Financial Analysis of Storeford Organization

This assignment delves into the differences between management and financial accounting, highlighting the importance of financial statements for both profitable and non-profit organizations. It examines various financial ratios within Storeford Organization from 2015 to 2016, interpreting its performance and profitability. The analysis also identifies key stakeholders and their information needs regarding the organization's financial health.

MANAGING FINANCIAL
RESOURCES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P.1. Explain the difference between financial accounts and management accounts...................1
P.2.Identify and explain the purpose of various financial statements in a profit and non-profit
organisations...............................................................................................................................2
P.3. Identify the various groups of stakeholders and evaluate their different information needs
.....................................................................................................................................................3
P.2. Presenting the reports which determine the financial performance of business..................6

INTRODUCTION
In this documentation, this assignment review about difference between management
accounting and financial accounting effectively. Furthermore, this study also define explanation
of the purpose of various financial statements in profit and non-profit organisation in the industry
effectively. Moreover, this study refer to identification of group of stakeholder and evaluation of
their information needs in the industry properly. This study also analyse about several ratios of
Storeford organisation which shows its profitability and performance from the year 2015 to
2016. This study also define about Stratford Yachts Ltd. Organisation's financial ration
interpretation and appropriate suggestions by which they can improve their performance in the
industry and increase the performance of the business as well.
TASK 1
P.1. Explain the difference between financial accounts and management accounts
The following are major differences between financial accounts and management
accounts:
Accounting is majorly process of recording, classifying and summarising in monetary
terms. In the accounts of an organisation, the business transaction and events of the business is
recorded in the business effectively.
Management accounts Financial accounts Management accounting refer to the
system in which appropriate
information is to be managed to
formulate policies, plans and strategy
for operating the business activities
efficiently.
 Management accounting almost always
reports at a more detailed level like
profitability of products, products line,
customers etc.
 Management accounting does not
 Financial accounts is an accounting
process which has major focus on
formulation of financial statements in
the organisation effectively and
organisation to furnish the financial
data to the interested parties in the
organisation effectively (Robb and
Woodyard, 2011).
 Financial accounting reports on the
results of the whole business.
1

follow specified format in the
organisation in terms of preparation of
this kind of accounts at the workplace.
 Management accounting is prepared at
the workplace according to demand of
this report preparation at the workplace
effectively.
 Management accounting refer to the
analysis of information of the company
which is related to the monetary and
non-monetary data of the company
effectively.
 Management accounting have user of
only internal management team.
 Financial accounting has specified
format in order to formulation it at the
workplace.
 It has a limited time period, financial
statements of the company is equipped
at the end of accounting time period of
the company effectively. This may be
usually for one year.
 Financial accounts refer to the
information only which is related to the
monetary terms of the company.
 Financial accounting has some users of
internal and external parties of the
organisation in order to formation of
this accounting.
P.2.Identify and explain the purpose of various financial statements in a profit and non-profit
organisations
Financial statements are very essential part of each profitable and non-profitable
organisation in the industry effectively. The basic aim of this management accounting process is
furnished appropriate information about to outcomes of operation, cash flow and financial
positioning of the company in the industry effectively. The financial statements' information
assist the business accountant in order to allocation of proper resources in the firm effectively.
The income statements of the organisation furnish appropriate financial information of the
organisation which defines about capability of the business in respect of generation of
profitability in the business effectively (Aizenman and Pinto, 2013). Apart from it. The major
purpose of the financial statements in Stanford Yachts Ltd. To reveals about to the sales and
revenue volume of the company towards their accountant at the workplace. The income
statements of the company could be utilised the rends of the results of the organisation at the
operational level efficiently. The major purpose of financial statements in profit and non-profit
2

