Environmental Accounting and Financial Management Practices in Morrison plc

Financial Performance
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Part 1............................................................................................................................................3
Part 2............................................................................................................................................6
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Environmental accounting may be described as the correct distribution of capital in such a way
as to help increase the sustainability of the people. The project study is based on 2 distinct
assignments in first task and includes data on environmental expenditures and financial reporting
(Sroufe and Gopalakrishna-Remani, 2019). In the second task, the importance of various
financial management practices is stated in order to solve problems. A business that is Morrison
plc has been chosen to help grasp mission one & two. It is a company that is well known in the
United Kingdom that specialises in the retail sector and has gained a significant market share
thanks to its comprehensive activities. The study deals in depth with issues relating to
environmental management accounting, its expenses, the methods used and their significance
and the mechanism by which they are defined, tracked and accountable for. Apart from this the
report also covers topics such as importance of decision making, planning tools, budgetary
controls that are related to the above aspect. Further KPI role in improving financial performance
is also discussed with the financial stability that a business can gain through it is also discussed
in this report.
MAIN BODY
Part 1
Environmental accounting is a branch of full valuation, with the goal of incorporating both
financial and ecological knowledge (Pantea, Gligor and Anis, 2014). Via the Structured
Environmental and Commercial Accounting System, a parabolic antenna to the National
Accounts of Countries, this can be carried out at the business level or at the expense of national
economy (among other factors, the National Accounts provide figures of the gross domestic
product, commonly recognized as GDP).
Environmental accounting is a sector that describes the utilisation of energy, calculates and
discusses the costs of the environmental effect of a business or national financial consequences.
Costs cover the cost of washing up or fixing polluted areas, environmental fines, fees and
taxation, the procurement of technology to deter contamination and the cost of waste disposal
(Gartenberg, Prat and Serafeim, 2019). In the context of Morrison plc, this type of cost occurs in
various kinds of operations and activities. There are a range of environmental costs and some of
them are explained below in such manner:

 Prevention cost- Instead of finding and eliminating it becomes much useful to hide
failures from products (Albertini, 2013). Fixed expenses are firstly known also as prices
incurred in order to reduce potential the number of mistakes. Development systems
upgrades, staff preparation, production innovation, predictive process management etc.
are some indicators of avoidance costs.
 Appraisal cost-Cost of assessment (also expense of testing) is the cost incurred to
customers to locate damaged products before sale. This organization also advocates for
the maintenance of acceptable quality standards throughout all costs relevant to the
functions assigned in manufacturing cycles. In order to retain a team of investigators,
faulty products are found. For certain organisations, it can be very expensive.
 External failure cost- External loss costs occur where faulty goods have been delivered to
consumers (Yu and Huo, 2019). External costs of loss include warranties, substitutions,
missed revenue due to poor credibility, payment for losses resulting from the use of
faulty goods, etc. Customers may be unhappy with the shipping of faulty goods, harm
goodwill, and decrease revenue and earnings. These kinds of costs are not controlled by
Morrison plc as well as these costs can occur at any time.
 Internal failure cost- Internal fault cost is the cost which is accrued before delivering
them to consumers to remove faults from the goods. Rolled, rejected items, scrap, etc. are
instances of internal failure costs. In Morrison plc, this cost occurs because of internal
failure and it leads to negative impact on their profitability.
Cost-benefit analysis: A cost-benefit assessment is a method of assessing business decisions. The
organisation or consultant summarises the benefit of a situation or judgement and subtracts the
cost of operation. Any analysis or consultant also creates models to offer a monetary value to
abstract items, like costs and rewards relative to living in one place (Mojambo, Tulung and
Saerang, 2020). In relation to above mentioned company, this is used in order to assess number
of units that need to be produced to meet no loss no profit line. By help of this analysis, it
becomes easier for companies to protect from losses and they become able to cover cost of
operations.