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To:

SOUTH YORKSHIRE NEWSPAPER PLC:



Recommendation on:
The Future Direction, Consequent Structure and Organisation of South Yorkshire Newspaper
PLC.
MAY 30, 2014

From:
Delta Consultant Firm PLC
Seminar Group: 67








Good cover sheet.










Table of Content:
No. Title Pages
1. Excusive Summary 1
2. Introduction 1
3. Corporate Structure 2
4. Group Profit and Loss Account 3
5. Balance Sheet 3-4
6. Cash Flow 4-5
7. Future Direction 5

Good contents page.... but you need to include page numbers on the report or it wont
work so well!!
















1.0Executive Summary:
1.1The challenge South Yorkshire Newspaper PLC faced:
1. Do not have sufficient cash to buy new technology equipment.
2. Suffer high negative non-operating exceptional items.
3. Need to concern in liquidity ratios to meet short-term obligation.
4. High borrowing loan cost.
1.2 The solution we recommended is stated as below, additional and detail solution will
be explained in the content. Solutions:
1. Issue more shares or bonds to increase its capital, to buy new technology system and
equipment.
2. Improve liquidity ratio by raising the value of assets, reducing the value of current
liabilities or negotiating delayed or lower payments to creditor.
3. Borrow short term loan to reduce interest rate.
1.3 Consequent Structure and Organisation
We also provide some recommendation to the top level management peoples, about what
they can do to enhance their company business activities.
Perhaps a little brief... however i like the numbering and the fact that this is a
standalone summary of the report.

1.3Introduction: According to your contents page this should be number 2.
This purpose of this report is to firstly analyse the current demanding trend on local
newspaper on both morning and evening newspaper. Does the level of demand of each r ??
change? And find out what is the cause of the change. The cause of the change is others
medium such as television and internet has slowly substitute peoples interested of reading
newspaper.
Secondly is to analyse the structure of the company, and find out potential problem of the
company and what can the management take action in order to improve the profitability of
the business.
Thirdly is to identify the financial situation of this company such as insufficient cash to buy
new equipment and borrow at high interest rate etc., and then provided solutions.
Finally is to give recommendation of what future action of South Yorkshire Newspaper
Company can potentially do to counter decrease demanding of newspaper since others
mediums have penetrate reader market.

I would put the introduction on a separate page to the executive summary.

Think about justifying paragraphs to improve presentation
Formatted: Justified
Formatted: Font color: Red




2.0Company structure

I like the graphic.

3.0Group Profit and Loss Account

Should set up some new hot topics such as
fashions, pets, culture, foods, tourism places and
comics in newspaper content to attract more
readers.
Chariman/Managing
Director
Responsible and more focus on local news such
as culture of local people, local foods and local
tourism place because each geographical areas
has its own unique characteristics.


Chief Editors
Send out a team of journalist to report news
about local historical places such as church and
museum and interview some local famous
people or legends.

Sub-Editors
Launch online newspaper to attract more
young generations to read newspapers.
New promotional activities such as give out
free newspapers every months, give out free
foods vouchers and some samplings attached
on the newspapers.
Commercial Director
Held up meeting every month between financial
accounting and management accounting
department to solve conflicts.
Financial Director
Buy more new colour printing machines to
meet the higher quality demand of customers.
Replace broken machines.
Receive reports every month from production
manager about the condition and operating of
the machines.
Production Director
3.1Problems
From the historical Profit and Loss Account of SOUTH YORKSHIRE NEWSPAPERS PLC,
we can see that the operating profit of company are not stable and the retained profit in Year
2009 showing a negative figure. Its mainly due to high negative non-operating exceptional
items incurred in Year 2009. From the detailed Profit and Loss Account for the 52 weeks
ended 1 April 2011(first quarter in Year 2011), we can see that it showing an optimistic
operating profit and profit after taxation by comparing to other financial years. However, the
current situation shows that the company do not have enough money to install completed set
of technology in order to meet the companys objective since the group has only partially
implemented the new technology. This means that the profits for the subsequent quarters
(until 31 December 2011) and profits for new few years will be affected and decreased due to
possibility of breakdown of the old machinery.
Youve identified the main immediate problem but will the company be able to raise the
funds? Also what is going to happen in the future... they are facing a reduced demand
and increasing costs...

As consultants you also need to think longer term about the business and what it will
need in future years.... in this case... do they need to keep all operating centres? Could
they have a centralised production facilty producing 80% of the news in a common
format for all areas... and say 20% individually for the local markets this would then
allow the Barnsley Argus to continue when it is currently making a loss....