organisation is that, this could be used for credit decision of the company effectively. Imparts
utilise the whole set of the financial information of the organisation to ascertain whether they
must enhance credit to the entity or restrict amount of the organisation already extended in the
company effectively. These statements also could be used for the organisation in order to making
decision towards the company which could five more effective return in the industry in more
efficient manner. Investor of the profitable and non-profitable organisation's use appropriate data
to make decision to when invest the price of per share in the company in which they want to
invest in the industry effectively (Morino, 2011). These informations also could be used by the
business professionals in context of making decision to about taxation of the company
appropriately. The government of the country also give taxation policies to corporate according
to assets and revenue of the organisation and this also generates financial information in the
enterprise effectively.
P.3. Identify the various groups of stakeholders and evaluate their different information needs
Variety of stakeholders group can find out here, which has different-different role play in
the industry and they need different information needs in order to sustain the organisation in the
industry in more effective manner.
Project management stakeholders: This category stakeholders are these stakeholders
which includes the company's major project effectively and they have highly interest in the
succession of projection of the company in the industry effectively. Stanford Yachts Ltd (Goux,
Rise Above Tech LLC, 2010). Must need to recognised their effective project management
stakeholders which is essential for the process being development in the healthy relationship of
employees at the workplace. They ned to figure out how the project function are functioning at
the workplace effectively.
Major project management stakeholder are:
 project manager
 project team
 functional management
Primary and secondary stakeholders: Primary stakeholder have major focus on
succession of the projection in the company in more effective manner, because they are directly
get affected with the outcomes of projection in the industry efficiently (Allen, 2012.). Customers
and end uses of the organisational product and services are the primary stakeholders of the entity
3

and some project sponsor and manager and team member are also comes in this category.
Project sponsors are liable for the overall succession and get to the vision of project in the
company effectively. They need information of feedback in order to making decision concerning
to the project implementation in the business efficiently. They also make sure that, project
manager are making major focus in the each task of the projection effectively. Secondary
stakeholders of the company is clients, competitors, vendors, government and media and they
also need important in formulation in order to make great impact on the performance of the
organisation in the industry effectively.
TASK 2
P.4. Calculation of following
4

Some calculation of rations as following:
Return on capital employed: This is a profitable ration which could be used for
identification of profitable generation of the company effectively by making comparison
between net operation profit to capital employed of the business (Cañibano, 2017.).
Return on capital employed: Net operating profit / Employed capital
Stanford Yachts Ltd. Company's ROCE in 2015 is = 27.9
Stanford Yachts Ltd. Company's ROCE in 2016 is = 22.5
From this analysis it could be said that the company effective assets are not properly
performing as they have been performed in 2015.
 Assets turnover ratio: This formula could be used for measuring the company's ability to
generation of sales from its effective assets through making comparison from net sales to
average total assets of the company effectively.
Assets turnover ratio= Net sales / Average Total assets
Assets turnover ratio of company in 2015 is = 1.70
Assets turnover ratio of company in 2016 is = 1.90 Net profit margin: This is also a term which could be used for analysing of ration of the
business financial performance effectively (Elsom, 2014). With the help of this
technique, professional of the company can identify the proportion of profitability within
the business effectively.
Net profit margin = Net income /Sales
Net profit margin of the organisation in 2015 is = 16.4
Net profit margin of the organisation in 2016 is = 11.8
5

