Different Systems of Management Accounting Used by Merlin Entertainment Plc

This presentation discusses the different systems of management accounting used by Merlin Entertainment Plc, including financial statements, budgets, variance analysis, and management information system (MIS). It explains how these systems help in making fruitful business decisions, such as comparing with trends, forecasting, raising funds, and making investment decisions. The presentation also highlights the importance of management accounting in identifying present financial shortfalls. References are provided for further reading.

FINANCE AND
FUNDING
TASK 2

2.1 Describing different systems of management
accounting (MA) which considered by Merlin
Entertainment Plc
Introduction
 Management accounting is an approach considered by the firms where
financial plan is made along with monitoring and controlling.
 The present task shows those systems of management accounting which
used by Merlin Entertainment Plc at its workplace. Apart from this,
proper explanation of such systems is also given in the current task.
 Basic systems of MA used by MEP are like financial statements, budgets,
variance analysis and MIS.

CONTD....
 Further, key purpose of MA considering this particular aspect in the
workplace is take an effective kind of internal business decisions.
 The MA comprises with wide range of factors like budgeting,
planning, forecasting, analysing etc. and systems which are used by
the TTM firm. Moreover, such systems of MA adopted by Merlin
Entertainment Plc are explained below:

Financial statements
 In the firm different types of financial statements prepared which
helps to know its level of performance in the industry.
 Using the MA, some small reports are made by the accountants
which lead to make final accounts such as profit and loss, cash
flows, balance sheet etc (Groot and Selto, 2013).
 The MEP firm adopted this system for tracking and analysing
profit and cash position at the end of an accounting period.
 In addition to this, it used for framing strategies at the workplace
in order to meet desired objectives in proper time frame.
 For example:

Budgets
 A statement which reflects performance of the company regarding to
financials for the upcoming fiscal year, called as budget.
 It is used by MEP organisation in order to forecast as well as
estimate different financial information of the company.
 Further, data predetermined using budgets include sales, material
purchasing, revenue, inflows, payments, cash balance, production,
direct labour overhead etc (Hald and Thrane, 2016). Different types
of budgets prepared by Merlin PLC are like cash, sales, material and
production budget.
 It is supportive to make effective strategies by considering future
performance and meet agreed purposes of the whole entity.

Variance analysis
 A method through which performance of MEP is tracked by
comparing expected and actual data incurred within workplace is
known as variance analysis.
 On the basis of this an entity can frame tactics and schedules for
enhance the performance. Furthermore, expected data if not achieved
by MEP then causes behind this are also easily tracked by the
management.
Hence, it is an effective aspect of MA which is used by the firm of TMM
sector and analyse its level in relevant market (Joshi and Li, 2016).
 For example: budgeted sales is 15000 GBP and actual sales is 13000
GBP then variance will be -2000. Therefore, MEP not able to perform
well in the next financial year.

Management information system (MIS)
 A system of MA i.e. Management Information System in which different
information related to the financial and non-financial are recorded in proper
way is called MIS.
 It is an approach considered by employees of middle and low level in the
firm. Further, it is one of the computerised system where wide range of
management oriented reports are generated.
In this, all the important records are managed arranged in a proper structure. Apart
from this, MIS system is used by top level of managers also in the working
place for taking key business decisions (Khodzytska and Ivchenko, 2014).
 The MEP company uses in the workplace for obtaining reports and track the
business requirements.
 For instance: when whole sales and cost data required to track then
management will use this system.

CONCLUSION
 It can be concluded from the current task that Merlin
Entertainment Plc company uses basically four
systems which are associated in management
accounting.
 Further, such systems are like financial statements,
variance analysis, budget and management
information system.

2.2 Explaining ways through which management
accounting helps to Merlin Entertainment for
taking fruitful business decisions
Introduction
 Various systems of MA are used to make effectual business decisions for
internal aspect rather than external environment.
 Merlin Entertainment Plc considers such systems to make investment
decisions and present financial issues incurred in the workplace.
 Apart from this, in order to compare with current trend, forecast financial
data and raise fund, systems of MA used by MEP firm.

