Chapter 1- Key Concepts

Firstly, thank you to the author for using  quotes at the beginning and keeping me intrigued enough to  to start the course! At first glance of chapter 1, I honestly had no expectations. I was a little nervous about starting accounting with no real prior knowledge of what was to come.

Comparing the basic accounting principles with
my job has given me a better understanding of
business realities. 

As I mentioned to my readers earlier, I work for a finance business but I am definitely not a numbers girl, not usually anyways. Reading that accounting is a concept that extends far beyond these figures may have given me a slight sigh of relief.

The study guide quotes, "Businesses (and accounting) is where we can make a difference to the lives of those around us". This is so very true as I reflect directly on these stakeholders and business owners around Rockhampton and the value they really hold for consumers. We can use accounting to connect with the business owners, and help them in turn benefit its investors by establishing the true measure of value.  As I saw from the accounting presentation by Evans Edwards Chartered Accountants (mentioned in a previous post), a simple manipulation/alteration to the accounts on the financial statement of a business named, 'Rebecca's Coffee' made a large difference in the outcomes for each fiscal year and on the equity investors. Using 'Cashflow Story'  they showed that by reducing the amount of days allowed for accounts receivables from her customers, Rebecca would be saving a large portion of money in affect of reducing her active capital.

Types of Businesses 
Looking at the list of businesses around Yeppoon, you realise that no two are the same in a similar location and its not surprising that the author proposes such a concept. Despite the black and white images being slightly boring, they are all represent various types of businesses, selling differentiated products. I had never really took in the concept that there are so many around us- company's, sole-traders,  trusts etc. and until now I actually never knew about the concept of trusts. Before reading this chapter, a business was a business and I would use the term loosely when referring to companies or organisations. In reality, these business types clarify how the business operates and the legal responsibility held by business owners or beneficiaries. Being employed by a sole-trade means the legal rights and responsibilities for my boss would be emphasised less than operating under the Corporations Act as such.

Historical Elements of Accounting 
I understand why the author began with the proposition of accounting an an ever-changing concept, but to relate its heritage to the layout of a keyboard is where I became a little inattentive. The section did prompt the question however,  'If Luca Pacioli  is the 'father of accounting', but only wrote the book about double-entry book keeping than who actually invented it?'

It amazes me that accounting has been around for so many years but like many things, has changed and evolved over time to become more efficient. Using the concept of trial balance for example, it made book-keeping look overwhelming. Bookkeepers would have to be very particular, especially with the risk that there can still be underlying errors when balancing the accounts. I can completely relate. At school, I remember this particular exam where I had completed a whole balance sheet for my business class by hand. With confidence, I thought I had finished as everything balanced and the reconciliation was accurate but when the paper was returned, I was graded down for confusing my assets and liabilities that were transferred from the ledger.

Nowadays we really do operate in a book-less record keeping world as book-keeping has shifted from these systematic methods to computer inputs. It is something I never thought about until now as the business I work for hires accountants to keep the finances in order. With all the accounting programs available today however, you would think that the concepts in accounting would be easier to grasp.

I really didn't know that MYOB stood for 'Mind Your Own Business' - such a great pun for the title of an accounting program I thought!

Accounting Backgrounds In Companies 

It's also interesting that half of the board of directors listed in Australian and New Zealand companies have an accounting background of some nature. Just like Martin's company, Ryman Healthcare, for my company this also applied. Investigating Oldfield's staff, unsurprisingly enough the companies board member, Mr Timms, has 28 years of accounting and taxation experience behind him. Additionally, the Human Resource Manager also gained her experience working in Financial Services and the National Manager of the scaffolding sector has completed his Masters in Business Administration and Applied Finance. It just goes to show that having financial knowledge as a leader of any business is an important asset in terms of human capital.

Entity Concept 
The concept of proprietorship or entity concept.This stood out to me as a worker of a sole-trading business and that it works on the premise that there is no real legal distinction between the owner and the business.  I could not understand how an owner is separate as the owners have complete access to the bank accounts and monetary obligations. When I enter the transactions that occur in my workplaces business arrangements however, I have come across the concept of 'drawings' . It outlines to me how the owner's accounts are separate to that of the business and if any money is withdrawn from the entity for personal use, my boss is to transcribe this into the journal to separate the expenses.

