(DOC) Assignment on Management Accounting - Desklib

Running head: ACCOUNTING FOR MANAGERS
Accounting for Managers
Name of the Student:
Name of the University:
Author’s Note:

ACCOUNTING FOR MANAGERS1
Table of Contents
Answer to question 1:......................................................................................................................2
Part a:...........................................................................................................................................2
Part b:...........................................................................................................................................3
Part c:...........................................................................................................................................5
Answer to question 2:......................................................................................................................5
Introduction..................................................................................................................................5
Discussion....................................................................................................................................5
Accountant’s proposal.............................................................................................................5
Production manager’s proposal...............................................................................................6
Sales manager’s proposal........................................................................................................6
Conclusion...................................................................................................................................6
Answer to question 3:......................................................................................................................7
Part a:...........................................................................................................................................7
Part b:...........................................................................................................................................7
Part c:...........................................................................................................................................7
Part d:...........................................................................................................................................8
Part e:...........................................................................................................................................8
References and bibliography:..........................................................................................................9

ACCOUNTING FOR MANAGERS2
Answer to question 1:
Financial statement of a company reveals the financial performance and financial
position of the company for a particular period of time. In the following parts the ratio analysis
tool have been applied as a means of financial statement analysis to interpret and understand the
liquidity and financial stability of the Grafton Pty Ltd.
Part a:

ACCOUNTING FOR MANAGERS3
Part b:
Liquidity means the ability of a company to pay off all of its short term obligation using
the readily convertible resources. In the above part, the current ratio of the company has been
computed as 1.06:1 for the year 2018 and 1.01:1 for the year 2019. The standard or the
benchmark for the current ratio is 2:1. Hence, the company is having a poor liquidity in both the
years in terms of current ratio. Though the industry average for the current ratio is also below the
standard, the company do have the liquidity up to that mark too. While the industry average is
1.70:1, the company is having its current ratio below the industry average in both the years 2018
and 2019 (Arif, T.M.H., Noor-E-Jannat and Anwar 2016).
Quick ratio is another measure of short term solvency or liquidity. It can be observed
from the above computations that, the company is having a quick ratio of 0.88:1 in the year 2018