CONTD....
 In the above section, different kinds of systems are explained which are
undertaken by Merlin Entertainment Plc in the workplace.
 Apart from this, these help to make an effective kind of decision
through which firm able to boost up sales.
 It not comprises with non financial aspect of the working environment
arisen. It looks upon only financial data and frame strategies to meet
goals framed like increasing profit, sales, decline cost etc (Kotas,
2014).
 The above mentioned systems are used in different methods for making
business decisions in fruitful manner. Further, such ways are described
appropriately below:

Comparing with trends
 The systems of management accounting are used to compare present and
past trend of the company in terms of performance.
 Apart from this, it can be easily assessed that MEP is up to which level
performs well or poor in the market in terms of raising sales.
 From the comparison, if it has been found that present performance is poor
than past, then decisions for raising it can be taken.
 Further, it clearly gives outline of causes or reasons due to which condition
of sales and profitability declining arisen in the working environment
(Cooper, Ezzamel and Qu, 2017).
 Hence, for making an effective comparison and take corrective actions the
MA is a useful tool.
 For example: in the past it generates 12500 GBP sales and wants to
compare with current sales then system of MA used.

Forecasting
 The management accounting consists with budgets which help to
known future financial data in proper direction.
 Due to which information is forecasted by the MEP which shows that
in next period the firm will generate receipts up to which extent.
 If the condition or cash balance goes in adverse direction in upcoming
year then strategies in accordance to that are made by company.
 Moreover, this approach is used to estimate the future data and make
corrective actions if required (Figge and Hahn, 2013).
 However, sometimes it creates high level of financial burden on the
business. The reason is that, budgeting procedure is little expensive and
takes more time for executing as well as achieving targeted
benchmarks.

Raising fund
 On the basis of various systems of MA the company able to assess
position of cash or liquid availability in the workplace.
 Base through which this particular aspect can be determined is cash
flows and cash budget prepared in the firm.
 During this, if it has been found that at the end of FY cash is available
at the very low proportion then decision to raise capital is made
(Fullerton, Kennedy and Widener, 2013).
 Along with this, sources available with the Merlin Entertainment in
terms of internal and external are evaluated.
 Therefore, it can be also decided through MA that which one funding
source will be highly suitable as well as profitable for enterprise.

Investment decisions
 For an organisation decision to make an investment in profitable manner is
highly pivotal or important. The reason is that if money invested in wrong
project or criteria then create highly negative impact on returns.
 Each company concerns that, investment will provide higher level of return
at the end of year.
 If there are two or more projects available then by comparing with the help
of capital budgeting tools, Merlin Entertainment Plc can take better
decisions (Hiebl, 2014).
 Apart from this, using costs, risks and return aspects of investment
alternatives the MEP able to known highly profitable criteria.
 Hence, it can be said that management accounting is used by selected firm
of TTM for taking effectual investment decisions.

Present financial shortfalls
 As per the above discussion, MA's systems are
implemented for comparing financial statements
of the company.
 On the basis of this, present issues occurred in
terms of financial aspects are assessed along
with the reasons.
 If the condition is in unfavourable of the MEP
enterprise then proper tactics can be made as
well as executed (Kaplan and Atkinson, 2015).
 Therefore, for assessing as well as presenting
different shortfalls of financials MA is
undertaken by the chosen organisation

CONCLUSION
 It can be concluded that, with the help of systems of MA
the MEP makes wide range of effectual business
decisions internally.
 Further, for making investment decisions, raising fund
and comparing with current trend MEP uses such
systems.
 Along with this, for presenting financial issues as well as
estimate or forecast financial information also systems of
MA are supportive to Merlin Entertainment Plc.

REFERENCES
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accounting idea: The case of the balanced scorecard. Contemporary Accounting
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Figge, F. and Hahn, T., 2013. Value drivers of corporate eco-efficiency:
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Fullerton, R. R., Kennedy, F. A. and Widener, S. K., 2013. Management
accounting and control practices in a lean manufacturing environment.
Accounting, Organizations and Society. 38(1). pp. 50-71.
Hiebl, M. R., 2014. Upper echelons theory in management accounting and control
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Kaplan, R. S. and Atkinson, A. A., 2015. Advanced management accounting. PHI
Learning.

CONTD....
Groot, T. and Selto, F., 2013. Advanced management accounting. Pearson Higher
Ed.
Hald, K. S. and Thrane, S., 2016. Management Accounting and Supply Chain
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Khodzytska, V. and Ivchenko, L., 2014. Strategic Management Accounting
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Kotas, R., 2014. Management accounting for hotels and restaurants. Routledge.

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