Management Accounting Report: BRIGHTSTAR Company Financial Analysis

This report provides a comprehensive overview of management accounting, focusing on its application within the financial services sector, specifically using BRIGHTSTAR company as a case study. It begins with an introduction to management accounting systems, including their types, benefits, and application in an organizational context. The report then delves into various costing methods, such as cost accounting, actual costing, normal costing, standard costing, price optimization, inventory management, and job costing systems, along with an example of net profitability calculation. Furthermore, the report examines different planning tools used for budgetary control, discussing their advantages and disadvantages. It also explores how organizations adapt management accounting systems to respond to financial problems, highlighting planning tools and strategies to resolve financial issues and achieve sustainable success. The report emphasizes the importance of management accounting in making effective decisions, preparing suitable reports, and ensuring smooth business operations. It also includes an analysis of various management accounting reports such as budget reports, inventory management reports, account receivable reports, and performance reports. The report concludes by summarizing the key findings and recommendations for BRIGHTSTAR company.

Management Accounting

Contents
INTRODUCTION.....................................................................................................................................3
LO 1........................................................................................................................................................3
Management accounting system and their types..............................................................................3
Different types of management accounting reports..........................................................................6
M1 Identify the benefits of management accounting system and it's application in the
organisational context ......................................................................................................................7
D1 Critically evaluate that how management accounting system or management accounting
report linked within organisational process......................................................................................8
LO 2........................................................................................................................................................8
Costing methods along with a calculation of net profitability...........................................................8
M2 Management accounting techniques and financial reporting documents................................13
D2 Financial reports which applies to interpret business activities.................................................13
LO 3......................................................................................................................................................13
Different planning tool used for budgetary control with their advantages and disadvantages.......13
M3 Use of planning tools for preparation and forecasting the budgets..........................................16
LO 4......................................................................................................................................................16
Organisations are adapting management accounting systems to respond to financial problems...16
M4 Management accounting in response to solve financial issue that can lead to the sustainable
success.............................................................................................................................................18
D3 Planning tools to resolve the financial problems........................................................................19
CONCLUSION.......................................................................................................................................19
REFERENCES.........................................................................................................................................20

INTRODUCTION
Management accounting play an essential role in the growth and success of an
organisation as it directs managers to prepare a suitable reports and make an effective
decisions in order to operate its business functions more smoothly. Such reports contains all
valuable information related with financial as well as non-financial transactions made by
various departments on daily basis so that the actual financial position of company can be
easily identified. For this, mutual support by various departments such as marketing,
production, finance etc. should required in order to give reliable and accurate information to
the management. The present assignment report is based on BRIGHTSTAR company which
is engaged in providing financial services to the clients operated business in UK market. The
project describes the management accounting and reporting systems along with their
integration and benefits. The project also discusses the costing methods with a suitable
example of calculation of net profitability. Various planning tools to control budget and
resolving financial issues are also briefly explained under this report.
LO 1
Management accounting system and their types
Management accounting is concerned with an activity of identifying, evaluating,
recording, and interpreting financial information which is useful for managers to make
suitable decisions and effective plans for smooth functioning of business. The main purpose
of management accounting is to track and estimate costs that will help managers to prepare
an effective budget for future business activities. It provides information both financial as
well as non-financial information which is useful for internal as well as external interested
parties to an organisation regarding their decisions for betterment of an organisation. For this,
it is important for all the departments of an organisation such as marketing, production,
finance etc. to provide sufficient details about their transactions made on daily basis so that it
can be accurately recorded and utilised while decision-making process (Baars and et.al.,
2015).

Bases Management accounting. Financial accounting.
Meaning. It is the accounting system which
provide information to the
manager to make policies, plans
and strategies for their business.
In this accounting system company
prepare a financial statement of an
year to provide financail
information to their shareholders.
Is it necessary? No Yes
Information Monetary and non monetary
information.
Monetary information only.
Useful for? It is used by internal department
only.
It is used by both internal and
external department.
Therefore, BRIGHTSTAR company should support its accounting manager to
perform their roles and responsibilities through motivating and guiding them so that they can
bring valuable outcomes to company by analysing the actual financial position of company.
Types of management accounting systems
Cost accounting system: It is valuable system which is utilised by management to
estimate the cost that will be further incurred in future business activities so that cost has been
controlled, inventory has been valued and profitability should be increased. It is also called as
product costing which valued the cost of products after determining the actual cost incurred
in manufacturing and selling products to the final customers. It is most beneficial to use by
manufacturing company such as BRIGHTSTAR company in order to monitor and record
transactions made during financial transaction process. Therefore, BRIGHTSTAR company
must use such system in order to establish a framework and estimate the cost that will be
utilised in future transactions with their clients. It makes easy for company to value its
products and after that sell into market with an effective prices in adding with their margin
(Brennan and Merkl-Davies, 2013).
Actual costing- is a system that include direct cost rates and actual overhead which is
used in process of production. It is used by bright star comapny to find out their measurable
cost. In these they add their material cost, employee charges and time which is invested to
provide services for their customer.

