How many times in my life (especially when young) I would be in trouble and I say well my friend did it so I did it….. and my parents would say “what are you a sheep? you don’t follow what others are doing!!!! think for yourself!!! ” …… now I am being told…FOLLOW PEOPLE…gee when will I get the hang of this….
Anyway I have been learning the art of following and it’s been good, and YES you do end up making connections. I have found two people are also doing one of the other subjects (Property Valuation) that I am taking this semester.
I am currently following:
Martin (of course)
Sarah Zillmann – https://sarahzillmann.wordpress.com
Christi Chapman – https://chapmancblog.wordpress.com
Danielle Bradley – https://daniellecqu.wordpress.com
Cherekee Hill (who is also doing another of my subjects Property Valuation) https://cherekeehill.blog/2017/02/
Kerryn Zimmerman (also doing Property Valuation this semester)https://kerrynsite.wordpress.com
Suzanne Kriedemann – https://suzannekriedemann.wordpress.com
Jade Le Moeligou – https://jadelemoeligou.wordpress.com
It’s been lovely reading about everyone and putting a face to the names that we see and the interactions and comments are all lovely to read. It makes the other subject’s seem rather quiet and anti-social. I still am not sure why some care live links and other aren’t but I guess I will learn as I go.
My COMPANY!!!! ……. drum roll… (please be Cadbury Chocolate, please be Cadbury Chocolate !!!) …
MAINFREIGHT (maybe they deliver Cadbury Chocolate???)
Key Concept and Questions
So who are they and what do they do?
Mainfreight began in Auckland New Zealand in 1978 by Bruce Plested – Executive Chairman & Founding Owner and grew into a leader in New Zealand’s freight network. They expanded to Australia in 1989 and have since opened branches through-out Australia, China, Europe, United States and New Zealand. So Mainfreight is a New Zealand based global logistics provider. They pride themselves as being built on a 100-year vision, they plan to be around for at least 100 years.
What does their website look like and is it easy to use?
Link to my company website – Mainfreight
Their Website has a ‘quote of the day’ the day I first searched out the site the quote was:
“Don’t throw in the towel, use it to clean up and carry on”
I quite liked that quote as some days I do feel like the towel is ready and waiting to be thrown but I have printed out the quote to save for the next time I feel like it’s all getting too much. I found the website had good information, clearly written, constructed well and easy to use. I found out they freight internationally and domestically, they also offer managed warehousing.
Downloading the Financial Reports
…. now I am really scared .. 126 pages… This is going to be interesting, a huge company, using huge trucks, spread over different countries and 126 pages for the financial report. Where is that towel?
It seems likely to be a male dominated field so I looked into the male/female composition
Directors – (8 of them) 6 males and 2 female. I note that 5 of the males have all been with the company from the start or at least 14 years. Then another male joined in 2013 and the only 2 female directors were appointed in 2017. Female minority but it is nice to see them there. Management roles are predominately males only one female within the management teams (all countries) and again only commenced in the last year.
General Statistics – Mainfreight – Air and Ocean
. . . Total USA Europe Asia Australia NZ
Branches 239 66 30 20 51 72
Team members 6,440 718 2,020 330 1,348 2,024
Number of countries represented/affiliated in 21
General scope of what they do and how up-to-date they are with technology.
They cover everything from import and export, sea and air, customs clearance, tariff classifications, costing and consultancy, project logistics. Mainfreight can handle a wide range of products – bulk liquids, perishables, automotive from a pallet load to a shipping container and beyond. With a focus on tracking so that the clients can keep a eye on exactly where their goods are and even have an App for you to track the goods from your phone. Mainfreight is obviously not a company that doesn’t move with the times, technology is a strong point and an ongoing focus of the company.
The Warehousing and Distribution area is also a large part of the organisation with modern facilities to cope with all types of storage requirement from food to hazardous goods.
Staff focus seems to be very important to the company and acknowledgements I found.
Acknowledgement of achievement
- Bruce Plested, (Founder and Chairman) was inducted to the New Zealand Business Hall of Fame for the contribution he has made to New Zealand Businesses and the community for the last 40 years.
