Business Resource Management and Financial Analysis of Hendy’s Ltd.

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ANDREI - UNIT 2 BUSINESS RESOURCES
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Table of Contents
Assignment 1: Retaining and recruiting the right people...........................................................3
P1............................................................................................................................................3
P2............................................................................................................................................3
M2...........................................................................................................................................4
Assignment 2: Impact of Non-financial Resources....................................................................5
P3............................................................................................................................................5
M1...........................................................................................................................................5
D1...........................................................................................................................................6
Assignment 3: Role of financial resource..................................................................................7
P4............................................................................................................................................7
P5 (M3, D2)............................................................................................................................8
P6 (M4, D3)..........................................................................................................................12
P7..........................................................................................................................................14
Reference list............................................................................................................................16
Appendices...............................................................................................................................19
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Assignment 1: Retaining and recruiting the right people
Job Role: Customer Relationship Manager (CRM) at Hendy’s Ltd
Job description: The CRM in Hendy's Ltd are the ones who look after the dreams, wishes,
and needs of its consumers. He/She requires having a versatile ability to solve the problems
of its customers. It is CRMs responsibility to provide better service to their valued consumers
(Brewster et al. 2016). They might have the talent not only to solve their customers' requests
but also to improve and reduce the challenges and issues faced by its customers. Hendy's Ltd
"Customer Relationship Manager" has to provide total satisfaction to all of its consumers
(Thorpe, 2016). They also have the responsibility to utilise the company's services or
products to sell to its consumers.
P1
The concerned company uses specific recruitment documentation. The company at first
releases its approximate vacancies in public. The willing candidates would thereafter submit
their CVS through postal or e-mailing methods (Aguinis et al. 2017). These candidates own
declaration, abilities, professional skills, any previous anticipation, identity, and the
educational qualification would be affirmed from the testimonies of their resumes. The
company's recruitment personnel would then shortlist the worthy candidates for this specific
job role. Candidates would be shortlisted based on their earlier experience, performance, and
educational qualification. Then the company would contact these shortlisted candidates via
mail or phone to inform about their provisional short-listing. Such candidates would be given
any specific date and time to come for a personal interview session (Al Shobaki et al. 2017).
The HR managers take charge of the final selection from this particular point. HR personnel
can assemble each candidate more personally through such a meeting. Chatting and
discussing job scenario with the applicants helps the manager to understand these candidates.
Final selection also takes place from observing the candidates fit in CRM posts. The finally
selected candidates would be sent an appointment letter against her or his selection (Albrecht
et al. 2015). Therefore this is the total method of Hendy’s Ltd Recruitment documentation.
[Referred to Appendix 1]
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P2
The company expects specific communicational and personal and employability skills to
ascertain the position of CRM. The company also possesses specific recruitment criteria to be
fulfilled by the applicants of this job profile. Employability skills enable the employees to
build a friendly and mutual relationship with all colleagues. Such skills help to resolve any
internal conflicts within the management or employees (Bajorek and Bevan, 2015). Prior
experience or qualifications serve as a significant part of such Employability skills. Personal
skills are regarded as extra-curriculum or versatile skills by candidates. Employees who have
great humour sense, ability to speak a different language and being trustworthy are seen as
some components of Personal skills. Such skills help any job applicant to get that particular
job as these attributes are more useful to business workings. Communicational skills are
also essential for any job role like CRM. Hence Hendy’s Ltd demands such candidates who
have strong command over communication (Bititci et al. 2016). Such skills help to be more
interactive and adjusting to work with all the colleagues. Communication skills also help to
convert certain information between the colleagues. Excellent verbal or written
communication is required to have within the candidates who would be applying for the post
of CRM. It is because CRM requires to talk correctly with its customers and clients.
M2
All these above-mentioned communicational and personal and employability skills are
important to have within the selected CRM of this concerned company. It is mainly because
CRMs need to perform versatile work profile. They not only have to deal with customers but
also work with their clients. CRMs also have the responsibility to sell the company's services
or products. Hence they need to be versatile in their performance (DeNisi and Murphy,
2017). Communicational skills would enable them to have ample communication method to
maintain with the concerned customers and clients. Employability and personal skills would
also enable the CRMs to perform their job roles quite effectively. Such skills are also
significant to have within the applicants for the post of CRMs as such skills would benefit the
company's interest in many ways. It is undoubtedly significant to ensure that the chosen
employees are appropriate for the concerned job profile (Gutierrez-Gutierrez et al. 2018).
