Difference Between Management and Financial Accounting
Added on 2021-02-19
13 Pages3204 Words117 Views
|
|
|
Financial Resources
EXECUTIVE SUMMARYThe following report is based upon a small production company Swipe Wire which isplanning for expansion. For the purpose of analysis management and financial accountingtechniques with their difference and respective users are discussed in this project. With the helpof different capital budgeting techniques such as NPV, ARR, IRR etc. the organisation can makeinvestment in best option. In order to evaluate performance of the company different ratios arecalculated in present report. The enterprise is recommended to formulate strategies for utilisingexternal sources more than internal funds for business execution so that debt ratio could beincreased.
Table of ContentsEXECUTIVE SUMMARY.............................................................................................................2INTRODUCTION...........................................................................................................................1QUESTION 1...................................................................................................................................1Explanation of management and financial accounting................................................................1Difference between management and financial accounting with respective users......................1QUESTION2....................................................................................................................................2Cost benefit analysis....................................................................................................................2Payback period.............................................................................................................................3Accounting rate of return.............................................................................................................4Net present value and internal rate of return................................................................................5Analysis and conclusion..............................................................................................................6QUESTION 3...................................................................................................................................7Calculation of ratios.....................................................................................................................7Comparison of ratios....................................................................................................................8Suggestions for improvement......................................................................................................9CONCLUSION................................................................................................................................9REFRENCES.................................................................................................................................10
INTRODUCTIONFinancial resources can be defined as the funds which are required by all theorganisations to execute all the operational activities in systematic manner. If an enterprise is nothaving sufficient finance to conduct business processes then it will be difficult for it to reachpredetermined organisation (Anselmi, Lagarde and Hanson, 2014). This report is based upon theentity Swipe Wire which is a small production company and set up by James. Currently theorganisation is planning for expansion and incorporation of the business. This assignment coversvarious topics such as management and financial accounting, their functions, respective user,differences, calculation of payback period, NPV, IRR, ARR etc. Along with this, in order todetermine performance of the business different ratios are also calculated. QUESTION 1Explanation of management and financial accountingManagement accounting: It can be defined as the process of monitoring, analysing,evaluating and controlling organisational processes so that strategic decisions could beformulated according to actual situation of business. Main purpose of it is to determine that theoperational activities which were performed by company in a specific time period are resultingpositively or negatively. In Swipe Wire it is conducted every year to determine that the planwhich were formulated are being executed properly or not. It's primary function is to assistmanaging officials in planning, controlling, organising and decision-making.Financial accounting: The process which is followed by business entities to formulatefinal accounts such as income statement, balance sheet and cash flow statement is known asfinancial accounting. It helps to analyse that organisation is able to meet the finance relatedobjectives or not. Financial analyst of Swipe Wire focuses on it to evaluate financial status of thecompany and formulate strategic decisions for future (Guerra, Magni and Stefanini, 2014). It'score function is recording, summarising, classifying, communicating and interpreting financialdata. Difference between management and financial accounting with respective usersDifference between financial and management accounting:BasisManagement accountingFinancial accountingDefinitionThe process which is followed byIt is the technique which is focused by1
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Financial Resources: Management and Financial Accounting, Capital Budgeting Techniques, and Financial Ratioslg...
|14
|2581
|68
Financial Planning and Resource Utilization for Samsung Electronics Co Ltdlg...
|19
|4967
|2518
Managing Financial Resources and Decisionslg...
|26
|5014
|487
Capital Markets & Unlevered Firm Valuelg...
|9
|1404
|95
Investment Appraisal Metrics and Machine Selection for Financial Feasibilitylg...
|8
|1657
|300
Investment Appraisal Techniques: Payback Period, NPV, ARR, IRRlg...
|29
|1953
|20