They appear to be very committed to their staff, they acknowledge every staff member by name listed under each country & branch they work. The Environment is also highlighted as an area that they are committed to ensuring they are doing the best for the future. Details of how they are implementing changes was very well covered.
Well that’s a very general overview of my company next is to work out the financial reports, look at information from outside the company and in the media. (and if they are able to bring me a pallet of Cadbury Chocolate to assist me with that)
What areas are they in and how big are they overseas compared to their home country?
||New Zealand (NZD)
||# 2.28 B
(EBITDA) -Earnings Before Interest, Tax, Depreciation and Amortisation
# Due to the exchange rate the total is not the sum of the individual countries as the individual countries figures as shown in the various local currency’s
Mainfreight’s general overview regarding the figures and the company generally:-
Areas that were not so good included:
- Australia and USA Domestic operations have a been found lacking in their cost management and their customer development.
- A number of building projects in New Zealand and Australia have impacted the results in both these country’s with Net Capital Expenditure being high at $93.2 M this was spent on new facilities in Auckland, Hamilton, Christchurch, Melbourne and Perth. (this should decline considerably in the next 2 years once consolidation in these facilities has been completed.
- Overheads were not managed well enough in the first 6 months of the financial year
- CaroTrans did not perform well.
Areas that showed good results
- The exchange rate of currency’s has had an attractive result in the figures.
- Management of the overheads improved in the second half the year.
- Good growth in the network as a whole.
- Customer service and reputation both continue to grow the company.
Mainfreight in the media.
It is hard to find much in the media that has not originated from the actual company itself. They are very well self-reported in the media.
Recent expansion in UK
EPA Fines from Australia – oops there is that naughty Australia again
Mainfreight’s profit and financial overview reported by News.com.au on May 26, 2016 in the finance section
Do I like my Company?
Well….. its not Cadbury Chocolate…. But…mmm Yes I like my company.
From the surface view, they look good, they have put it both good points and not so good points forward. Unfortunately, Australia featured in the not so good points but I try not to take it personally. I would like to see more women represented in the higher management positions. The ones that are currently there are only very recent additions. It does mean they are open to change so points for that. This is a huge company which was start from one very small organisation in New Zealand and they are now a Global freight company. While freight isn’t my thing, how can you not be impressed by their efforts and achievements? To be competitive and growing in the current market you must have vision and commitment. They have weathered the global financial crisis and continued to grow both financially and as a business. Freight isn’t an easy market as there is always so many things that can go wrong, break downs, delays, cost fluctuations in fuel, complex rules and regulations for import and export. Add to this, so many different items from food, liquid, flammable, heavy, large, small, fragile, unusual shapes and sizes the list is endless. So, they have my respect for a job they are obviously doing well.
My Top 3
- Danielle Bradley – https://daniellecqu.wordpress.com
Reason – One Peer that I have been following from very early. Danielle gives great suggestions to others on facebook, I have read comments she has posted on other blogs and the comments are always very helpful. Danielle’s own work on her blog is very well organised, honest and well done. I like her writing style, clear and concise. She is obviously on top of her workload and on top of the subject. Danielle inspires me to aim higher.
- Cherekee Hill – https://cherekeehill.blog/
Reason – Cherekee is obviously all over this blogging and so good at helping with how to insert things. Her blog is well organised and easy to read. I love the way Cherekee changes people into the accounting terms it adds humour and learning into the accounting equations. I enjoy ready the story and learning at the same time. Cherekee shows me what can be done when I learn more about blogging
- Kerryn Zimmerman – https://kerrynsite.wordpress.com
Reason – Very in-depth in her research, injects a little humour occasionally to lighten the mood. Writes well and has a grounded honesty in her questioning of her research. I have enjoyed reading her work and how well it flows and area that I struggle with. Kerryn guides me question what I am reading and think of Why?
Company spreadsheet – will uploaded separately not finished yet.
When I first started working for a Pty Ltd company and doing all the bookwork etc I sent it all off to the accountant and received back the bound copy Annual Report, I had a read and filed it in the draw thinking that would be it. I was surprised just how many times I must access the file to send it off to other organisations: –
- The Bank – for finance approvals – that was expected.
- Companies that we open trading accounts, even just small business like hire companies and store accounts that only have a small credit limit – I felt it was our business not theirs.
