Explanation of Management Accounting Information Used in Merlin Plc
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This presentation provides an explanation of the management accounting information used by Merlin Plc, including financial statements, budgets, variance analysis, and management information system (MIS). It also analyzes the use of this information in making business decisions within the company.
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FINANCE AND FUNDING TASK 2
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2.1 Explanation of various management accounting (MA) information which used in Merlin Plc Management accounting is the system by which various kind of internal business decisions are taken by the firm. Further, each and every kind of strategies also can be framed properly with the help of this particular accounting method to improve its performance. The information which used by the Merlin Entertainment Plc in the workplace related to management accounting are discussed below:
Financial statements The company prepares different types of financial accounts which is supportive to know its financial position at the end of fiscal year. In this basically four statements included which are like profit and loss account, balance sheet, statement of changes in shareholder's equity and cash flow statement. TheMerlin Entertainment usessuch management accounting method to assess its position and performance in the industry in terms of financials at the fiscal period ending. Moreover, profitability as well as liquidity position of the firm is also analysed properly with the use of P&L and balance sheet.
Budgets Other information of MA used by the selected firm is budget in which future financial data are estimated. Along with this, upcoming business performance in the TTMindustryisalsopredeterminedbythe management. Toframebudgetsinthecompany,pastfinancial accounts are taken as a base. Throughthismethod,MEPabletomakefuture strategies to meet with the agreed objectives and goals.
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Variance analysis The method in which two data i.e. expected and actual are once compared and then analysed is known as variance analysis. It is widely used approach of the management accounting by several companies for deriving its performance in the operating industry. Merlin company uses this information to know that whether it able to meet the estimated figures or not.
Management information system (MIS) Theframeworkwhichshowsreportsofthemanagement oriented to the company is known as management information system. This is used by cited enterprise in order to take those decisions which are related with the management of company. Further, it basically works for the middle level of managers and workforce in the firm. In addition to this, control on business management and make it smooth for achieving its objectives the MIS used by chosen company.
2.2 Analysing use of management accounting information in order to take business decisions within Merlin company Managementaccountingisoneofthebest supportingtoolforthebusinessorganisationin order to make effective business decisions. Further, decisions which are taken properly with the help of MA are stated below:
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Comparing with the data According to this, the values are compared in the company which are such as budgeted and actual. If the MEP firm able to meet with budgeted data at the end of year then it can be said that, company performs well in the tourism sector. Ontheotherside,ifthecompanyunabletomeetthe expected values then decisions for improvement are taken.
Investment decisions In the workplace different number of projects are available in order to undertake and make investments. Further,withthehelpofmanagement accounting, it can be properly decided that, whichprojectisthemostprofitablefor investment. Hence, decisions of investing money within MEP are easily taken by this.
Forecasting Under this, financial data estimated for the next accounting period after preparing budget statements. Wide range of values are forecasted at here which are like sales, cash, production, material etc. Onthebasisoftheestimationoffinancials,business decisions within Merlin firm made fruitfully.
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Current shortfalls When the financial statements are analysed by the Merlin Plc then it can know about its business performance. Moreover, problems and issues of financials are also highly assessed through management accounting information. Therefore,thoseshortfallsandobstaclescomeinto consideration like cost increasing, profit declining etc. easily determined. On the basis of this, further fruitful business decisions taken by the MEP management.
Raising capital From the cash flow statement analysis, the management of citedfirmcanknowlevelofcashpositionalongwith incomes and outflows at the fiscal period ending. If the company needs capital for further financial period then through cash flow analysis it can be known properly. If the management of MEP founds that, adequate cash is available at the workplace then will not raise fund. Hence, it can be said that, management accounting is used by the TTM enterprise for making decision of raise fund.
REFERENCES Ansart, S. and Monvoisin, V., 2017. The new monetary and financial initiatives: Finance regaining its position as servant oftheeconomy.ResearchinInternationalBusinessand Finance. 39. pp.750-760. Srivastava, V., 2017. Project finance bank loans and PPP funding in India: A risk management perspective.Journal of Banking Regulation. 18(1). pp.14-27. Ranaldo,A.andWrampelmeyer,J.,2016.Unsecuredand Secured Funding. University of St. Gallen, School of Finance.
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