Financial Analysis of an Organisation
Added on 2020-06-06
11 Pages3224 Words148 Views
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MANGING FINANCIALRESOURCES
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1a) Deviation between financial accounts and management accounts.....................................1b) Determine and purpose of different financial statements in an organisation.....................3C) Different group of stakeholders and analysing their crucial data......................................5TASK 2............................................................................................................................................6a) Analysing financial performance of Stortford Yachts Ltd by ratio analysis......................6b) Financial report to define financial performance of Stortford Yachts Ltd.........................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTION Better management ad effective operations depends upon adequate management offinancial resources (Broadbent and Cullen, 2012). Financial accounting is one of the branch ofmanagement accounting which assist the organisational structure for better management andoperation. This reports is prepared to define importance of financial management in managingfinancial resources. Diversification between management accounts and financial accountsexplained in this report. Significance of financial information for group of stakeholder oforganisation also discussed. Financial performance of Stortford Yachts Ltd analysed by usingratio analysis. A detailed report is prepared to defined in respect of profitability and liquidity alsoelaborated in organisational context.TASK 1a) Deviation between financial accounts and management accountsManagement accountsThese are the accounts which helps in decision making and strategic planning. These arethe part of managerial actions and activities which are organised to make effective growth anddevelopment strategies. Management accounts are prepared by accountants and managers subjectto analyse complex business situations and problems (Robb and Woodyard, 2011). It not onlyhelps to resolve critical business equations but also helps to sort out management plans foreffective decision making. Information which are produced under management accounts helpsmanagement accountants and managers.Financial accountsFinancial accounts are prepare by finance accountants in order to record day to dayfinancial transactions. Financial accounts are prepared on periodic basis. With the help offinancial accounts finance managers and accountants easily understand the financial dimensionsand prepare financial plans and strategies. Financial information and financial reports areprepared in the basis of financial accounts. These reports indicates towards financial strength andperformance of an organisation (Financial planning meaning and definition, 2017).Basic Financial accounts Management accountsDefinitionFinancial accounts are importantaspect subject to analyse financialperformance and growth of anManagement accounts defines themanagerial strength and capacity of anorganisation subject to dealing with1
organisation. These are the part offinancial planning.management challenges and complexsituations. These are the parts of decisionmaking process.ReportingpartiesFinancial reports, information,summarised financial informationare some essential detail remainessential for stakeholders oforganisation. These are also calledas reporting parties. Shareholders,buyers, suppliers, banks andfinancial institutions are consideredas stakeholders of organisation.Management accounts helps to analysethe internal strength and capacity oforganisation. Information and detailswhich are produced under managementaccounts remain important for internalparties of organisation. Managers, seniorauthorities, employees and employersare considered as internal parties of anentity.RegulatoryrequirementsPreparing financial accounts andkeeping financial information ismandatory for business andorganisations. There are somefinancial standards and rules madesubject to retain and recordfinancial records.There is no any specific regulatory andrules are made for managementaccounts. Organisation preparemanagement accounts for makinginternal management and operation forsmooth and flexible. Business entitiesadopt management accounts as persuitability and preferences.Output There are type of financial accountsare prepared by an organisationsuch as profit and loss account,income statements, cash floestatements, financial positionstatement and change in equitystatement.Management reports such job costreports, budget reports, inventoriesreports etc. all these reports helpsmanagers and accounts for makingdecision making process.MotiveAnalysing financial performanceand detecting financial requirementfor performing future tasks andprojects are main objectives ofAssisting managerial activities andfunctions for managing better andeffective management is one of the mainmotive of management accounts.2
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