Value of Management Accounting in Financial Management

Financial Management

Contents
INTRODUCTION.......................................................................................................................................4
SCENARIO A.............................................................................................................................................4
1. Evaluation range of approaches, techniques and factors contribute to effective decision making.......4
2. Stakeholder management and the management of conflicting objectives of various stakeholder
groups......................................................................................................................................................6
3. Value of management accountings in cost control and maximizing shareholder value.......................7
4. Techniques for fraud detection and prevention approach for ethical decision making.........................8
5. Reflection on understanding................................................................................................................9
SCENARIO B...........................................................................................................................................10
1. Data obtained that help to inform operational and strategic decisions...............................................10
2. Compare and contrast of three investment appraisal techniques that helps in maximize return on
investment.............................................................................................................................................12
3. Value of techniques helps in decision making procedure..................................................................17
4. Financial decision making supports long term sustainability.............................................................18
5. Make recommendations for management accountant supports for financial sustainability................18
CONCLUSION.........................................................................................................................................19
REFRENCES............................................................................................................................................20

INTRODUCTION
Financial management relates to appropriate and productive corporate finance (cash) to
meet the organizational mission. It is the unique role which is closely connected with upper
executives. The sense of this role is not only in the 'section' but is also in use in the total use of
the corporation's 'workers.' The distinct researchers in the field describe this separately. It leads
to strategic planning, organization, preparing and development of source of collecting within an
entity or institution. It also involves the application of management concepts to an organization's
financial assets, even while taking a huge portion in economic management (Albring, Elder and
Xu, 2018). The explanation is that even with good use of the resources, a corporation cannot
operate. It could even be suffering stunted growth. To recognize and implement the best business
strategies in the managing and utilization of funds, one needs to recognize how important a
company is in financial management. This report is based on the Tesco organisation that is
established in UK and conduct own supermarket. This report is mainly based on the value of
management accounting and their techniques in informing decision, increasing efficiency and
helping to assure for the long term sustainability and growth. This report contains two parts in
which analysis of various techniques that are useful for the business. Moreover, to analysis the
actual business situation calculate ratio of the company and analysis all the financial statements
that presents all the business operations effectively.
SCENARIO A
1. Evaluation range of approaches, techniques and factors contribute to effective decision making
Management think evolution is a phase that began in guy's initial periods. It started from
the time frame when man have seen the need for group living. The important people were able to
coordinate the people, to divide them into different classes. The exchange was undertaken in
keeping with the power, mental ability, and intellect of the people. To make the decision in any
business require to focusing on different aspects that are related with the business in direct as
well as indirect manner. For this require to focus on every activities and how useful it in the
business. There are identifying different approaches, techniques and factors of management that

utilize by the Tesco organisation to make decision in regard of any project investment (Junkus
and Berry, 2015). There are discussed various approaches such as:
Operational approach: This approach considers administration as an operation that is
focused on some specific managerial functions. Development is seen as a mechanism for doing
things by preparing, coordinating, and hiring, guiding and managing functions. It involves the
human and technological resource management cooperation (Blums and Weigand, 2017).
Communication center approach: This approach focus on management as a center that
receives, processes, and disseminates information, thereby underlining the importance of
communication in business administration.
Decision theory approach: The approach focuses on manager's decision-making role.
Accordingly, administrators’ primary emphasis is on decision-making. The significant
difficulties a manager faces are deciding what to accomplish, as well as how to actually
accomplish it. It concerns not just decision taking so everything that precedes a decision because
everything that accompanies it.
System approach: This approach treats a program as an organization. A system consists
of connected, interrelated components which form a unifying entire. Growing device is
composed of many subsystems. Likewise an institution is also considered in the form of agencies
as a scheme consisting of multiple sections although each dept is autonomous and achieves
particular predefined objectives, all are organized by upper executives.
Make and buy decision: A decision to make or purchase is a process of showing
between fabricating a product in-house or ordering it from an outsourced service. A make-or -
buy decision, also alluded to as an evaluation process, contrasts the costs and benefits with
manufacturing a desired product or service domestically with the health advantages related with
finding an external manufacturer for the systems needed. This approach helps to decision to take
right decision in regard of the business.
Limiting factor: Limiting variables contribute to limitations on the provision of
manufacturing services (e.g. labor requirements, labor hours or equipment) that prohibit a
company from optimizing its profits. If an company produces upwards of one item and

experiences a shortfall in the availability of a specific asset (e.g. work hours, manufacturing
overhead or a components) needed to produce its helps determine, what amounts of its multiple
brands should be manufactured to boost revenue. On the basis of these factors an organization
take right decision in regard of business activities.
These approaches are using by the management of Tesco to make crucial decision of
business. Along with also use of some techniques of management such as:
Break even analysis: This tool allows a decision-maker to assess the possible alternatives due to
price, total price, and variable cost. Break-even analysis is a metric by which you can assess the
amount of revenue forced to support all operating expenses (Bratten, Causholli and Omer, 2019).
Linear programming: Linear programming is a quantitative approach used when making a
decision. This requires creating an optimal distribution of an institution's limited or insufficient
resources to accomplish a specified target. The term 'linear' shows the results between the
various variables are roughly proportional.
Financial analysis: This decision-making method is utilizing to measure an investment manager
feasibility, to determine the cash flows (the average time for the money gains to compensate for
an investor's actual amount), and to evaluate net income and financing activities.
Ratio analysis: It is an administrative method for understanding knowledge related to
accounting. The correlation between the two parameters is defined by ratios. For a given period,
the rudimentary financial ratios try comparing costs and revenues. The aim of carrying out
accounting ratios is to analyze financial information to assess a firm's positives and negatives, as
well as its family history and existing fiscal status.
Many factors impact an employee or the management. Via boundaries stretching,
customers can monitor these considerations/climates a method of collecting knowledge about
changes that could affect the organization’s strategy (Choudhary, Merkley and Schipper, 2019).
2. Stakeholder management and the management of conflicting objectives of various stakeholder
groups
Stakeholder management requires share holder recognition, review of their preferences
and causes, implementation of improved approaches to collaborate with investors, and