 Current ration: This the combination of liquidity and efficient ratio that can be used for
measuring the organisation's ability to yield its short-term responsibility with its current
assets in the company effectively (Johnson, 2016).
Current ration = Current assets / current liabilities
Current ration of the company in 2015 is= 1.22:1
Current ration of the company in 2016 is= 1.3:1
 Acid test ratio= total current assets- inventor- prepaid expenses / current liabilities
Acid test ratio of the company in 2015= 0.87:1
Acid test ratio of the company in 2016 is= 0.99:1
P.2. Presenting the reports which determine the financial performance of business
From: Assistant business planing consultant
To: Business Planning Assistant
Subject: Storeford Yachts Ltd- Accounts information
As per my above all ration analysis of the business entity during the given financial year of
2015 and 2016. From the above analysis of financial ratios of the company, t has been seen that
various changes has been occurred from the year 2015 to 2016 effectively (Petrick, 2017). It
could be seen that, the organisation also have earned high range of profitability in these years
and also get appropriate growth in the industry effectively as well. With the assistance of
various ratio analysis formulas, it is analysed that the organisation will have over the applied
period in which is called capital of the business as well. For instance, it could be seen that cost
playing for the administration was 2015 is 27.9 and this figure shows in 2015 was 22.5 which is
a favourable positioning of the company. This data shows that the company is performing well
in these areas and making relevant profitability and giving appropriate pay scales to its
stakeholders in returns of their investment in the organisation from last year to next year
effectively. Apart from it. In case of debtor aggregation period of the company, it was 91 in
2015 and it has been changes in next year and reached to the 102 in the year 2016. Which is a
valuable growth of figures in the organisation. This information regarding to their debtors
shows that, they have been not well performed in the last year in order to recover the payments
of the all debtors of the company effectively (DeAddio and Kramer J P Morgan Chase Bank,
2014).
Hence, according to the analysis of all financial ratios of the company, it could be seen that in
6

operation cost of the company in 2015 was 83.5 and after the one year, it has been reached to
88.2 which is a favourable value according to the industry average value which is 85.5%. The
company operating cost in also performed well in the organisation in order to achieve success in
the industry from the last year to current year effectively.
RECOMMENDATIONS:
From the above analysis, it is suggested to the company managerial professionals about
to the company., they need to utilisation of innovative and effective techniques at the workplace
in order to make improvement in the services of the business entity effectively in the industry.
Therefore, the company will be bale to generate more profitability in the organisation in effective
manner (.Winch, 2010). Apart from it, the company is also generating sufficient profits from the
market, it can be measure by above ration analysis effectively, which is, they have managed the
ration between the demand and supply of the production of the organisation and they have also
assigned relevant costing to each production level in the company effectively which gives them
proper outcomes from the industry. Managerial professional of the company need to make use of
management accounting approach at the workplace in order to reduce the cost of manufacturing
products in the company effectively. This activity reflects the business entity in respect to
profitability increment in the industry properly. The Storeford organisation have specific
numbers of stakeholders which invest in the entity on its profitable section of the business, which
assist the organisation in order to generation of more profit in the market effectively.
CONCLUSION
From the above analysis, it is concluded about differential between management
accounting and financial accounting effectively. Moreover, this study also concludes about
importance of financial statements for profit and non-profitable organisation effectively.
Identification of several groups of stakeholders and also evaluate their different information
needs in the company effectively. Apart from it, this assignment concludes about to the analysis
of various ration in Storeford organisation and interpretation of its financial performance from
2015 to 2016 efficiently.
7

REFERENCES
Books and Journals
Robb, C. A. and Woodyard, A., 2011. Financial knowledge and best practice behavior.
Aizenman, J. and Pinto, B., 2013. Managing Financial Integration and Capital Mobility—Policy
lessons from the past two decades. Review of International Economics. 21. 4. pp. 636-653.
Morino, M., 2011. Leap of reason: Managing to outcomes in an era of scarcity. Innovations:
Technology, Governance, Globalization. 6. 3. pp. 167-177.
Allen, S., 2012. Financial risk management: a practitioner's guide to managing market and
credit risk (Vol. 721). John Wiley & Sons.
Cañibano, L., 2017. Accounting and intangibles.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Petrick, J., 2017. Total quality in managing human resources. Routledge.
DeAddio, M. L. and Kramer, A., JP Morgan Chase Bank, 2014. Object oriented system for
managing complex financial instruments. U. S. Patent 8,732,049.
Winch, G.M., 2010. Managing construction projects. John Wiley & Sons.
Elsom, D., 2014. Smog alert: managing urban air quality. Routledge.
Goux, T. G., Rise Above Tech LLC, 2010. Method and system for managing healthcare facility
resources. U.S. Patent 7,657,445.
8