- Centrelink – (The owner has children) – they already know everything about you as they are attached to the ATO why do they need more?
- The licencing body for the company QBCC – We build houses we are not asking them for finance or credit.
- The Taxation dept – that was one I expected
I promptly found I needed to get the accountant to send me a copy that could be sent via email as the bound copy was far too large to scan and email. Two sets of records then became evident. The accountant sent me a scaled down version of the original, he removed some of the sections that did not need to be viewed by some parties. The figures were the same just some areas were not required. It was the same format just it was only figures not so many pages of wording and working out.
I also found it very confusing as the Pty Ltd company was the trustee for a family trust and there are so many times when filling out forms that it was vital that you filled the name in correctly depending on the circumstances. I also found it interesting when mail came from the ATO addressed just to the ………… family trust. Even when I had to do the group certificates I found I worked for the trust not the company. One of my most repetitive questions to the accountant was, is that the trust or the company?
While I find this course confronting (not used to so much interaction and struggling with the technology etc) I can see and feel the effects it is having on my learning. When I was looking at my company’s financial reports and information there were a few times when I had a “light bulb” moment – Ah.. that’s what they were talking about yesterday on facebook. It also does help with the general understanding when others are writing about their own prior experience and you can see things from another perspective.
Quality of Information – by error or by choice?
While the Financial Reports do provide a set of figures, balances and outcomes they are still fluid, changeable and never precise as they can always be requiring future adjustment.
Error – Only the other week I was speaking to the owner of a local store and she was having problems with her online bookwork program and as I had used the program before she asked me to look over it with her. Together we worked out that she had been missing a vital step when processing her end of week accounts resulting in the figures not being carried into her BAS. This had been missed for several years and thus her BAS reporting and end of year reporting will require changes and re-assessment. The outcome being approx. $2000 bill for money now owed to the ATO for 3 consecutive years. While compared to the company’s that we are all looking at $6,000 isn’t much but for a small family owned business this is going to make a significant impact in their personal finances. Including the added expense of the work their accountant will charge for doing the adjustments. So, had you looked at the financials last week they would say one thing but reality is $2000 off the bottom line is the true figure.
This brings me to a quote – ‘A chain is only as strong as its weakest link’
It only takes one weak link to undo a lot of hard work.
Choice – creative accounting – is what I call it. I worked for a building company and there was more than one time we were approached by investment builders who were buying large parcels of land, subdividing them and then marketing them out to investment buyers. They offer a completed home at a fixed price and then as part of the deal offer guaranteed rent of $…. per week for a year. They would come to us and want us to do a house and land package with a kick back to them of $.. that would basically mean the investors were paying the one year’s rent as part of the price of the house and land deal. Although it is not a Financial Report as such, the investor is still given a set of figures that look all perfect, they do not know the cost of each component and labour used in construction a house but unbeknown to them the figures may add up but there were hidden components. They also market the current rental return for an area but never bring it to the investors’ attention that their plan to build 200 houses in that area the rental property market will be in oversupply and at the end of the year the rental return will be not be achievable. They give good marketing figures to the investors based on the current supply of rental properties and the five-year history but no future figures when there is an oversupply of houses. Whilst you can’t know the future, there is still expected future outcomes based on current changes.
Comparability – How can you compare Financial Statements?
There are so many ways to do even simple items, like a motor vehicle. Business 1 has a fleet of new cars all lined up in the carpark. Business 2 has older cars. Business 3 has a mixture. Business 1 is leasing the cars. Business 2 owns the cars. Business 3 are leased but included in the staff wage packages. There is one view from the outside of the business as you drive by and another view when you look at the financial statements. I find it all very complex to try and make a comparison or understanding of the figures in the business when there are so many ways to represent the same thing. What will be the cost to the business over 1 year, 5 years and 10 years on the vehicles which is the cheaper option. Is it cheaper short term or long term?
Is it a game?
Is it monopoly in real-life?
Is it the role of the dice?
Is it Luck?
Is it Skill?
Is it true understanding?