Reading this section of the chapter, I wanted to gain greater knowledge of the concept as it was mentioned a considerable amount of times in class. From here, I also learned that it can be explained by how and why a sole-trader's equity (such as contributed share capital) is listed as a liability to a firm. A business such as Finance First for example may issue $2000 distribution of its sole shareholder to accommodate wages and personal expenses. This will deduct equity from the firm as value is lost and in-turn becomes taxable income on the owner's personal income statement. I can now see that without this concept, the personal and business entity's records would intermingle and create difficulty to ascertain the taxable or financial results for the single business. For a large consolidated group like Oldfield's Holdings this would be especially so!

Debits and Credits
Although in the brokering business I work for, no money exchange hands directly from clients and the owner is operating to provide a service, mutual arrangements between outside investors still exists which is represented on the balance sheets as debits and credits. This  knowledge and understanding of debits and credits..what a struggle!  I find this interesting to try an understand, a challenge even. These may be the basic accounting concepts to grasp but for me it is taking a while. For years I confused the terms, and always thought of it in the way it is formatted on our bank statements each month, assuming it was just a word used to describe the money that is coming in. So far, the only firm hold I have developed is that debits are on the left side of a financial statement and credit on the right. I am hoping that as I continue my studies this semester, defining the terms will come more naturally.

Assets 
Assets. I understand these are a fundamental aspect of accounting as I input these at work on a daily basis and agree with the requirement that assets should hold future value. As I help with the preparation of home loan applications, I list the client's assets as a way of showing the banks the property the clients 'own' (both tangible and intangible) but I thought I was familiar with how the concept occurs until now.  It would always be the same thing for each client, '2010 Hyundai Getz, home contents, Superannuation,' but when I look at it from a business perspective, what if the car has mechanical issues? One client of Finance First were seeking to refinance a home loan and used their stationary car as an asset. Its funny how our minds work, but: How can we class this as something of future benefit if it is unable to leave the owner's driveway and would this be more of a liability than asset to a firm when calculating borrowings for a bank? It was the definition from the study guide of an asset  that appealed to me, and I had this realisation of how banking and loan applications operate for our business associates in comparison to what I have read. I feel that this is something that more financial institutions may need to re-establish and address.

Measure of value
Accounting is clearly a business model that can help us connect with the happenings in a firm and initiate a measure of value. If bills are paid late, the owner of my workplace is away sick, or we are simply using more items from the inventory as usual such as printer ink/paper, these day-to-day realities of the business I work for (regardless of how small Finance First is) could write an accounting story all of its own. Or if we talk globally, I noticed that my assignment company's profits had down-turned in the previous fiscal year. The circumstance was directly related to increased labour and import costs of their operations in Asia, clearly giving an example that every change and number brought about by a firm speak for the realities of the businesses and the changing environment. Increasing labour and import costs, or buying more paper from suppliers thus affect what transactions are recorded in the books, and in terms of precise dollars helps us as outsiders make judgments based on current circumstances.

The Fundamental Accounting Equation
What a way to finish a chapter. I found figuring out and processing the accounting equation a little uncomfortable and having a boring nature despite realizing the way it ties the 5 principles together. Its importance is noted as is the concept that represents the business model but equations in general I have had trouble with in my previous years of education, It has taken me various  attempts to understand (Assets + liabilities = Equity  + Revenue + Liabilities) and even now I am not really sure I have captured it to its full extent. I understand the terminology in a separate notion but when placed together in the formula, it takes me a while to engage with the relationship of each term.

Overall, I find that the author of the chapter is trying to ground us on what is to come in our accounting course, even through the use of historical facts and imagery. Giving us an understanding of the essential elements is seemingly important for the weeks to come, which is why I am hoping to grasp such concepts as assets, credits and debits more before I confront the larger task ahead.

