-witt.blogspot.com.au

Step 2

The company I was assigned is the Silver Chef Group.

Silver Chef provides equipment funding solutions to small to medium sized businesses. You can find the latest Annual Report below, and also attached with final submission.

·       2014 - Annual Report year ending June 2014

A Brief History

Founder Allan English established Silver Chef in Australia in 1985 after learning about the booming home delivery pizza service in America. Believing in its potential growth within Australia, he and his business partner invested in conveyor ovens. Unfortunately, many small pizza businesses couldn't afford to purchase these ovens, so the pair came up with the idea to rent them out instead.

Following their success with the leasing of pizza ovens ten years later, Allan bought out his business partner and constructed a program in which his clients would be able to obtain the equipment they needed for their businesses without having to commit large amounts of capital up-front. Thus, launching the Rent-Try-Buy option to the hospitality sector, expanding from his pizza oven days, providing a full range of kitchen equipment.

Continuing down the Silver Chef timeline, in 2005, Silver Chef was admitted to the Australian stock exchange. Furthermore in 2008, a new initiative was launched, the GoGetta. This option branches out towards other industries offering equipment funding to small businesses who are just starting out.

Subsequent demands to expand the company internationally in 2011, Silver Chef was launched in New Zealand to franchise partners within the hospitality sector, further expanding to Canada in 2013.

Today, Silver Chef provides equipment funding solutions to small to medium sized enterprises, helping them to reach their full potential within their business sector. Rent-Try-Buy is currently available to clients in hospitality, while GoGetta offers a 'go.rent.go.grow.go.own' solution to more than twenty industries including construction, fitness and transport.

Silver Chef places an emphasis on creating a unique culture that helps many people alike achieve their hopes and dreams. Silver Chef is guided by principles of Teamwork, Respect, Attitude, Flexibility, Integrity, Communication and Wellbeing instilling these core values into their everyday work year after year.

Key Concepts and Questions

After reading through the last three years of Annual Reports for Silver Chef, I noticed that the firm appears to be improving with each financial year. However, with further reading, I noticed that there are some key challenges that the firm is having. The new expansion into Canada has cost the firm $1.3 million dollars, slightly deceasing the EBITDA margins. Due to the expansion being very recent, only $3.6 million was generated between both Canada and New Zealand, the majority was in Australia with a growth of $93.1 million, that’s a 26% growth from year ending June 2013. Bad debts have increased into FY15 and the main risks that the group is facing with that are credit risks and residual asset risks. The group manages credit risks by:

·       Receiving rental payments by direct debit a week in advance which allows the credit team to identify issues early

·       Receiving a security bond at the beginning of the contract which is used to offset and overdue amounts owed

·       Seeking out to work with small businesses and their cash flow commitments; if a contract remains in arrears, recovery action is implemented

The group manages residual risks by:

·       Registering its rental assets on the Personal Property Securities Register and retaining title over these.

·       The use of agents to recover assets on defaulting contracts

·       Management of returned assets; assets are cleaned serviced and remarketed through direct sale or back onto a new rental contract

I think the methods the group is using to manage these risks are adequate because the group is still making over $12 million in profit despite the bad debts being at 1% of the rental income. These bad debts were caused by $1 million worth of rental assets being written off after being stolen near the beginning of contracts. The only other negative I noticed within this report is that the share price fell at the end of FY14 from $7.38 (FY13) to $5.07, other than that the firm appears to be meeting all their goals. The firm’s highlights for the year include:

·       Asset acquisitions up to 10% to $137.7 million

·       Revenue up 24% to $141.3 million

·       Rental assets (at cost) and lease receivables up to 16% to $299.0 million

·       Profit (after tax) up 11% to $12.7 million

·       Earnings per share (EPS) up 5% to 43.4 cents

·       Equity up 16% to $67.7 million

With restructure and expansions, the firm is catering for future growth paired with an increased focus on staff training, the firm is creating solid foundations to build onto. The firm believes that if they continue to meet their high customer satisfaction levels, then business will continue to grow, this outlook is linked to staff bonuses to insure that these levels of satisfaction is met.

 At first I had a number of concerns with this assignment, I found everything very overwhelming and to add to the worry, I have never done any sort of accounting subjects before, which lead me to become very confused when reading through the annual reports. I found it quite difficult reading these reports trying to gain an understanding of what I was actually looking at. After countless hours of reading, I ended up going to my boss at work and asking him to help me interpret the reports to me. Once I understood the terminology, I was quite happy to go ahead and learn more about my firm. It was actually really good to be given Silver Chef since I work in the hospitality industry; I learnt that the business that I work for actually leases some equipment from Silver Chef, which made it all the more interesting.

Favourite Blogs – Top Three

•        JADE - https://jadetringale.wordpress.com

I love how Jade has a friendly attitude in her blog; it makes it so much more exciting to read. She has provided extensive research into her firm, and gives us good insight into how well her company is performing. She is very honest in her blog, which really is the whole point to a blog in my opinion.