Therefore these different skills are significant to have within the chosen applicants of the
company's CRM post. Selecting such employees with all these skills would be beneficial for
the entire company. [Referred to Appendix 2]
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Assignment 2: Impact of Non-financial Resources
P3
Physical as well as Technological resources
In order to perform efficiently, Hendy’s Ltd. has to choose ‘physical resource' as well as
‘technological resource'. It is therefore essential to choose each resource carefully. However,
these resources could lead to Hendy's Ltd. in a positive manner.
Physical Resources- the ‘physical resources’ of Hendy’s Ltd. could be different types of
materials, buildings as well as numerous equipment (Harrison et al. 2017). The company
could not run their business daily without maintaining ‘physical resource'. Hendy’s Ltd.
could choose their location as well as premises for its operation based on their requirements.
The customer’s demand and need also be maintained by them. The management of Hendy’s
Ltd. could choose their equipment according to their process of manufacturing and its several
factors. The equipment could be chosen in a structured manner. This could help to achieve
the ‘satisfaction of customers' and operates more efficiently.
Technological Resources- main ‘technological resources' of Hendy's Ltd. could be their
‘intellectual property', such as, ‘patents', ‘copyrights' as well as the ‘skills of employee' also.
This is essential for Hendy's Ltd. to protect their ‘patents' and ‘copyrights' to further
improvement of their business (Hitt et al. 2016). This ‘intellectual property' could increase
the value of this company. On the other side, Hendy's Ltd. could not deny the ‘skill of their
employee' also. The employee of their company is efficient and operates more effectively in
order to excel within the market.
M1
The management of physical, human as well as a technological resource could improve the
performance or operation of Hendy's Ltd. in a structured way. These all three resources,
therefore, could affect the company differently. The resources of human could be one of the
most important factors that create an impact on the company (Järlström et al. 2018). If
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Hendy's Ltd. could be able to maintain a cordial relationship among the customers as well as
employees, it would be appropriate to run this organisation more effectively in terms of costs
as well as resources.
On the other side, if resources of technology could be maintained it would also create a
positive impact on Hendy's Ltd. as employees of this organisation are skilled and efficient
(Khilji et al. 2015). ‘Intellectual Property' could give the right to operate its business without
any constraints.
D1
Budgets, as well as costs, are an important factor for any organisation. No organisation could
be operated without considering these two factors. However, it is essential to maintain
budgets carefully as it could make the company insolvent. On the other side, Hendy’s Ltd.
also has to maintain the total costs in order to be more efficient (Liu and Santos, 2015).
Managing total costs as well as budgets relating to their operation could create advancement
for Hendy’s Ltd. as it gives them the opportunities and scope for further operations.
However, managing the budget is not a simple task, and this company has to manage total
costs based on this budget (Manuela et al. 2016). The report of Hendy’s Ltd. already shows
a ‘high turnover' within their business; hence it is essential to maintain the liquidity of them
in order to excel within the market. [Referred to Appendix 3]
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Assignment 3: Role of financial resource
P4
a. Description of an external and internal source of finance
It is important to raise capital for any business through which a company could perform well.
Hendy’s Ltd is one of the popular businesses that sales motor vehicles and this company is based on
the UK. However, it could be one of the important factors to know about their sources of finance.
There could be two situations through which any business or industries could raise their capital, i.e.
‘internal' as well as ‘external' source (Masri and Jaaron, 2017). Finance manager of Hendy’s Ltd.,
therefore, could choose carefully the use of sources through which their business would perform well
within the market. The given situation, therefore, states that the ‘financial consultant' have to find out
these sources and gather all relevant data which could be useful for this company in their future.
However, it is utmost important to know briefly about the different sources of finance for Hendy’s
Ltd.
Internal Source- the internal source of any business describes the position of the capital and its
different kind of factors that could affect the business internally. However, Hendy’s Ltd. could also
evaluate their internal source based on their views towards the business (Meyer and Xin, 2018).
‘Financial consultant' wanted to describe the ‘internal sources of finance' in order to know the
financial position of that company within the market. This company could be financed internally in
different ways, such as,
● Hendy's Ltd. could generate their capital for business based on the earnings on retained
equity. The shareholders of this company could reinvest their income or earnings within this
same company for betterment and growth of the organisation (Omotayo, 2015). In order to
initiate this process, the management of Hendy’s Ltd. has to preserve as well as support the
interest and wellbeing of existing shareholders.
