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Breadtalk Group Limited vs Old Chang Kee Company Analysis Essay

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Breadtalk Group Limited had outlined areas that needs to improves. Firstly, under principle 1under board matters(breadtalk annual 2010 report,pg 32), despite directors are being appointed to the board by a formal letter of appoinment indicating the amount of time required and scope of duties, some directors espicially new directors are not clearly aware of discharging their duties. Board members needs more update and initaitive to gain better understanding of the group business operations and policies. Thus board members are encouraged to attend comprehensive orientation programme , seminars and trainings to improve their capabilities in discharging their duties. This control measure is to ensure that the board members are in-line with …show more content…

This will review any conflict of companies interest within the board members.

Overall, by comparing these two companies. Old Chang Kee Ltd has a smaller appriopriate of board members to effectively facilitate the operations of the group with the right duties, expertise and experience. Hence, the commitment level within the board members is higher and the operations of the group is more managable from time to time. Conflicts are interest are constanly reviewed. Unlike Breadtalk, as is more board members, there will be greater unresolved conflicts of interest within the board members.Especially board members that does not have the adequate skills and experience will either fall behind or conflict with the companies interests.

Gearing Ratio:

Gearing refers to the amount of debt finance a company uses relatives to its equity finance. It is a measure of capital structure and basically there are three methods to calculate gearing ratios:

1. Book values and including all borrowings;including short-term borrowings.
2. Long-term loans and equity at book value
3. Market values and including all borrowings.

2 methods were adopted for calculating gearing rations(total borrowings divided by total equity) and net gearing ratio(total borrowing less cash and cash equivalents divide total equity).(source: breadtalk annual report 2010, pg 139).Gearing ratio will be examined to find out the debts Breadtalk has. The ratio

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