Answer To: Provide a brief overview of ABC Learning Centres (focusing on the nature of the operations, their...
Tanmoy answered on Nov 03 2021
Overview of ABC Learning Centres
Introduction
Nature of operation
ABC Learning Center is the largest child care provider in Australia. The ultimate function of ABC Learning is delivering day care facilities to millions of people in Australia’s. further, ABC Learning provides day-care facilities to the children with age between six weeks to pre-school age. They also provide education along with training facilities to the employees and nurses who takes care of the children in the day care facility. It is obligatory on the part of Board of Directors of ABC Learning Center to work for the best interest of the company. Further, the owner of ABC Learning Center named Zeynep Elgin illustrates of the values it provides to the children, their parents as well as the educators for the development of their future (Zeynep Elgin - ABC Learning Center, 2014). As per research conducted by SFDP it was found that the best care for the babies is found in the group or family day care settings and was alike the relationship between the infant-mother (Harrison & Ungerer 1997). Further, if the care provided by the center is poor, then the infants in the day-care facility becomes insecurely dependent on their mothers than being aligned to the home-care facilities (Sagi et al. 2002). The higher was the quality of childcare, the higher was the education and social achievements of the child (Early, D. M., Maxwell, K. L., Burchinal, M., Alva, S., Bender, R.H., Bryant, D., et al.; 2007)
Analysis
The business and the Inherent risks
Due to the various aspects of business strategy of ABC Learning Center, there was an increase in the business risk of the organization. This resulted in rapid expansion in the market share of ABC Learning, increase in the debt and high foreign investments. Further, there was rapid rise in the market share of the company. ABC with its 2200 centres in four countries were unable to manage the rapid growth due to its defective policy. The debt of ABC increased as they started to acquire the weaker and loss-making learning centres. As the risk of the company is increasing, there was enhanced risk with the present strategy where it required to pay for the business or was powerless to integrate it efficiently. The more contracts were signed by ABC, there was an increase in the debt. Therefore, it was the principal-based accounting standard which was much more beneficial for ABC Learning. This form of accounting is flexible according to the situation, it can reduce manipulation of the policies according to the financial statement and is close based on the actual performance of the company.
There were billions of dollars of discredited intangible assets which was a part of ABC’s Balance Sheet. The profits were heightened fast due to acquisitions and due to the huge intangibles, which was about 70% of its assets. Further, the inherent risk associated with the asset valuation was huge and as per Dr. Ross it is considered as a red flag. This meant that the balance sheet of ABC was weak. The company list of assets was around $4.5 billion of which $3 billion is associated with intangible assets. This...