● Another internal source could be provisioned on depreciation. Hendy's Ltd. as a car dealer
organisation has to maintain the stock in terms of capital for their future purpose. This stock,
therefore, could help this company to replace any machines as well as engines which is
unworthy of using in terms of ‘financial advancement' (Sozen et al. 2016). Provision on
depreciation could, therefore, become a major source of finance internally for Hendy’s Ltd.
● Hendy’s Ltd. could gather their fund internally through the process of Deferred Taxation.
This process states a situation where some taxable income could not be debited to ‘P/L A/C'
and hence reserved for a future period. This treatment brings some advancement in terms of
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sources of finance within the company (Stone and Deadrick, 2015). It will be a great
opportunity for Hendy’s Ltd. if they use this process for their sources of finance internally.
● Hendy’s Ltd. has to maintain its fund in order to attract external shareholders. They could
preserve their assets for investment purpose in future.
Outside source- any business or industry could generate their funds for their operation through
external sources. It is essential for Hendy’s Ltd. not to depend on only their internal source. They
have to choose the option of ‘external' also in order to the betterment of their organisation. The
external source could be generated through a different path, like,
● Hendy’s Ltd. could source their finance through the savings of people. People could buy
shares, stocks as well as a bond in order to save their money for the future purpose (Stone et
al. 2015). However, Hendy’s Ltd. could use that money to source their business.
● This company could borrow money from banks as well as other institutions as loan which
could help them to operate efficiently. However, Hendy’s Ltd. has to pay some interests
against that borrowed amount.
● Hendy’s Ltd. could also collect fund through issue shares as well as bonds within the
market. These shares could be a different kind, such as, ‘preference share', ‘deferred shares' as
well as ‘ordinary shares'.
● Hendy’s Ltd. could issue Debenture to the general public as well as their stakeholders. They
could able to earn some interests against these debentures.
● Hendy’s Ltd. also could raise their funds for their business externally through ‘public
deposits’, ‘corporate bonds’ as well as ‘Hire-purchase’ also.
P5 (M3, D2)
b. Interpretation of crucial element of financial statements
It is essential to evaluate different elements which could be included within ‘Trading a/c',
‘P/L a/c' as well as ‘balance sheet' in order to examine whether the organisation perform well
or not (Vaiman et al. 2015). This analysis could give some information about the solvency of
the firm also. However, ‘Financial Consultant' of Hendy’s Ltd. has to perform an analysis of
their financial statement for ‘current financial year' and interpret the performance of those
elements. It could give a brief idea about the business as well as the performance of Hendy’s
Ltd.
Analysis of Trading and P/L a/c
It is clearly shown that there are more investors attracted by Hendy’s Ltd. in order to the
growth of their business. The trading a/c of Hendy’s Ltd., therefore, had been shown ‘Gross
Profit' of 3,350 (Million) GBP. The ‘cost of sales' for this company has been shown the
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negative balance, i.e. (54, 141) (Million) GBP. The gross profit has been earned within
‘current financial year' by Hendy's Ltd. is 29,842,427 GBP which is higher than the preceding
year. This amount could easily be shown the size of this company. It is important to identify
the ‘EBIT' or ‘EBITDA' of Hendy's Ltd. and at the ‘current financial year,' the total
‘EBITDA' has been reached 796,797 (Million) GBP. This amount, therefore, indicates the
profitability of this company. This amount of ‘EBITA' could show the growth in ‘Net
Revenue'. On the other side, it was also proved that the company could be able to control its
costs efficiently. This is important to point out and compare ‘total turnover' of the company
with its previous year turnover. This could show the growth of the company in terms of its
sales. The ‘profit after tax' has also been reached on a positive point which was negative
throughout the previous year. However, the key elements for ‘Trading and P/L a/c' shows a
stable position of the company. (handy-group, 2019)
Particulars Amount (Million) (GBP)
Gross Profit 29,842,427
Turnover 349,877,871
EBITDA 797,796,000
PAT 1,214,812,000
Table1: Statement of Trading and P/L a/c
(Source: created by Author)
However, the total turnover of Hendy’s Ltd. throughout the year shows a positive balance for that
company; it means the employee is leaving the company. It is riskier for the company as an employee
within the company has been left which could costs the company negatively. The ‘financial report' of
this company could show the balance of ‘total turnover'.
