Explanation of Management Accounting Information Used by Merlin Plc

This presentation explains the different kinds of management accounting information used by Merlin Plc, such as financial statements, budgets, variance analysis, MIS, and forecasting. It assesses the role of management accounting information as a tool for decision making within the company, discussing how it helps in resolving current issues, forecasting, setting benchmarks, raising capital, and making investment decisions. The presentation also highlights the different levels at which management accounting is used within Merlin Plc.

FINANCE AND
FUNDING
TASK 2

2.1 Explanation of various kinds of
management accounting information which
used by Merlin Plc
 In the firm several kinds of systems and information are
required to use as well as implement which support to make
effectual business decision.
 In regard to this, management accounting is one of the highly
used system which includes different information. Further, such
information of respective accounting are described as below:

Financial statements
 It is the tool in which information about the company in
terms of profit, expenses, liquidity etc. are included.
 Generally three financial accounts used by the Merlin
Entertainment Plc which are such as profit and loss (P&L),
cash flow as well as balance sheet.
 With the help of P&L account management of the firm
supportive in order to analyse its profitability situation along
with the expenses.
 Further, by considering cash flow and balance sheet cited
business can assess its liquidity and cash position respectively
at the end of year.

Budgets
 It is the technique of management accounting under
which data and information of the next year are to be
estimated at the current times.
 Budget of the Merlin Plc are made with the help of
taking base to the past financial performance.
 Those data of entity which forecasted through budget
are like sales, cash position, incomes, expenses,
production, material cost etc.

Variance analysis
 Other information which is used by cited entity is variance
where budgeted and actual, these two data are compared.
 Most of the firm adopt this kind of analysis in order to know
business performance which helps to make further strategies
for achieving financial objectives.
 When output is positive and negative the business performance
will be considered as favourable or adverse respectively.

Management information system (MIS)
 The tool which provides information about the company in
order to manage and control over the plan is known as
management information system.
 By taking support of this respective tool Merlin Plc take all
the management oriented information and data which helps
to make effectual business decisions.
 Further, in order to resolve business problems lower level of
managers and employees consider MIS system as it is
information processing tool.

Forecasting
 It is the method of management accounting under which
financial data and other required information are predetermined
by the company is known as forecasting.
 The Merlin Entertainment Plc used this particular technique or
tool in order to predetermine or estimate future incomes or
expenditures as well as the demand of the tour products in
further period.

2.2 Assessing management accounting
information as a tool of decision making within
Merlin Entertainment Plc
 At the working environment of Merlin Entertainment
Plc there are various number of problems and situations
come into consideration.
 Further, in order to resolve them and make business
environment highly better, some kinds of management
accounting information are undertaken by the Merlin
Plc.
 After taking base of such kinds of data it able to make
fruitful business decisions which are discussed below:

Current issues
 By analysing the financial performance like profitability and
liquidity, the company knows that due to which reasons
specific problem arise and resolve.
 Moreover, after making comparison of past and present
business performance Merlin Plc analysed current issues
faced by it.
 Those causes which lead to create obstacles, that can be
easily resolved and profitable business decisions can be
made which helps to enhance level of performance within
travel and tourism industry.

Forecasting
 With the help of budget section various kinds of data as well
as information are to be forecasted within workplace of
Merlin Plc.
 When data are estimated then management able to frame and
make effectual kind of strategies to meet with them.
 It helps to make decisions of cited company in terms of
financials which lead to increase revenue and profit at the
end of accounting year.
 It is one of the widely used due to giving clear scenario of
the next years in the current financial period.

Set benchmarks
 When the data are predetermined by management then
able to set standards and benchmarks in proper ways.
 By using this kind of data, Merlin Plc can make
business strategies in appropriate ways which supports
to achieve benchmarks and increase business
performance in highly effectual ways.
 The Merlin Plc use this for preparing better plan and
take profitable business decisions.

Raising capital
 At the time of introducing new project or product in the
company, fund or capital is widely required.
 Due to lack of money it is not possible to expand business and
requirement of raining capital is analysed with the help of
budget management accounting.
 Along with this, decision to use specific source in order to
raise fund from market is taken by using the information of
management accounting.
 Moreover, source of capital raining which can be used are like
bank loan, equity shares, government funding, European social
fund etc.

Investment decisions
 For taking decision that whether money has to invest in
particular project or not management accounting information
is highly supportive for Merlin Plc.
 In addition to this, the cited company using capital budgeting
techniques for make profitable business decisions.

Strategic Level
 At the strategic level, top management and executive
officers are included which are such as CEO, CFO etc.
 They take decisions for making investment in the
company and make modifications according to
requirement.
 Apart from this, Decision Support System (DSS) tool
is considered by the top level of management of the
Merlin Entertainment Plc.

Operational Level
 At this level, lower level of the employees included
who take business decisions of setting prices as well
as changing prices of the Merlin Entertainment firm's
tour products.
 Further, here Transaction Processing system (TPS) is
used by which financial transactions can be identified
or assessed.

Tactical Level
 At the tactical level, middle level of the managers and
employees involved who take decisions regarding to
the management and capital raising at the workplace
of Merlin Entertainment Plc.
 Moreover, they use Management Information System
(MIS) for making effectual management oriented
decisions.

REFERENCES
Drehmann, M. and Nikolaou, K., 2013. Funding
liquidity risk: definition and measurement. Journal of
Banking & Finance. 37(7). pp. 2173-2182.
Hall, C. M. and Page, S. J., 2014. The geography of
tourism and recreation: Environment, place and
space. Routledge.
Higgins, R. C., 2012. Analysis for financial
management. McGraw-Hill/Irwin.