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Advance Management Accounting - Assignment (Doc)

   

Added on  2021-01-02

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Advance ManagementAccounting

TABLE OF CONTENTSTable of Contents.............................................................................................................................2INTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Objective of financial information in respect to their shareholders.................................1P2: Different accounting microeconomic tools and techniques.............................................3M1: Benefits of using financial information which would be developed to support financialplanning..................................................................................................................................5D1: Evaluation of financial information that supported by effective judgement...................5TASK 2............................................................................................................................................5P3: Concept of variance analysis and importance for an organisation...................................5M2: Significance of large range of accounting techniques....................................................8D2: Application of accounting tools and techniques..............................................................8TASK 3............................................................................................................................................8P4: Analysis of actual and standard cost to manage variance................................................8M3: Analyse of measuring merits and demerit of types of variances..................................10D3: Implication of various changes and suggestion for upcoming communication............11TASK 4..........................................................................................................................................11P5: Some external and internal factors those are related with changing environment.........11M4: Analysing all impacts by using various types of changes............................................16CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17

INTRODUCTIONAdvance accounting is one of the primary tools and techniques which are needed to beimplemented by an organisation to control their financial operations in effective manner. It seemsto be utmost terms of formulating the flexibility structure of various companies. It is used totrack its day to day proceedings and doubled activities for carrying out operation managementaccounting tools of an organisation. It seems to be essential aspects for formulating theappropriate account reports that define planning in terms of short term and future decisionmaking of an organisation (Merchant, 2012). It seems to be effective aspects that define measure,communicate and make relevant data that would remain crucial in respect of making effectivedecision in coming period of time. This particular project is providing vital information aboutimportance of financial data in accordance to financial information for stakeholder. Apart fromthis, evaluation of financial information is being done in order to support effective planning anddecision making in coming period of time. Microeconomic aspects are being used to in thisparticular project to defined certain concepts such as costing and factors related with financialinformation clearly examine under this particular report.TASK 1P1: Objective of financial information in respect to their shareholdersIn every business organisation, information that remain connected with financial capitaland component that are associated with effective planning of company future. There are variousimportant aspects as well as measurement tools which will be taken into consideration in anorganisation in respect to overcome and reduce the financial issues and strategies those are notable to delivery well organise services. It is needed for every organisation in respect to presentfinancial information and their associated detail in such a manner so that stakeholder of anorganisation would be able to show and define planning in more effective or systematic manner.The stakeholder is an organisation can be associated in financial aspects of every businessperformance and administration (Laine, Paranko and Suomala, 2012). In accordance with this,they are more interested in how a company perform with all kind of implications that areaffecting their overall performances. The way in which financial data is being used and compliedinto financial statements is more difficult task for a user. Mainly internal stakeholder with havinginterest in financial information consists of manager, employees and other board of member.However, financial information which is being presented must be relevant in terms of defining1

the profitability, position and capital structure of an organisation. Financial information wouldremain important for various types of stakeholder in other sectors that are mentioned underneath:Investors: They are known as one of the primary part of an organisation on which futureof the company depends. There are various types of investors are available in business in respectof making valuable contribution in their financial resources. Investors used to put their capital inthat entire business plan whose position is much stronger as compare to other. Various types ofinformation are related to financial growth and analysis is taken into account by investors,shareholders and financial organization (Talha, Raja and Seetharaman, 2010). Some of thecrucial component that remains associated with analysing profitability and financial regulatoryare required to be taken into consideration. Evaluation of financial statements, data analysis,income statement and cash flow interpretation are categorised into this context.It has been found that different shareholders are accordance with this is being defined thefinancial data which would remain available in several perspectives. There are various groups ofinvestors that would remain associated with getting sufficient amount of gain for an organisationin coming period of time. Every analysis in terms of formulating the stages is determined asimportant aspect to gain maximum profitability for an organisation.Purpose and presentation: The primary objective of using the financial statementsby the investors is to analyse the equity which is especially important to investors thatshows changes in various elements. They used to analyse the changes and make investmentplan to earn maximum profits. All the future decision is based on the analysis done by theinvestors after making use of various statements such as income statement, balance sheetand cash flow.Senior management: This happens to be associated with internal stakeholder types.Every information associated with growth, sustainability as well as investment are necessaryfinancial matters those are used by senior managers of an organisation. It is the primaryresponsibility of management to make regular analysis of various data from operation level tomake valuable path during execution of planning (Kinney, Raiborn and Poznanski, 2011). Thisinformation would not only have accredited with manages to formulate financial strategies andinterpretation the best possible matters which are more reliable during the period of time. Withthe use of effective financial planning that aid manger to make effective decision regardingincrease their customer based by diversifying their business from zero to maximum. By the help2