Year Turnover(Million) (GBP)
2014 251,456,310.00
2015 273,910,620.00
2016 281,079,370.00
2017 300,749,685.00
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2018 349,877,870.00
Table2: Turnover
(Source: created by Author)
2014 2015 2016 2017 2018
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0.00
251,456,310.00273,910,620.00281,079,370.00300,749,685.00349,877,870.00
Turnover(Million) (GBP)
Turnover(Million) (GBP)
Graph 1: Turnover
(Source: created by Author)
Analysis of the Balance Sheet
As on 31st December 2018
Liabilities Amount (Million)
(GBP)
Assets Amount (Million)
(GBP)
Non-current
liabilities
Current Liabilities
Reserves
9,27,198
89,782,549
83,52,138
Current Assets
Non-Current assets
Cash
90,009,170
44,76,442
4,576,273
99,061,885 99,061,885
Table3: Balance Sheet
(Source: created by Author)
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It is clearly shown from this statement that the current assets of Hendy's Ltd. are 90,009,170
(Million) (GBP) and current liabilities are 89,782,549 (Million) (GBP). However the assets
are higher than current liabilities. Therefore Hendy's Ltd. could be able to meet their debt
within ‘current financial year' despite high turnover. Its working capital, therefore, could be
[(90,009,170 + 4,576,273) - 89,782,549] (Million) (GBP) = 4,802,894 (Million) (GBP)
Particulars Amount (Million) (GBP)
Current Assets 90,009,170
Cash 4,576,273
Current Liabilities 89,782,549
Working Capital [(Current assets + Cash) -
Current Liabilities]
4,802,894
Table4: Working Capital
(Source: created by Author)
This positive balance in ‘working capital' could state the situation where Hendy’s Ltd. has
that much liquidity to meet ‘short-term debt' of their company. Lastly, it is clearly shown that
the only negative impact of Hendy’s Ltd. could be ‘high turnover’ as the employee has been
left the company. It is therefore essential to find out the reason behind it and try to solve this
problem as early as possible.
Analysis of accounting ratio
On the other side, it would be appropriate if the management of Hendy’s Ltd. could perform
the ‘financial analysis’ through ‘analysis of ratios'. However, it would be easy for ‘financial
consultants' to indicate as well as examine the ‘liquidity ratio' of this company. ‘Liquidity
Ratio' indicates how much liquidity Hendy's ltd. Could provide within ‘current financial
year'. However, under ‘liquidity ratio' it would be appropriate to use ‘current ratio' for this
purpose.
‘Current Ratio’ = [‘Current assets’ / ‘Current liabilities’]
= [94,585,443 / 89,782,549]
= 1.05
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Current assets Cash Current Liabilities Current Ratio
90,009,170 4,576,273 89,782,549 1.05
Table5: Liquidity ratio
(Source: created by Author)
However, it could be clearly shown that the ‘current ratio' of this company could be 1.05
which is positive still the company operates within the risk. Researchers thought that this
problem relating to ‘liquidity' could cause the ‘high turnover'. However, this ratio could
reduce excess the point of 2; it would be better for them and their future performance.
Therefore, it is essential to increase the liquidity of Hendy’s Ltd. and tried to retain their
employee at any cost. (uk.globaldatabase.com, 2019)
P6 (M4, D3)
c. Budgets
In order to know to control the costs as well as identify different problems that could be
involved within the ‘sales budget' of Hendy’s Ltd., ‘financial consultants' should perform
‘analysis of Break-even Point' within this company (Willy, 2017). The analysis of ‘break-
even point' could, therefore, help the company to identify its profitability of their company.
‘Break-even point’ (Units) = [‘fixed costs’ / (‘sales price’ - ‘variable costs’) {Units}]
= [£5,600 / £ (20 - 9)] = 509 units
‘Fixed costs.' ‘Sales price’ ‘Variable costs’ ‘BEP’ (Units)
£5,600 £20 £9 509
Table6: ‘BEP’ (Units)
(Source: created by Author)
However, it is also necessary to find out the amount at ‘Break-even point', it could also be
calculated from the ‘sales budget' of this company.
‘Break-even point’ (Amount) = £ (Sales Price * BEP) [Units] = £(20 * 509) = £10,180
Sales Price (per unit) BEP ( unit) ‘Break-even point’
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