Chapter 3- Key Concepts

I'm reading this chapter at 5'o'clock in the morning and wishing that I had read more of this before viewing my firm's annual reports. Here, the chapter is covering some simple, yet slightly confusing concepts of accounting (at least for this time of the morning) that are important to my analysis of Oldfields Holdings. The author states in his introduction that when it comes to financial statements, "It is very difficult to remember anything unless we are interested in it and it means something to us personally" So very true. I put off reading my firm's statements for days. I didn't understand it at first, I lost interest quickly and it all became a bit overwhelming. It was a 'party' I definitely didn't look forward too!

I would have never thought of something with the plain title 'annual report' as a marketing document but when I look back at my own company's reports, I notice the happy couple painting and the bright colours on the cover. Maybe it is trying to represent a bright future for Oldfields? The annual report (and the directors statement alone) took considerable mention to the various strategies that will increase the future value of the business; how the business will grow as an asset to its investors in 2015.

Balance Sheets
Balance sheets are a concept I am familiar with from previous years of study, although I failed to recognize that they are only based on one day of business operations. If balance sheets were not prepared regularly, imagine how overwhelming a balance sheet and financial statement would be to comprehend. My company for example is 80 years old, and this short-term representation of accounts on the balance sheets, I understand, provides more information about the current state of finances than a long term report. Oldfield's has seen dramatic variations to its assets and liabilities over the past 4 years alone, so to identify with these accounts for the entire period of the business life (after all my company's various endeavors) would be difficult. Establishing profit and loss would be of no benefit to equity investors as the information would provide no measure of true value. I know from personal experience in my workplace for example that banks request banks statements from clients that establish there current account balances up until a particular time. It gives them an idea of what current monetary assets exist during that period, as no value can be placed on the past balances in order for customers to be accepted for loans. It wouldn't be logical.

The footnotes at the bottom on this section are a very helpful tool in recognizing how various areas of the annual report are a reflection of these business processes throughout the year. I had an issue with understanding some key terms, particularly 'Trade and Receivables' when reading the balance sheet but have now gained in depth knowledge of how the accounts receivables are impacting the accounting aspect of Oldfields Holdings (As seen in my Company KCQs). I realise Martin was right in saying no two financial reports are the same, and nor do they have to be. Every company has a different background and underlying policies regarding their reports and terminology which is why annual reports don't follow a distinct set of financial standards when compiled. For some reason, my thought processes used these footnotes to give this sense of realisation.

Separation of Entity's and Consolidation
Consolidation and Parent Entity's was important to me as it was crucial in the readings of my company's reports. In my definition, it is the acquisition of various companies into one in the compilation of assets, equity, liabilities and operation accounts in a financial statement.  As my firm's financial statement is produced as a compilation of numerous entities that make up 'Oldfields Holdings' I found understanding this key aspect of the annual report quite interesting and fundamental as subsidiary organisations have shares in my firm, and in the recent financial year the group has disposed of three.

From a personal perspective, during the recent cyclone in Rockhampton, I was lining up at the registers in Bunnings (the queue was long!) to purchase some cookware to help us last without electricity. Another customer behind me commented, "Wesfarmers must be racking in millions after today's sales." which I can now connect with the need to consolidation. Coles and Bunnings are owned by this parent company, Wesfarmers which I learnt in recent years is Australia's largest public companies and retailers. With the numerous franchises of Bunnings alone, the amount of customers they transact with (especially through the peak of natural disasters so it seems), and the market value they are gaining, it is not hard to understand the extensiveness of this entity's accounts alone. For me, recognition can now be made through the amount of company's in our local area alone whose financial reports are likely to be compiled this way as a more comprehensive view of a financial position.

Statement of Changes in Equity 

So lost! I am struggling to get my head around the statement of changes in equity and I am particularly concerned with the opening balances. Although I understand how it flows, I am overwhelmed with how it will need to be formatted in the finance statement spreadsheet.

Question-  When it states, Balance as at (insert date), do I class this as the opening balance for each financial year or the closing? When I input each value, the total using the excel formula, does not add up to the same amount as is stated in the annual report which is a bit of a concern. 

