Task:
Additional resources (reference material):
Answering template:
Here is the background information on your task As Administrators, we are required to use our commercial knowledge to achieve the highest potential value in selling the assets of an entity. This typically includes researching various websites to ascertain estimates of market prices. The sales channel selected can heavily influence the net return on sales. For example, a large auction house will be able to complete the sale of a large volume of assets but may not achieve the highest value. Selling assets individually may provide the highest value, however it may take a greater amount of time and effort. Considering the type and number of assets being sold will help determine the most appropriate method. Applying commerciality in this situation will help the creditors secure the highest return on their outstanding claims against the company, contributing to a successful outcome for all parties. Here is your task Review the below email from Emmanuel, download the information from the 'Additional Resources' section and email him back, providing an estimate of the valuation and explaining your methodology. You should also submit your spreadsheet workings below. Email: Hello As you know, IDC has decided to enter its Australian transport division, IDC Logistics (a separate entity) into voluntary administration. I would like you to help us with assessing the range of assets the division owns and demonstrate the best sale method for these assets. You will need you to research different ways in which assets can be sold to achieve the highest return. This requires a commercial mindset to ensure the best returns are achieved for IDC and any creditors. Please note, some of the assets will not yield a high enough return to sell and can be disposed of for nil cost. You will need to consider the cost of selling each asset time and effort) to make this judgement. I have attached a template, so you can document the expected sale price, method of sale and any other information you think is necessary. There is a tab in the spreadsheet that outlines some of the sales channels we regularly use in projects such as this. Hopefully this helps your analysis. Here is a list of the assets which have been identified (there are some further comments in the spreadsheet): Prime mover Fleet (x6) Trailers (x10) Fuel store (20,000L) Generators (x3) 1996 Toyota Camry Coffee machine Fridge (almost new) Microwave Stationary (approx. value $200) Office fit out Leased premises Trade Debtors ($50,000) Kind regards ASSET SALES CHANNEL DESCRIPTIONS Sales Method Description Assets sold via this sales method All asset types Auction Disclaim / Write off Assets of low value Small amounts of stock Out of date stock Leased premises Trade On Recover WIP Recover Debtors Reduce certain liabilities All assets are sold via an auctioneer. Auctioneers will usually receive a commission on the sales proceeds. The administrator can write-off the value of any asset. This is often done when it is not commercially viable to recover the value through another sales method. This method is used when the administrator decides that the best way to recover the value of a company asset it to continue trading the organisation (WIP / Debtors) Assets can occasionally be sold directly through dealers in a specialised field. This is done if it is commercially beneficial for creditors and can achieve a higher return (S) than if the asset is sold at auction. Dealers Businesses (entirely) Vehicles Machinery ASSET WORKSHEET Asset Additional Information Asset Value Additional Notes Sales channel 8 Source (Paste link)Source (Paste link) Prime Mover (6) 3x Kenworth 1400 (2017) 3x Kenworth T400 (2017) 1x Mecedes-Benz Actres (2017) 2x Volvo FH600 Globetrotter (2016) Trailers (x10) 5x refrigerated Maxitrans trailers (34 Pallet) 3x Vawdrew Pallet Trailers (b-double) 13 2x tanker trailers 14 Trade Debtors Work already completed. Invoiced already to debtor and awaiting payment. 15 Fuel Store (20,000L) 20,000L of Diesel 16 Generators (x3) 17 AEG 5000W Diesel Generators Used condition with minor damage AEG 5000W Diesel Generators Generators (x3) AEG 5000W Diesel Generators Used condition with minor damage AEG 5000W Diesel Generators Used condition with minor damage 250,000 kms, broken transmission 1996 Toyota Camry 18 Coffee Machine Jura Z6 automatic. 