My first question on Chapter 3 is how do we know what to do and when? I struggled for quite a while about if I need to make any reference to the Parent company in my spreadsheet and here is the direction that I needed. It’s so hard when there are many things to do. The assessment is set out in a numbered sequence but I realize it would have been better to read chapter 3 before doing my spreadsheet. There is so much to take in and time pressure to act or get behind.
Cash? Are we not a paperless society do we not all just have a card in our wallet? How can you trade at a loss and not go broke? If I stop paying my bills and leave the money in the bank am I rich or poor? Okay I am still poor…
This is a word that is so important in business – without trust what do you have?
Trust is its own entity it is as important as the air we breathe and the food and water we need to stay alive. Every day everything you do has a trust factor. Eg you want petrol, you trust your car to not break down before you get to the fuel station, you trust that the fuel station has fuel when you get there. The owner of the fuel station trusts you to fill up your car and then actually pay for the fuel, you trust the employee and the business with your card that they will process the right amount and not reuse your numbers. You trust the business to provide non-contaminated fuel. The business trusts the employee not to steal the money or to make an error. The business has the fuel from the supplier who is trusting he will pay his bill at the end of the month because the supplier must pay other people that are also trusting him. The driver that delivered the fuel is trusting the supplier to pay his wages at the end of the week so he has the money to put fuel in his car so he can get to work. TRUST is a never-ending circle but one break in the trust line and the whole thing will fall apart.
I challenge the trust issue to the cash issue as being the most important. You can have money in the bank but if you don’t have trust do you have a business?
I still struggle with words in accounting which is ironic as accounting is numbers… isn’t it?? I get so confused with why they call things what they do – debit card always sounds like debt to me where as credit card sounds like credit as in positive the same with so many of the words I wish they were named something else. Revenue (IRS America’s version of ATO) makes me think of tax so tax feels like something that money owed not something that is a positive.
While I am generally understanding each report and the information it includes. I am still struggling to understand the truth of what they are telling us in respect to the business as an entity. While I am not wanting to just put down a summary of my learning as Martin clearly states he knows what is in it he wrote it. This course is teaching us learning and this is my way to learn – sorry
Paper verses reality or my version of reality.
Assets = equity+ Liabilities
Single asset – Truck = Loan from Bank + deposit paid by owner
Balance sheet – Everything the company owns = Money from owner + loans
Revenue – expenses = profit
Single income – sold a bottle of milk – cost of the milk = profit
Income statement – income/sales – cost of product = gross profit
Gross profit – tax – rent – other costs = nett profit
In the beginning, there was the initial contribution of equity (from the owner or shareholders buying shares) or a loan to start up the company.
- At the end of the year if there is a profit some of that money could be refunded to owner or paid off the loan.
- If there is a loss – more money would need to be contributed by increasing the loan or gaining more funds from equity (owner or shareholders).
- If a new asset needs to be purchased this will also need to come from an increase in the loan or from equity.
- An asset is sold the money can flow back to the loan or the equity.
Cash flow statement
Proof the business has enough cash/money in the bank account to meet its bills and commitments.
Is it reality?
It is the reality for now, perhaps?
Question 3.1 & Question 3.2
What ‘works’? Having twice as many current assets as current liabilities sounds like a solid platform but it again can’t be proven to stand up to future changes and can’t account for every eventually. Dare I mention Trust again? The financial reports are still just a current overview dependant on the information used and the quality of the information. It does not account for so many other things as there is no true way to predict the future.
Using a framework is just another assessment of only a part of the business. A business will always be more than the balance sheet or the numbers on a page. You can assess the data and use a formula or a framework to assist but it will never be a complete picture. By the time you finish doing your calculations the business figures have changed. Even the most up-to-date figures are old. The books are closed as at the set date but by the time they have been totalled by the business, sent to the accountant, worked on by the accountant, reported back to the business and printed the business has continued to trade and change in every way there will be unlikely to be one figure on the book work that is now current. The business is also relative to the space if operates within. What works in one demo-graphical location is not a guarantee in a similar location. Business is built with more than just facts and figures it is people and no two people are the same.
If you made it all the way to the bottom I commend you!!!!
YOU DESERVE SOME CADBURY CHOCOLATE – NOW WHO DO WE KNOW WHO CAN DELIVER THAT?