However confusing and nerdy the state of changes in equity can be, the importance of such a statement is clear. Firms are always exchanging value in markets to add value to equity. As I reflect on my firm, there was an increase in the investors section of the equity statement over the latter 12 month period and I found this to be a key concept of chapter 3. For Oldfield's, additional investors reflected an increasing of its markets to different customers in 2011. My firm was definitely not as boring as Barry Humphries dancing with his mother all night. When your at work each day, doing recurring activities, you don't notice the incurred changes as much as I found when viewing my company's reports. Taking a step back it can be seen that industries are always on the move; introducing new products and making investments into new ventures which then creates an increase in the value of equity. In agreement with the author, equity is more than just a left over amount, it provides the heart of a business.

Also, the many terms that relate to this statement are unfamiliar to me, particularly the term ' Comprehensive income' which sparks the question, "what activities can 'other Comprehensive income' include?" In my firm's annual report, this change in equity was classified as 'A comprehensive Income Statement' and 'Other Comprehensive Income' was mentioned, although no-where did it state was income this involved.

Ratio 
After all the mention of Greek mathematics, ratios are still hard to decipher for me as I struggled to establish a clear definitions from the readings. I found the author dragged on the ideas Greek history to a point where I lost my grasp for the concept. Although, I can see why ratios are important however. They are used in comparison processes to systematically analyse and compare businesses in same or similar industries as well as different aspects of a business' finances over a given time frame. Without ratios, it would be somewhat operose for a company to establish where it sits in the market. Oldfield's uses Gearing ratios and interest cover ratios to establish the firm's financial statements, as well as mentions of Return on Investment when referring to the sales of dividends. Gearing ratio I learned, compares the owners equity to the borrow funds of Oldfields, and for 2014 this was 48% of total capital in comparison to previous years. Using this ratio, firms are provided with a measure of financial leverage in demonstrating the degree to which a firm's activities are funded by an owner's funds as opposed to bank loans which helped Oldfields establish the need to increase capital.  No matter how complicated the ratio equations are found to be, they are required to identify these strengths and weaknesses of a firm and note to owners how businesses are performing throughout the years.

Cash Flow Statement 

Cash may be something that we use on a daily basis, but for a business it can be critical. The cash-flow statement can provide the ultimate bottom line for a business as it gives insights to the liquidity/solvency of a firm as well providing evidence of the inflow and outflow of transactions from that period.  No matter how much loss a business is making, it is the fear of running out of cash that has the greatest impact on going-concern. I think of net-cash in terms of borrowing money from a bank (definitely my background of working for finance broker coming out). Firms can have  non-current liabilities that include borrowings and overdrafts from the banks that can provide funding but without proof of this cash as an on-going asset, the chances of refinancing loans is almost nil. I find this important as my company has been facing issues of cash flow in the past fiscal year. To meet the challenge, Oldfield's have had to negotiate terms of a debt buy-back with their principle lender to continue operating. Alike our bank accounts, once its gone its gone which is why so many businesses in our local area have been forced to close. The retail outlet, 'Ally Fashion' for example was appearing to be doing well in our local shopping center. There was always frequent traffic in-store but this wasn't enough of a financial circumstance to avoid closure. For these reasons, I am in complete agreement with author, no other asset on our balance sheet has the same negotiability as cash. Money does not lie. 

Shares and Dividends 

I'm familiar with the concept of dividends to an extent as I studied shares in grade 12 and have now established its role in a company such as Oldfields Holdings. Non-controlling assets for example was an item in my the firms equity statement and with the company operating as a part of the Australian Share Market, regular dividends are paid to these shareholders each year based on the companies dispensations. Oldfields is now standing at 0.076 per share with 82.18 million shares in total which impacts the distribution of equity for the firm, and in turn the companies value because stockholders equity to a corporation is what owner's equity is to a sole proprietorship.

The decision of dividends paid to shareholders laying ultimately on the board of directors is an interesting concept. Investors rely on figures and future forecasts to decipher a good investment when the bottom line is based on company policy.This is probably because we rely on the discounted dividend model (Equity value = PV of expected future dividends) and prefer money in our pockets today, rather than those we would like to receive in future earnings. However, if profits were to drop as did Oldfield's, the price of shares would be less value to investors regardless of whether the board decided to increase the proportion of profits that is to be distributed to non-controlling assets. A 50% increase in proportion paid may look good on paper, but in my opinion the forecasting of future value of shares is not as reliable as it seems. This is especially so for companies such as the group I studied whose financial position is clearly unstable and revenue levels alternate regularly.

