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Financial Accounting & Management Analysis

   

Added on  2020-01-16

11 Pages3245 Words171 Views
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Managing FinancialResources
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Table of ContentsINTRODUCTION......................................................................................................................3TASK.........................................................................................................................................41.1 Differentiating legal requirements in the context of limited company and a non-limitedcompany.................................................................................................................................41.2 Explaining the importance of financial statements for business organization.................41.3 (a). Identifying various stakeholders of Metro Ltd..........................................................6b. Analyzing the influence of stakeholders on the options available to Metro Products Ltdfor expansion..........................................................................................................................7CONCLUSION..........................................................................................................................9REFERENCES.........................................................................................................................10
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INTRODUCTIONIn the business organization, management of financial resources is highly required toimplement the project plans or activities. Moreover, now firm places more emphasis onexpanding the business operations and functions. For this purpose, business organizationrequires enough funds for purchasing equipments and targeting more customers. Hence, bymaking proper management and monitoring of cash flows company can control onunnecessary spending. Continuous monitoring or review helps in assessing the deviations thattake place in financials and thereby helps in taking corrective action. The present report isbased on Metro Products Ltd which is one the leading British manufacturing company of UKin the sector of auto accessories. It offers or supplies high quality accessories through themeans of retail including Halford, Agros, A1 Motor and Motorworld outlet. The main focuson such study is to highlight the legal requirements which are associated with both limitedand non-limited companies. Besides this, it will provide understanding about the stakeholdersof Metro’s stakeholders and their influences. TASK1.1 Differentiating legal requirements in the context of limited company and a non-limitedcompanyThere is a significant differences take place between the limited and non-ltd businessorganizations in legal terms. In accordance with the given case situation, Metro Product ltd isthe private limited organization which was established by an entrepreneur. On the other side,companies in 51% stake held by government are known as public or non-Ltd firm. Hence,legal aspects which differentiate both the companies are as follows:Shareholders: Ltd companies can start venture with 2 people, whereas in the case ofpublic firm 50 shareholders are must. Legal formalities: Non-limited or public business unit has to follow specific rules andprocess. Hence, public firms are obliged to hold regular meeting and file report to registrar onregular basis (Lin and et.al., 2016). On the basis of this aspect, it can be stated that public unithas to follow strict norms and regulations. Unlike public companies, Metro Products Ltd isfree from such kind of obligations. Along with this, Metro Products Ltd must have 2 directors
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who will take strategic decisions regarding the business operations. On the contrary to this,in the case of non-limited companies must have 3 directors. Along with this, non-limitedcompanies are obliged to prepare and publish financial statements at the end of accountingyear. Further, it is compulsory for the firm to conduct audit of accounts at the end ofaccounting year. In contrast to this, ltd companies like Metro Product Ltd are not obliged todo the same in accordance with public firm. However, Metro Products Ltd prepares all thestatements with the aim to make evaluation of financial health and performance. This in turnenables them to develop sound framework for the near future (Zsidisin, 2016). Further, withthe aim to provide information to the investors and for developing faith among them MetroProducts Ltd publishes audited financial statements at the end of accounting year. Difference between management and financial accounts can be presented in the followingmanner:Objective: Management accounting or accounts provide high level of assistance tothe firm in setting and evaluating goals. On the other side, by practicing financial accountingsystem business unit can assess its financial condition in an effectual way (Finkler and et.al.,2016). Hence, by considering such aspect firm can develop sound financial framework.Focus: Managerial accounting places more emphasis on evaluating currentperformance and thereby helps in making proper forecast about near future (Management v/sfinancial accounting, 2017). Hence, by considering the outcome or variance analysis MetroProducts Ltd can frame suitable budget. In comparison to this, financial accounting placesemphasis on evaluating history and thereby assists in preparing reporting for the currentquarter or year.Rules and regulations: Managerial accounting reports are not the subject of legalrequirements. Hence, rules and regulations are not specific, so they are prepared and followedon the basis of the instructions of higher management. In comparison to this, financialaccounts are prepared by Metro Products Ltd in accordance with GAAP and IFRS. 1.2 Explaining the importance of financial statements for business organizationOn the basis of cited case situation, Metro Products Ltd is planning to expand itsbusiness operations and functions with the motive to enhance profit margin. In this regard, bymaking evaluation of financial statements firm can ass its current financial position andperformance in the following way:
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