Accounting and Finance in AS Diena

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Accounting and Finance in AS Diena - 5 - Table of contents Introduction 2 Methodology 2 Company background 3 Accounting system 3 Annual reports 4 Analyses used in Annual Report 5 Key ratios 6 Conclusion 8 Reference list 9 Introduction “Accounting is the language of business”…Indeed, like no man without ability to express his thoughts clearly and understandably can achieve very much in life, no firm can succeed without a good accounting system. Accounting is a necessary tool which not only provides information to the owners about how its money is working, and to the state about how big the taxes are to be fetched, but, the most important, enables the company to control, to plan and to trace all the actions, processes and projects. The purpose of this report is to find

out how the accounting is done in a successful company, and how the principles and methods used there differ from the traditional accounting theory. In addition, the analysis of the company’s performance will be worked out using the standard ratios. The decision to choose AS Diena for the report has been based on several criteria: it is one of the 100 largest companies in Latvia, it has a leading position in its branch of industry, and it is a good example of young and fast-developing Latvian business. Methodology The analyses and findings presented in the paper are based on the information received from the interview with the chief accountant of AS Diena Inese Janikovska and from the Annual Report 1997 of the company. The Report mirrors the financial data of AS Diena and its

subsidiaries: publishing house Diena Bonnier SIA, advertising agency METRO, Bauskas Dzive SIA, agency Agro Apgads SIA, Kursas laiks SIA, Dzirkstele SIA, Zemgales Zinas SIA. The information about subsidiaries is included in Annual Report in limits of financial year starting from the date of acquisition. Furthermore, the theoretical side was strengthened with the knowledge gained from the lectures by Elvi Sederlin and Gunnar Lindholm, and from the course textbooks “Business Accounting” and “The Profitability, Financing, and the Growth of the Firm”. To make the key ratio analysis sensible, a similar size enterprise operating in the same branch of industry was chosen for comparison. For this purpose, the figures from the final accounts of AS Preses Nams were taken from the

Lursoft database and used in the analysis. Company background The Latvian-Swedish joint-stock company AS Diena was founded in 1992. In 1996 it was transformed into stock corporation. In fact, it is a group of companies with parent company and subsidiaries. The share capital of the company consists of 6000 fully paid ordinary shares, moreover, each share has a nominal value of LVL 10 and its owner possesses one voting right. The shares of AS Diena do not participate in stock exchange, and no deals among the shareholders are allowed. The most important shareholder is a Swedish company “Expressen AB”, which owns 2940 shares, i.e., 49% of share capital and votes. In addition, it can be pointed out that the sales turnover at 1997 constituted almost LVL 9.5 mil, and the average

number of employees was 847. The officially registered kinds of activities of AS Diena are as follows: publishing printing work and related services reproducing of computerized materials agents dealing with sales of the wide range of goods wholesale The present strategy of the firm is development as a media and media infrastructure company. To conclude, AS Diena now enjoys the benefits of the large market share and solid reputation, and it will undoubtedly try to maintain and to improve the current position. Accounting system Accounting system in AS Diena is fully kept on software and all the transactions are done automatically. The main software accounting program used is Mac Hansa. When the record is made, the account is closed automatically, and the balance is sent to the next