Financial Accounting | Case Study Analysis

Running head: CASE STUDY ANALYSIS
CASE STUDY ANALYSIS
Name of Student
Name of the University
Author notes

CASE STUDY ANALYSIS1
Executive summary
The aim of this study is to observe the concepts of working capital, profits, cash flow as well
as evaluate how working capital impact the cash flow of a organization This study also notes
how how Mediterranean Delights Ltd could improve their cash flow using effective working
capital management. From the report, it can be perceived that MDL has huge debts and other
isuues which impacted their business therefore has been recommended that MDL should slow
down their accounts payable and collect its receivables early on. It can be perceived that the
working capital can be improved in other ways, which includes effective inventory
management, collecting outstanding invoices on time, and availing tax incentives. This report
also discusses the traditional budget system of Second Sight Plc and other alternatives budget
processes. The strengths and weaknesses of each budget process have been discussed in the
study. It has been found that from all of the budget processes, activity-based budgeting is
most effective yet costly process. It has been found that the activity-based budget system is
more effective for Second Sight Plc over the traditional budget system that it was following.
Activity-based budgeting should be implemented in the company to budget for their new
project effectively.

CASE STUDY ANALYSIS2
Table of Contents
Part 1..........................................................................................................................................3
Introduction................................................................................................................................3
i) Concepts and definitions.................................................................................................3
a) Profit and cash flow.....................................................................................................3
b) Working capital, inventory, receivables, and payables...............................................4
c) Working capital and cash flow....................................................................................5
ii) Application of concepts...................................................................................................5
iii) Analysis...........................................................................................................................6
Part 2..........................................................................................................................................7
Introduction................................................................................................................................7
i) Budget system.................................................................................................................7
Traditional budget..............................................................................................................8
Rolling budget....................................................................................................................9
Zero based budgeting.........................................................................................................9
Activity based budgeting......................................................................................................10
ii) Application of different budget methods......................................................................10
iii) Analysis.........................................................................................................................11
References................................................................................................................................12

CASE STUDY ANALYSIS3