of this, financial evaluation of business leaders and managers would be able to make reliable andharmonious relationship among stakeholder as well as company’s financiers. Although thisinformation will remain associated to make financial planning and deriving appropriate structurein more accurate manner.Purpose and presentation: For the managers, they used to determine the availability ofcash and other resources by the help of various statements. The purpose is to provide people withdata regarding the business so that corrective decisions can easily be taken into account at theright time.Some of them are creditors and debtors.Lender: It is one of the crucial matters that is presented in impressive and effectivefinancial data to lender is subject to reflect positive image of business in respect to variouslenders. This seems to more crucial part for getting financial assistance that would help fromlender and other financial institutions. It would provide effective analysis for repayment andredemption ability of an organisation (Mat and Smith, 2014). In accordance with analysing thefinancial information would have required to be repaid as per the current loan and advance takenby an organization. Through examine certain benefits and minimum interest rate loan for anorganisation must be maintain positive and negative credit score in respect of measuring thepositive aspect to get future financial assistance that are helpful from lenders.Purpose and presentation: It has been found that lenders are entirely relies on financialinformation to obtain critical data regarding the financial position and risk of businesses. Theyused to calculate ROE in order to determine the overall position of the company. P2: Different accounting microeconomic tools and techniques There are certain crucial principles of microeconomic aspects which assume that, if allother factors remain equal as the price of products increase during the time. It has been seen thatthe demand for that particular products or services gets decline drastically. It involves as allfactors of resources that are available and usage which will make impacts on an individual andvarious business (Ahmad, 2013). As company’s owner, understanding of core microeconomicfactors are more affecting their business which will be helpful in planning and formulation ofspecific strategies and other crucial aspects. There are various factors which are taken intoaccount in respect to management accounting techniques and their application is to assist theorganization overall growth and financial stability in coming period of time. In accordance tothat there are various accounting tools and techniques those are being used by managers in3

respect to examine strategies and tactics uses by organisations in respect to increase profitabilityposition of the company in near period of time. Some crucial accounting techniques arementioned under below:Cost accounting techniques: This seems to be one of the significant tools which wouldbe use by management to determine all those costs which are used during the time of productionprocess. These specific techniques used to consider all types of costing methods that are usefulfor an organization (Horngrenand et. al., 2010). Cost analysis is one of the major task that areassociated with determining overall cost of types which are incurred in production of product andservices for an organisation. Generally, all those cost which are directly related with theproduction process are take into account so that better outcomes can be attain in coming periodof time.Unit cost techniques: This accounting tools is also considering as one of the primarymanagement accounting techniques which would be determine the cost invested to a specificunits of product produced by the company. It is mostly helpful for small or mid size businesseswhich deals in minimum production. All the necessary aspect is taken into consideration whichwould remain with manufacturing of units. It is more vital for all managers and account officersto consider cost of every unit in order to make effective pricing and gain margin. It would behelpful to analyse the profitability aspects of an organisation (Fowler, 2011).ABC costing: This seems to be the most emerging cost accounting tools and techniqueswhich is used globally by the organisation in terms of evaluating the profitability aspects. Thereare various types of process and allocation of resources those are divided as per the priority andneed of functions as well as operations. Most of the accounting tools are used to make effectivedecision making in coming period of time. There are various types of activities those are moreeffectively followed in accordance with executing the plans in more specific manner. There aremainly five processes that define in this context like, cost of object, direct cost, overhead andallocation of base and other costs (Paisey and Paisey, 2010). Overhead costs are considered asassumption which will be used under these costing techniques.Price optimisation techniques: It is known as one of the major accounting techniquesthat contain the numerical analysis and techniques in respect to analyse various prices ofproducts which are being set by the company (Chandra, 2011). The main motive behind usingthese techniques is to determine customer point of views about all those prices which are fixed4

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