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Management Accounting || ACCT20077

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Accounting for Management Decision Making (ACCT20077)

   

Added on  2020-02-24

Management Accounting || ACCT20077

   

Accounting for Management Decision Making (ACCT20077)

   Added on 2020-02-24

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Management accounting
Management Accounting || ACCT20077_1
TABLE OF CONTENTSQuestion 1..................................................................................................................................3JB Hi- Fi.................................................................................................................................3Harvey Norman......................................................................................................................4Question 2..................................................................................................................................5Harvey Norman......................................................................................................................5Analysis of Cash Flow Statement......................................................................................5JB Hi- Fi.................................................................................................................................7Analysis of Cash Flow Statement......................................................................................7Question 3..................................................................................................................................8Part A.....................................................................................................................................8References..................................................................................................................................9Appendix..................................................................................................................................10Calculation of Ratios............................................................................................................10
Management Accounting || ACCT20077_2
QUESTION 1The direct method which is being applied for presenting a statement of cash flows representsspecified cash flows regarding the items which affect cash flow. The main advantage whichcan be attained through application of the direct method is that it reveals operating cash andreceipts. The same is not available in the indirect method. JB Hi- FiThe company has applied the direct method of cash flow statement in for presenting cashflows relating to the company in the annual report. Further, reconciliation statement regardingnet cash inflow from operating activities has been appropriately provided in the annual reportof the company.Figure 1: Reconciliation statement of net cash inflow from operating activities to profit(Source: Annual report of JB HI FI, 2016)
Management Accounting || ACCT20077_3
Harvey NormanHarvey Norman Holdings Ltd has also applied the direct method for presenting cash flowsrelating to operating, financing and investing activities in the annual report of the company.Further, reconciliation statement relating to cash and cash equivalents available at the end ofthe year as well as a reconciliation of profit after income tax to net operating cash flows hasbeen provided in an appropriate manner. It can be concluded that Harvey Norman Ltd haspresented the reconciliation in the more appropriate manner in comparison to JB Hi-Fi byproviding a reconciliation of cash and cash equivalents at the end of the year.Figure 2: Notes & Accounts of Cash Flow Statement
Management Accounting || ACCT20077_4

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