Question- There could also be an increase in the amount of shareholders for the company. Couldn't this lessen the amount of equity transferred between each?

Question- Does the price of shares in the share-market affect the dollar amount of dividends distributed or are these only used in calculation of the purchasing and selling of stocks?

Additionally, I found it intriguing that firms repurchase shares from equity investors in share-buy packs. I always thought that dividends were only sold between various outside share-holders once the initial purchase is made and the only relationship companies had with them is through the payment made annually. This would simply be due to my only experience of shares being my dad receiving his annual dividends statement from Aurizon and The Commonwealth Bank each month and classifying the amount as an income to deposit into the bank.

However, by repurchasing outstanding shares, a company aims to reduce the number of shares on the market in order to increase the value of shares still available (reducing subsidiaries) or to eliminate threats by shareholders who may be looking for a controlling stake. To me, its a control mechanism used to improve equity value for a firm. I feel this is similar to my company engaging in a debt-buy back arrangement which I mentioned previously. Oldfield's holdings bought back its debt from Westpac bank for a substantially discounted amount in order to reduce the debtors fixed obligations on a 'once and for all' basis.

Question- Would the commissions the owner of my workplace receives from the banks for the home loans be considered a dividend?

Dividend/Cash-flow Equation
Expression of a dividend in this way is definitely a stretch of my basic understand of dividends as mentioned above. When the concepts of Operating cash flow, capital outlays, and net cash flow from debt owners are brought together I become lost in understanding. My reaction to these equations was the same as the fundamental accounting formula from chapter 1. I can grasp aspects such as the definition of operating cash flow for example, but when they are interconnected to calculate dividends and transactions for a company, my mind becomes a blur.

Particularly,  I would like to gain more knowledge on the measure of EBITDA as it relates directly to sections of my firm's cash-flow statement. For Oldfield's, these figures decreased from $929,720 in 2013 to $777,396 in 2014 and affected the equity value of a firm. Although, I cannot establish why and would now like to take further research.

Question- What does the term 'amortisation' mean? 

In saying that, it is not hard to see why cash flow and dividends have this relationship. Operating cash flow for example, is accounting for any of the external activities of a business that raises a company's capital, and in turn, repays the investors which can include debtors and other entities to which the value of equity needs to be transferred. The inputs and outputs of cash within a firm's accounts indicate how financially strong the business is and how likely the dividends are going to be paid. Negative cash flow activities including paying out these dividends to equity investors and these negative flows can reach a point where a company is forced to borrow more, or enter liquidation.

For Oldfield's, I noticed that according to the director's report in 2014, the group had missed an annual payment of dividends to non-controlling interests (with the amount paid in the previous year being  $148, 512). I am now wondering if this is a result of the decrease in net-cash indicated by the cash-flow statement with direct relations to the concepts in the dividend/cash-flow equation. Clearly, this is an acquisition I need to work on.

My Top 3 Favourite Blogs

1. 

https://inmyworldbytashmuller.wordpress.com/

This blog captivated me before I began reading. Great presentation and layout! Tash has used an appealing colour scheme and simple illustrations to keep the reader interested without taking away from what she is telling us. Reading the introductory post, I was kept engaged with her writing and I felt welcomed and ready to learn more about the accounting game. As for the content, she has compiled quality and relevant information about her company and the industry.  I can see she has developed a true understanding for Sarossa and leaves me feeling like I have gained a lot as well.

2.

http://rebecca11059.blogspot.com.au/

Rebecca’s blog is interesting with its regular updates, keeping the readers up to speed with her company and the assignment. For her Chapter 1 Key Concepts, I found it really easy to relate to this author. When reading through the study guide, I too had similar insights and idea on accounting. From the readings of her company, I have actually begun to also understand aspects of my own firm. The concept of subsidiary companies and consolidation was worded appropriately and is now the reason I am noticing more about my companies recent changes. Rebecca shares her thoughts and opinions on accounting and the study guide well. It was easy reading and I understood completely how she was trying to come across to us readers.  Great presentation and great blog!

