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Managing Financial Resources of Stortford Yachts Ltd : Report

   

Added on  2020-07-22

12 Pages2665 Words41 Views
MANAGING FINANCIALRESOURCES

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Difference between financial and management accounting...................................................1Purpose of various financial statements in a profit and non- profit organization..................2Identifying different group of stakeholders and evaluating their different informationrequirements...........................................................................................................................3TASK 2............................................................................................................................................6Analysing financial health of Stortford Yachts Ltd...............................................................6Report.....................................................................................................................................7RECOMMENDATIONS.................................................................................................................8CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10

INTRODUCTIONManagement and financial accounting reports are necessary for all the firms inorder to manage and control different operational activities effectively. The report willcover definition and difference between financial and management accounting.Financial requirements and funds are also explained in order to perform businessoperations effectively. Purpose of financial reports to profit and non-profit organisationsis also covered in this report. Stakeholder management and financial aspects in order togather capital funds to perform operational activities will be discussed here. Adiscussion over Stortford Yachts Ltd. is also covered associated with financial health.Effective cost management techniques in order to improve and develop financial healthas well as effectiveness of operational activities will be discussed in this report. TASK 1Difference between financial and management accountingFinancial accounting: Financial accounting system is concerned with the preparationof financial statements for parties such as shareholders, creditors, suppliers andcustomers effectively. Financial accounting provides financial information which will helpto take decision regarding financial activities within business (Amegbe and Adams,2016). It is based on different assumptions and principles such as realisation,consistency, matching and materiality as well as costs. Financial statements are madeat the end of year to evaluate profitability and performance.Management accounting: It is also known as managerial accounting and provideinformation regarding the cost or financial activities. It will also help Stortford Yachts Ltdmanagement to formulate strategies, policies and forecasting day to day operationalactivities. Qualitative and quantitative; both approaches are taken into the accounting ofmanagement accounting effectively. The information turns into a useful data whichhelps to take decisions regarding budget, goals, etc. It is made according to therequirements of management in weekly, monthly and quarterly manner.BASISFINANACIAL ACCOUNTINGMANAGEMENT ACCOUNTINGMeaningFinancial accounting is aprocess which focuses onManagement accounting providesuseful information to managers

preparing financial statementsfor Stortford Yachts Ltd in orderto provide information (Bower,2017).which will help to make policies,strategies and plans to runbusiness successfully.InformationMonetary information only.Non-monetary and monetaryinformation.ObjectivesIn order to provide financialinformation to outsiders.Better management planning andto make effective decisionregarding different businessoperational activities.Time frameStatements are prepared at theend of year in accountingperiod.Management reports are preparedas per the requirements andneeds.ReportsSummarize report of financialposition of Stortford Yachts Ltd.Detailed and complete informationregarding business operationalactivities.UsersExternal and internal parties.Internal management only.Financial and management accounting are the two different aspects that helporganisation in different ways. Financial accounting reserves complete informationabout financial activities within Stortford Yachts Ltd. Management accounting helps toanalyse the marketing strategy, performance and preparation of policies and plans inorder to make effective decisions.Purpose of various financial statements in a profit and non- profit organizationProfit organisation: Any business entity whose primary aim is to generate profit fromthe regular operations with a view to maximise the wealth of owners is called as a profitorganisation (De Paula, Arditi and Melhado, 2017). The profit earned by such entities iseither retained in business, for future contingencies, in the form of reserves ordistributed to the owners as the dividend.The structure of organisation can be a partnership, proprietorship, joint ventureor firm. Such trading concerns strive continuously for minimising expenses and

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