The sale of premesis and existing machinery could also be used to finance the purchase
of new machinery without increasing the existing gearing of the group.
3.2Recommendations/Solutions
In order to solve the problems we mentioned above, SOUTH YORKSHIRE NEWSPAPERS
PLC should issue more shares or bonds to increase its capital. Also, they also can choose to
borrow short-term loan instead of long-term loan which may charge higher interest rate in
future. From the current situation, company needs more capital to increase companys profit.
With the ample amount of capitals on hand, it enables the company to demand a completed
set of new technology or machinery. Company should not take the risk which only partially
implemented the new technology, it may lead to serious consequences when the system
breakdown. In order to increase the companys profits, a completed set of technology system
and machinery is very important because it can help to avoid the issues such as breakdown of
the system. The outputs of the company will be affected during the breakdown of the system.
Therefore, new machinery and technology system is required.


4.0Balance Sheet
Since a company that is consistently having trouble meeting short-term debt is at higher risk
of bankruptcy, thus South Yorkshire Newspapers plc should be concern in liquidity ratios to
measure the companys ability to meet short-term obligation.
Working capital
Working capital = Current Asset Current Liabilities

Working capital

The result of working capital of company has enough cash to pay bills. The working capital
in year 2010 and 2010 is positive. The working capital is sufficient liquidity in company; it
can use to invest in machines and so on. But if the company occurs negative result may
indicate the money is needed to meet expenses. If the company lack in the working capital, it
may difficult to growth the business or facing bankruptcy risk.
Current Ratio
Current Ratio =




Current Ratio

In the South Yorkshire Newspapers plc case, the current ratio is measurement the companys
current assets against its current liabilities. Comparing in year 2010 and 2011, the current
ratio 2010 has more liquidity issue compare with year 2011. If the current ratio too low, may
indicate that a firm may have difficulty meeting current obligations such as the investor
should take note in companys operating cash flow in order to get a sense of its liquidity. The
high ratio generally an indicate of stronger financial position and may mean there is cash
available for the owner to withdraw, but if high it may be sign problems in managing
working capital for example leftover current assets after deducting current liabilities.
Operating Lease
Operating lease also known as off balance sheet financing. The operating lease will effect on
no assets or liabilities are recorded in balance sheet. It maybe will cause some problem to the
company.
4.1Recommendation:
a. Improve liquidity ratio by raising the value of assets, reducing the value of current
liabilities or negotiating delayed or lower payments to creditor.
b. To improve the balance sheet ratios, may can speed up inventory turnover and reduce
the time it takes to collect receivable.
c. Emphasizing cash payments may include revising the accounts receivable policies to
encourage customers to pay their invoices earlier.
d. Improve current asset by raising shareholders funds.
e. Convert fixed assets ton cash for example sell-off unproductive assets.
f. Increase the cash balance with a long-term loan.
g. Companies must include swaps on balance sheets.
h. Companies must record all assets and liabilities on balance sheets.

This is a scatter gun approach to recommendations, which look like a list from a text
book, you need to concentrate on your client and be specific and detailed with
recommendations including timescales and costings where possible.#
2010 2011
=12,572-10,581 =1991 =14,127-11,252 =2875
2010 2011
=

=1.19 =

=1.26
Are these a priority at the moment?
5.0 Cash Flow
For the cash flow problem, South Yorkshire Newspaper should borrow loan from bank such
as short term loan. Short term loan can enjoy a lower interest rate, thus, will have lower
borrowing cost. Other than this, South Yorkshire Newspaper can also change supplier in
order to make a price comparison, get the lower price to save the cost. In addition, they may
also dispose the unused fixed asset; this may help to save the asset maintenance costs and etc.
Lastly, South Yorkshire Newspaper can rush the debtor payment. Get the shorter credit term
to pay the lower interest rate compare to longer credit term.

6.0Future direction
The future direction of the company will be focus on these few areas:
Implementation of new technology
As mention in the case, the machinery is old and may have a consequent high level of lost
production due to breakdown. From here, company could replace the machine which are
more technology advance and capitalized it. Capitalized the machine prevent company
from incurring high expenses on the year of purchasing the machine.
Level of advertising
So far, company faced with two problems which are advertisers are requesting the use of
multi-colour copy which at the present time is not available due to mixture of printing
technology, and new soft new mediums such as free newspaper.
Here are the recommendations for the two problems
1) As aforementioned, in future, company is going to replace the machinery which is
more technology advance. By having the new technology, company is capable to
fulfil the request from the advertiser.
2) Company focus more on the consumer preferences and try to differentiate themselves
with those free newspaper. For example, there are more content and information in
the newspaper compare to those which are free.
Change in consumer preferences
Based on the information, people demand on evening newspaper which contains major
national stories, major local stories, information on local events and local advertising.
Therefore, company has own teams of journalists which gathered local news and events,
this group people will retain and focus on the local news preparation and also the
information on local events. Company can also continue takes national news from several
national and international news agencies. For the local advertising, company can give
incentives to attract local advertiser to advertise in their newspaper, for example, discount
for advertiser who regularly advertise in their newspaper.

People who buy local papers dont want national news as they can get this more efficiently
using television... so these papers need to do something different... which i would suggest is
concentrate on local news and sports...giving them a niche market/ differentiation.

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