3.

http://millsycqu.blogspot.com.au/

My third choice for my top 3 is a simple, yet eye catching blog. To me, Natasha’s blog provides a great source of information about her company and yet still manages to make it interesting to readers. I admire her sense of humour as we study this course as it comes across in her writings. My company too is hurting and feeling the pain of competition, and I like how she brought this aspect of her firm across in her posts.

Bank Allows Oldfield to Buy Back Debt? Half Price?

From an accounting perspective, I have found this  interesting article about Oldfields and their debt! You can find this article here. Written back in 2012, it shows that Oldfields were still in a state of trouble. The company is termed as being on life support which is a great classification considering the recent threat to the going concern assumption. The Chief Executive states, "I Would say we are out of the danger zone," and I would love to have warned him back then that he shouldn't speak too soon. Well done to Westpac bank for supporting the business. It just goes to show how important the value of stakeholders are, especially after 80 years!

Bank allows 80-year-old manufacturing icon Oldfields to buy back debt at half price

Thursday, 13 September 2012 23:56

JAMES THOMSON

Eighty-year-old manufacturer Oldfields will emerge from life support thanks to a deal with Westpac Bank that will allow the listed company to buy back $10 million worth of debt for just $5 million. 

The deal, which is contingent on Oldfields completing an equity raising to fund the $5 million debt repurchase, will allow the company – which has a market value of $4 million – to trim a debt load that remains above $14 million.

Oldfields chief executive Chris Giles says the company has worked with Westpac for the last three years to get what is clearly an unusual resolution.
"They like the story, they see that we are doing the right thing and we are trying to resurrect a business that has been around for more than 80 years," he says. 

Oldfields has started the process of talking to brokers and shareholders about the equity raising and while Giles describes the reaction of shareholders as "guarded" the company is confident they can get the raising away. 

Oldfields is best known in Australia as a maker of paint brushes and other painting equipment. It also has a scaffolding division that supplies the building sector, and a garden shed division. 

Giles says Oldfields' problems started in 2007, when a series of ill-timed acquisitions "didn't quite fit the business strategically" and plunged the company into debt. The arrival of the GFC, which hit the building sector particularly hard, compounded the problem.
"It's was just a badly timed expansion plan. I think the business just basically over borrowed," says Giles, who arrived at the company in 2010. 

With much of its working capital tied up financing its debt, Oldfields has been forced into rounds of cost-cutting and asset sales – including offloading the businesses it bought just before the GFC. 

Giles says the equity raising and the debt repurchase will allow the business to start using its working capital for growth rather than survival.
"I would say we are out of the danger zone. One thing this business has lacked is investment in the business itself. 

"This will free us up and give us the ability to look at opportunities. Unfortunately at the moment, new products and new developments are a 'love to have', but 'not just yet'."
Giles says much of his focus in the turnaround has been on the company's internal culture. He has brought in new staff and invested in incentive, training and recognition programs. 

"We've now got a better blend of short and long-tenure employees. Everyone has really embraced the change. I think people can see progress being made."
The company has also upgraded its packaging, brought all products under the Oldfields brand and will soon start a small marketing campaign in order to complete the revitalization process. 

"We forgot about our core customers to a large degree – that was probably because of the financial position we were in – but we are reconnecting with them," Giles says.
"Oldfields is an iconic brand, but it you are under 50, you probably haven't heard of us – and we want to change that."

Google 'Westpac and Oldfields'

Oldfield's Cleaning Products...A Not So Solid Investment?

Hello my fellow readers, 

Today, I found this interesting yet somewhat prejudice article about Oldfields from back in 2012 as I am struggling to find any recent. I acknowledge Oldfields and its many business endeavors such as that to sell cleaning products, the type you can buy from such places as 'The Reject Shop' the articles says.  The company bought the private cleaning label in 2008 for a whopping 3.2 million dollars. A lot for cleaning products right?

To term the investment as an "exciting new acquisition" was an exaggeration of reality I say. In the end, the business extension could not be classified as an asset clearly because crippling debt resulted and I wonder why!