•  JODIE - http://jodiesuniblog.blogspot.com.au/2015/03/my-company-lend-lease.html

Jodie’s first post was just my favourite; the title was what lured me in! Jodie has described her company in simple terms that makes it easy for everyone to understand, but has also provided a lot of detail. She connects to the reader very well offering a good opinion with good research.

• MADISON - http://madisonbriskey.blogspot.com.au

I like Madison’s blog because firstly she is studying the same degree as me, so I find her quite relatable! She has researched her company thoroughly and I found it quite easy to read and understand what her company was about.

Step 3

Please find attached a copy of my spreadsheet containing my company’s financial statements.

Step 4

Summary of Chapter One KCQs

Throughout the chapter I found myself getting slightly distracted every few minutes or so, my mind would trail off to thinking about something else, so I did find it quite difficult trying to take in the entire chapter. However, I did find some bits quite amusing, like when you wrote about how accounting is a model – not a fashion model, had a little giggle to myself. Although I found the section about Luca Pacioli quite interesting, I thought it was funny that he was the first person to publish the method considering it had been around for many years before that, its crazy thinking that accounting has been around for so many years.

The discussion on partnerships really cleared up the relationship between both of my bosses and how they run their business. I found this, as well as so many other things quite relatable, like how you enjoying playing piano. I myself actually play an instrument too and I always love finding out that others can play music because it’s not so common. I also liked the way you relate a topic back to something simple that I can understand and wrap my head around. I do struggle with studying and it makes the learning process so much easier for me.

Some things I didn’t quite understand were the accounting equations. I did read over them quite a few times trying to understand them, but I just kept confusing myself. Another thing I struggled with was a few terminologies, but that was easily fixed with a quick dictionary search.

I found it quite surprising that so many people in business have an accounting background, but I suppose it make sense because it would help these people to understand how their businesses operate. It’s pretty hard to believe though that you had to use a typewriter back in the day to type and submit your assignments. I couldn’t imagine life without the technology that we have today, so when you spoke about the keyboard layouts and quills, I found it quite boring, sorry!

The key things I need to remember about this chapter is that businesses are everywhere and that they all use some sort of accounting to record daily activities. I also need to go back over the accounting equations a really break down the paragraphs and understand what it all really means.  

Summary of Chapter Three KCQs

(Still need to do - waiting on to see if my first summary was okay and whether i should follow the same idea) 

Step 5

Student Feedback

The five students in my group include Kyara Beasley, Kylie Urquhart, Lara Mathews, Laszlo Rauch and myself. The students whom I have chosen to give feedback are listed below. Their names are inclusive with feedback.

• Student One – Kyara Beasley

Feedback:

• Student Two – Helen Bensilum

Feedback:

• Student Three – Lara Mathews

Feedback:

My Received Feedback

(PENDING)

Annual Reports

So I've been trying to understand my firm's annual reports for days now, and it only just occurred to me last night, hey my boss owns his own business maybe I should ask him for some help!
Seriously swear this was the best idea of my life because I think I know what I'm looking at now (think!) :P
Anyway, I'm off to bootcamp, going to die! Martin if I don't submit my assessment you know why! Haha!! Heres a copy of my firms annual reports if anyone wants to check them out. Silver Chef are doing pretty well in terms of profit!

2014 Annual Report

2013 Annual Report

2012 Annual Report

COMPANY OVERVIEW

The company I have been assigned is named Silver Chef Group.


A Brief History

Silver Chef was established in Australia in 1985 by founder Allan English after learning about the booming home delivery pizza service in America. Believing in its potential growth within Australia, he and his business partner invested in conveyor ovens. Unfortunately, many small pizza businesses couldn't afford to purchase these ovens, so the pair came up with the idea to rent them out instead.

Following their success with the leasing of pizza ovens ten years later, Allan bought out his business partner and constructed a program in which his clients would be able to obtain the equipment they needed for their businesses without having to commit large amounts of capital up-front. Thus, launching the Rent-Try-Buy option to the hospitality sector, expanding from his pizza oven days, providing a full range of kitchen equipment.

Continuing down the Silver Chef timeline, in 2005, Silver Chef was admitted to the Australian stock exchange. Furthermore in 2008, a new initiative was launched, the GoGetta. This option branches out towards other industries offering equipment funding to small businesses who are just starting out.

Subsequent demands to expand the company internationally in 2011, Silver Chef was launched in New Zealand to franchise partners within the hospitality sector, further expanding to Canada in 2013.

Today, Silver Chef provides equipment funding solutions to small to medium sized enterprises, helping them to reach their full potential within their business sector. Rent-Try-Buy is currently available to clients in hospitality, while GoGetta offers a 'go.rent.go.grow.go.own' solution to more than twenty industries including construction, fitness and transport.

Corporate Philosophy

Silver Chef places an emphasis on creating a unique culture that helps many people alike achieve their hopes and dreams. Silver Chef is guided by principles of Teamwork, Respect, Attitude, Flexibility, Integrity, Communication and Wellbeing instilling these core values into their everyday work year after year.