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FDM FOR CENTRAL ASIA METALS

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School
University of California, Los Angeles**We aren't endorsed by this school
Course
BUSINESS L 511
Subject
Finance
Date
May 11, 2024
Pages
16
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FDM 1 FDM FOR CENTRAL ASIA METALS (CAML) PLC By (Name) Institution Course Name and Number Instructor City and state Submission Date
FDM 2 Executive Summary Central Asia Metals (CAML) plc is a base metals producer listed on the AIM of the London Stock Exchange. Its operations are in Kazakhstan and North of Macedonia. The accounting and finance functions of this company are responsible for maintaining precise financial reporting, making good financial plans and doing strategic decision making. The accounting team is accountable for managing financial records, generating financial statements, assuring tax compliance, and executing internal controls. In addition, the finance department centres around financial planning, capital allocation, investment analysis, risk management, and investor relations. The shortfall of the financial performance of CAML can be substantiated by the analysis of several key ratios, namely, return on capital employed (ROCE), net profit margin, current ratio, and the debtor and creditor collection periods over the past two years. The firm's assets may remain stable but, with deterioration in profitability and liquidity metrics, it could raise doubts among the would-be investors. While CAML aims to expand its business in Uzbekistan, which would require another £120 million for funding, the company's competence in managing finances and minimizing risks will take the lead in determining the outcome of this project and CAML as a sound investment.
FDM 3 Table of Contents Executive Summary ......................................................................................................................... 2 Introduction ...................................................................................................................................... 4 Task One .......................................................................................................................................... 4 Introduction to Central Asia Metals ................................................................................................ 4 Definition of Accounting and Finance ......................................................................................... 5 Accounting ............................................................................................................................... 5 Finance ..................................................................................................................................... 5 Critical Evaluation of Accounting and Finance within Central Asia Metals (CAML) plc ............. 6 Role of the Accounts Department ................................................................................................ 6 Role of the Finance Department .................................................................................................. 7 Conclusion ....................................................................................................................................... 8 Task Two ......................................................................................................................................... 8 Financial Statement Explanations .................................................................................................... 8 Income Statement ......................................................................................................................... 8 Statement of financial position .................................................................................................... 9 Calculations ................................................................................................................................ 11 Performance of Central Asia Metals (CAML) plc ........................................................................ 12 ROCE ......................................................................................................................................... 12 Net Profit Margin ....................................................................................................................... 12 Current Ratio .............................................................................................................................. 12 Creditors Collection Period ........................................................................................................ 13 Debtors Collection Period .......................................................................................................... 13 Creditors Payment period ........................................................................................................... 13 Conclusion ..................................................................................................................................... 14 References ...................................................................................................................................... 16
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FDM 4 Introduction The main objective for this report is a critical analysis of accounting and finance operations within Central Asia Metals plc (CAML), a metals production company that is listed on London Stock Exchange's AIM market. In this section, the report will outline the functions of the accounting and finance team and discuss CAML's financial performance by looking at the ratios calculated from the company's financial statements. Accounting can be defined as dealing with preparing, analysing, and reporting the financial transactions of an organization, which is indispensable in decision-taking, regulations, and stakeholders' reporting (Happay, 2023). Finance, on the other side, is a specialized field which makes possible to manage a company's capital sources that include debt and equity financing, investment analysis, and risk management (Happay, 2023). The CAML companies accounting and finance departments are fundamental to the company's operations and the strategic goals. The financial accounting department is liable for financial reporting, bookkeeping, tax compliance, internal controls and costing, while the finance department that concentrates on financial planning, capital management, investment analysis, risk management, and investor relations (Teodorescu, 2021). They are the main functions that CAML should focus on in order to maintain their growth and profitability, especially if the organization plans to expand their operations in Uzbekistan by building a new extraction plant, which will need £120 million of funding. Task One Introduction to Central Asia Metals CAML is a base metals producer of the AIM market of the London Stock Exchange with copper operations in Kazakhstan and a zinc and lead mine in North Macedonia. The Company was included in United Kingdom (based in London) and successfully raised an amount of £48
FDM 5 million in its initial public offering (IPO) in September 2010 (Pilbeam, 2021). The funds from this source were directed to construction the Kounrad recovery plant in the region of central Kazakhstan. In November 2017 the company finalized the deal on the purchase of Sasa zinc and lead mine in Macedonia for a consideration of about £315 million. Besides, CAML now is going to grow and drill another extraction plant in Uzbekistan for the next 5 years. The Company estimates that for this undertaking they would require about £120 million. In this regard, it is necessary to consider the office of accounting and finance departments in the organization. Definition of Accounting and Finance Accounting Accounting can be defined as the measurable process of recording, analyzing, and reporting the financial transactions of an organization. It entails the preparation of financial statements, specifically the balance sheet, income statement and cash flow statement, which are very essential as they bring out the financial position, performance and cash flows (Taxmann, 2021). Accounting is one of the most important operating functions because it provides organizations with financial data to help them make decisions, meet regulatory requirements, and report financial information to stakeholders. The accounts department at CAML is responsible for keeping track of and accurately recording all transactions concerning the operations of the company, such as selling and spending, and prepares financial statements as the most accurate representation of the company's true financial position. Finance Finance is a discipline that involves managing a company's capital sources, which can be classified as the process of acquisition, allocation, and utilization of funds. It covers a wide spectrum of activities which includes things such as the financial planning, the investment
FDM 6 analysis, the risk management, and the corporate finance (Strutner, 2023). Finance has a crucial role in enabling organizations to have enough capital, to expand and realize the set strategic goals. This process entails debt or equity financing of funding, monitoring the cash flows, assessing various investment prospects, and making decisions pertaining to mergers, acquisitions or disposals. Critical Evaluation of Accounting and Finance within Central Asia Metals (CAML) plc Role of the Accounts Department Financial Reporting: Analyzing, recording, and reporting financial transactions in accordance with the generally accepted accounting principles or GAAP and relevant accounting standards. Thus a clear picture is obtained regarding the company's finances and performance, which in turn provides stakeholders with a transparent view of the company (Zuniga, 2019). Bookkeeping and Record-keeping : Making certain that all financial records are kept accurate and up-to-date with regards to accounts receivable, accounts payable, payroll, and inventory management is part of responsibilities. This will be the basis upon which the company will monitor and track its financial activity and this will help management arrive at the right decisions (Powell, 2020). Tax Compliance: Computation and remittance of taxes (such as corporate income tax, value-added tax (VAT) and payroll taxes or social security contributions) to the respective authorities. This enables the company to comply with tax laws and regulations, avoiding any possibilities of the company being caught and penalized legally for such acts (Tremblay, Lalancette and Roseveare, 2019).
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