The article mentions that the going-concern threat also came close back in 2012, but profit margins were not the problem? According the the article, Chief Executive Officer Chris Giles, quotes ,"There is no issue with margin, all we lack is volume," The company wanted to increase distribution instead of bumping up prices which was a risky decision based on what we know now on the increased prices of resources and supply imports  from Asia.

I question my company and its many business decisions, hoping that it will continue living up to its 'quality, innovation, leadership!' motto.

View the article here.

Getting To Know Oldfields Holdings

The Company that has been assigned to me for assessment is: OLDFIELDS HOLDINGS LTD. 

Oldfield Holdings is an engineering company. Established way back in 1916, the company was traditionally a manufacturer focused solely on selling high quality PAINT BRUSHES! Yes, they started out small but doesn't every business? Oldfield's today however, are now an innovative marketer, importer and manufacturer of a large variety of divisions. The principal activities of the consolidated group during the previous financial year are as followed:

• manufacturing, importing and marketing of paint brushes, paint rollers, painters tools and accessories distributed to well known brands such as Masters.
• manufacturing and marketing Treco Garden Sheds and Greenhouses , outdoor storage systems, avaries and pet homes which was bought by Oldfields' in 1999
• Advance Scaffold -manufacturing and marketing of scaffolding and related equipment; and
• Hire of scaffolding and related products

For over 95 years, the company has been a trusted iconic Australian brand and market leader that was first listed on the ASX in 1960 with its debut in these markets (with ventures such as its operations in Indonesia (2011) being one the companies major success stories. Oldfield’s now employs over 140 staff with its head office in Campbelltown, Sydney. A large majority of the company's operations are conducted in Australia across their ten national locations. 

My research so far has shown that the company has been feeling the competition and its activity has been historically lower!  Profits after tax have down-turned with a loss of over $2 million since the 2013 fiscal year. With increased competition across all divisions and impacts such as the increasing price of imports from Asia, there is no surprise that the company was somewhat affected by this globalised economy. It’s not hard to see by how much either.

The company director has mentioned that threats to the going-concern assumption played out as a result of loss of profits. He states that a combination of circumstances represented a material uncertainty that may cost significant doubt on the group’s ability to continue. This was a surprising statement to comprehend as Gregory Park (Company Secretary) also mentioned, “These initiatives made in 2014 will continue in 2015 and are expected to support future growth of the business."  I am keen to investigate this situation further as the question arises for me on how a company can continue to operate this way while under threat of possible liquidation. 

At first, I assumed this company was somewhat boring, especially when I read about what they sold, but it is growing on me and it’s quite impressive from a business perspective how far they have come! Like most of you, I had never heard of my company before today but I now look forward to finding out more as I continue my assessment and finish reading the annual reports.

Caity xx 

Promotional Video

Here's just a quick promotional video to get you more involved in the Oldfield's business..try to enjoy! :) For a industry leader, it was a struggle to find this single video! 

It's All A Part of The Game

"Never let the fear of striking out, keep your from playing the game." ~ Babe Ruth

Last week through my workplace, I attended a presentation hosted by Evans Edwards Chartered Accountants in regards to understanding balance sheets and financial statements. Pretty convenient in the lead up to reading the 60 page long (x3) financial reports for my assessment don't you think? They discussed profit and loss, net capital, assets, liabilities and all those figures that make up the accounting game but what really spoke to me was the ways to which anyone can manipulate and understand a business' finances and actually guide them into a safer, economically effective future. 'For quality of information is what a users of that information gets out of it; it is your experience of using information, not what accountants or management have put into the information, " These words of Martin Turner, our lecturer, stood out to me Tuesday night as I sat in the cold conference room. To learn accounting you need to understand it and become apart of the whole virtual picture. The presenters used a program called 'Cashflow Story' which showed us that by just reducing one amount on a balance sheet, the mentioned firm could save thousands.

Last week I wanted to give up, and let debits and credits win. But by grasping a better understanding of balance sheets for a start, I'm am definitely ready to play! I honestly thought accounting would be boring course to take but its funny how just one lightbulb moment can change your entire opinion of something.

Caity xx