Finance for Managers: Analysis of Financial Records, Accounting Systems, and Reporting Requirements

Running head: FINANCE FOR MANAGERS
Finance for Managers
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1FINANCE FOR MANAGERS
Table of Contents
Introduction:....................................................................................................................................3
Task 1:.............................................................................................................................................3
a) Purpose and requirements of a retail organisation maintaining financial records:..................3
b) Analysis of the techniques of using manual and computerised accounting systems:.............4
c) Analysis of the legal and organisational requirements for financial reporting in different
business organisations:................................................................................................................7
Task 2:.............................................................................................................................................8
Usefulness of financial statements to a range of stakeholder groups:.........................................8
Task 3:.............................................................................................................................................9
a) Analysis of the components of working capital for Al Hokair Fashion Retail using ratio
analysis:.......................................................................................................................................9
b) Techniques of effective management of working capital in the retail group:.......................11
Task 4:...........................................................................................................................................13
c) Difference between financial and management accounting:.................................................13
d) Steps in budgetary control process:.......................................................................................14
Task 5:...........................................................................................................................................16
a) Flexed budget, variances, reconciliation statement, break-even point and use of BEP for
Evergreen Plc:............................................................................................................................16
b) Classifications of cost, cost plus pricing, marginal cost and price takers:............................19

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c) Unit product cost under absorption costing method and variable/marginal costing method
for Navy Blue Plc:.....................................................................................................................20
Task 6:...........................................................................................................................................21
a) Analysis of the financial viability of the four projects:.........................................................21
b) Evaluation of the methods of investment appraisal and recommendation of the most
appropriate project to the Marketing Director:..........................................................................22
c) Internal and external sources of finance needed to fund the chosen project:........................23
Conclusion:....................................................................................................................................24
References:....................................................................................................................................25

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Introduction:
The current assignment is based on a scenario, in which the junior accountant of a retail
group is needed to provide some valuable financial information that would assist the regional
director of Finance in producing a leaflet. The main aim of producing a leaflet is to provide
information to few new board members as a part of the induction pack. The different financial
aspects and tools of management accounting would be covered in this paper like flexed budget,
variance analysis, reconciliation statement, break-even analysis, absorption costing and variable
or marginal costing. Finally, the assignment would shed light on evaluating the four different
projects by using the techniques of investment appraisal.
Task 1:
a) Purpose and requirements of a retail organisation maintaining financial records:
As a retail organisation, it is always crucial to remain organised. It would become
impossible for any business organisation, if it needs to look for paperwork along with important
files continuously (Atanasov and Black 2016). Maintaining financial records would help in
serving the purposes and requirements of the retail group, which are enumerated briefly as
follows:
Legal requirements:
According to these requirements, it is necessary for the owners to follow certain business
rules, regulations and laws for conducting their business operations. As commented by Collier
(2015), almost all business organisations have some kind of legal rulings and the retail group is
not an exception to this rule. There are some specific forms, licences as well as other

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documentations that need to be field with the local and the state government offices for carrying
out the business operations effectively. Such documentations for the retail group constitute of
shareholders, tax forms and payments. In the absence of these documentations, the retail
organisation would not be able to conduct its business operations.
Tax requirements:
For all types of business organisations, it is essential to pay tax and such payment relies
on the business structure, which is called tax requirement. For the retail group, the tax payment
depends on the amount of profit earned in a particular year, business quality and business type.
Internal control requirements:
In the words of Eiteman, Stonehill and Moffett (2016), internal controls could be
described as the policies, mechanisms and procedures utilised for minimising business risk. For
the retail group in order to restrict the staffs and other members from committing unfair acts, the
control needs to be broad. This would help the retail organisation to function effectively along
with accomplishing business goals and maintaining healthy relationships with all the business
staffs.
b) Analysis of the techniques of using manual and computerised accounting systems:
In order to ensure business growth and profit, it is crucial for the accountants to maintain
financial records or information. Some techniques to record financial information are
demonstrated briefly as follows:
Double entry book keeping:
This is an accounting procedure, in which each transaction is recorded as a debit and a
credit.

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Day books and ledgers:
The book maintaining an account of purchases and sales made in each day is termed as a
day book. For instance, day books prevalent in retail firms include sales day book, purchase day
book, sales return day book, purchase return day book and others. On the contrary, ledger is a
final entry accounting book, in which different accounts are used for listing different
transactions. For instance, ledger in the retail group includes purchase ledger, sales ledger and
general ledger.
Trial balance:
Trial balance denotes totalling the credit and debit balances to ensure that the total debit
amount is identical with the total credit amount. With the help of trial balance figure at the end of
the year, it would become possible for the retail group to prepare the balance sheet of the
organisation for representing the financial position at a particular period.
Manual accounting system:
Manual accounting system indicates those transactions that the organisations enter
manually for carrying out their business operations. This system contains high risk, as the
chances of making mistakes are high. Before computerised software and spreadsheets, the
accountants used paper pads printed with columns. The initial left column is generally narrow
and it is utilised for dates. On the other hand, the second column having the highest page width is
utilised for descriptions (Fields 2016). There are four or more columns in the accounting pads, in
which the double lines separate each column. These pads are printed in white stock or light green
having a space for each digit for reducing handwriting-related confusion. The pad lines signify
business transactions like inventory or sales transactions. For facilitating this system, journals are
used in specific purpose pads. For instance, when any sale takes places, it could be posted in the