6 months old 19 LG Fridge Near new, water/ice dispenser on the front, stainless steel, 450litre Samsung Microwave Approx 36 months old Stationary Office Fitout Leased Premises 600sqm block, large shed, secure fencing, could be utilised by another trucking company, storage/warehousing company Here is the background information on your task As Administrators, we are required to use our commercial knowledge to achieve the highest potential value in selling the assets of an entity. This typically includes researching various websites to ascertain estimates of market prices. The sales channel selected can heavily influence the net return on sales. For example, a large auction house will be able to complete the sale of a large volume of assets but may not achieve the highest value. Selling assets individually may provide the highest value, however it may take a greater amount of time and effort. Considering the type and number of assets being sold will help determine the most appropriate method. Applying commerciality in this situation will help the creditors secure the highest return on their outstanding claims against the company, contributing to a successful outcome for all parties. Here is your task Review the below email from Emmanuel, download the information from the 'Additional Resources' section and email him back, providing an estimate of the valuation and explaining your methodology. You should also submit your spreadsheet workings below. Email: Hello As you know, IDC has decided to enter its Australian transport division, IDC Logistics (a separate entity) into voluntary administration. I would like you to help us with assessing the range of assets the division owns and demonstrate the best sale method for these assets. You will need you to research different ways in which assets can be sold to achieve the highest return. This requires a commercial mindset to ensure the best returns are achieved for IDC and any creditors. Please note, some of the assets will not yield a high enough return to sell and can be disposed of for nil cost. You will need to consider the cost of selling each asset time and effort) to make this judgement. I have attached a template, so you can document the expected sale price, method of sale and any other information you think is necessary. There is a tab in the spreadsheet that outlines some of the sales channels we regularly use in projects such as this. Hopefully this helps your analysis. Here is a list of the assets which have been identified (there are some further comments in the spreadsheet): Prime mover Fleet (x6) Trailers (x10) Fuel store (20,000L) Generators (x3) 1996 Toyota Camry Coffee machine Fridge (almost new) Microwave Stationary (approx. value $200) Office fit out Leased premises Trade Debtors ($50,000) Kind regards ASSET SALES CHANNEL DESCRIPTIONS Sales Method Description Assets sold via this sales method All asset types Auction Disclaim / Write off Assets of low value Small amounts of stock Out of date stock Leased premises Trade On Recover WIP Recover Debtors Reduce certain liabilities All assets are sold via an auctioneer. Auctioneers will usually receive a commission on the sales proceeds. The administrator can write-off the value of any asset. This is often done when it is not commercially viable to recover the value through another sales method. This method is used when the administrator decides that the best way to recover the value of a company asset it to continue trading the organisation (WIP / Debtors) Assets can occasionally be sold directly through dealers in a specialised field. This is done if it is commercially beneficial for creditors and can achieve a higher return (S) than if the asset is sold at auction. Dealers Businesses (entirely) Vehicles Machinery ASSET WORKSHEET Asset Additional Information Asset Value Additional Notes Sales channel 8 Source (Paste link)Source (Paste link) Prime Mover (6) 3x Kenworth 1400 (2017) 3x Kenworth T400 (2017) 1x Mecedes-Benz Actres (2017) 2x Volvo FH600 Globetrotter (2016) Trailers (x10) 5x refrigerated Maxitrans trailers (34 Pallet) 3x Vawdrew Pallet Trailers (b-double) 13 2x tanker trailers 14 Trade Debtors Work already completed. Invoiced already to debtor and awaiting payment. 15 Fuel Store (20,000L) 20,000L of Diesel 16 Generators (x3) 17 AEG 5000W Diesel Generators Used condition with minor damage AEG 5000W Diesel Generators Generators (x3) AEG 5000W Diesel Generators Used condition with minor damage AEG 5000W Diesel Generators Used condition with minor damage 250,000 kms, broken transmission 1996 Toyota Camry 18 Coffee Machine Jura Z6 automatic. 6 months old 19 LG Fridge Near new, water/ice dispenser on the front, stainless steel, 450litre Samsung Microwave Approx 36 months old Stationary Office Fitout Leased Premises 600sqm block, large shed, secure fencing, could be utilised by another trucking company, storage/warehousing company