Normal costing- this is a tool that is used to derive the actual cost of a product. In
normal cost process price of product are include under actual cost while overhead price is the
pre-determined factor that can be used in normal costing. Bright star company is using them
as asset valuation because they are in service industry.
Standard costing- under this type of costing their value in material, labor, and
overhead cost all are pre-determined. It work as a benchmark for them that can be used for
calculate the standard cost of the goods that can produce by the manufacture. Like bright star
company calcualte their interest rate as per the bench mark told by banks or private sector.
Price optimisation system: It is another useful system which brings valuable
information about the actual perception and buying behaviour of targeted people regarding
the pricing policies implemented by an organisation on their offerings. It assist managers of
BRIGHTSTAR company to think twice about their existing pricing policy and accordingly
make suitable changes in order to maximise the satisfaction level of customers and achieve
their loyalty with company for longer period of time. For this, managers should first
determine the rivals’ pricing policy along with the quality of their offerings and on the basis
of which decide to charge prices in exchange of their products and services to the customers.
It directly makes position impact on their existing consumer base as well as profitability.
Inventory management system: It is a system which directs the managers of an
organisation to track and monitor the products through the whole supply chain or some
portion of it which is used in its business operation. The main purpose of using such system is
to make control and monitor the level of stock along with the deliveries and orders. It also
facilitate managers to acquire knowledge about the requirements of inventory so that the
order has been take place in advance which increases their capabilities to meet customers’
needs and requirements on timely basis. Along with this, it ensures company to have
sufficient amount of funds due to which allows company to run their process without any
interruptions. It increases the brand loyalty as well as profitability of company (Hasniza
Haron, Kamal Abdul Rahman and Smith, 2013)
Job costing system: It is the framework which gathered information about the total
expenses incurred in particular generation process. Such expenses are utilised to produce
something which are more in demanded by targeted people. This will assist managers to
make an effective pricing policy that covers all the expenses incurred so that profitability can
be gained on selling each products to the customers. BRIGHTSTAR company can use such

system to analyse the cost of transacting its financial products and on the basis of which
setting pricing policy which increases the satisfaction level of customers as well as profit
margin of company. Job costing system includes different aspects such as getting an enquiry,
order for generation, recording of expenses and achievement of employment etc.
Different types of management accounting reports
Budget reports: This is a report which is prepared for the purpose of maintaining
performance level of company for future period of time. It is prepared by every organisation
irrespective of the size whether small, medium or large as it is necessary to prepare in
advance for executing future business operations more smoothly. It is based on the estimation
of cost invested in future business activities so that desired results can be attained within pre-
determined time period. It reduces the wastage of resources which makes positive impact on
the profitability of company (Klychova, Faskhutdinova and Sadrieva, 2014).
Inventory management report: It is prepared to maintain sufficient level of inventory
with company so as to meet customers needs and requirements on time. Such reports contains
accurate information about the actual inventory and inventory required to order from
suppliers with the purpose of continuing production process without facing any interruptions
related with shortage of stock. BRIGHTSTAR company is engaged in providing financial
services therefore it is very important for their managers to prepare such report in order to
facilitate their various departments to perform their functions without facing any
disturbances. Analysing such reports enable managers to decide whether there is required to
order inventory or should wait keeping in mind the reducing storage cost. It increases
capabilities of company to fulfil the requirements of customers which in results achieving
their loyalty for longer duration.
Account receivable report: It is another reporting system which gives accurate details
about the list of default debtors so that legal action can be made against them for further
recovery. Such report maintains the financial position of company by identifying the amount
which will be recovered in future time period . It questions the existing credit policies of
management as well for non-recovery or loss to company which provides them an
opportunity to make changes in their existing credit policies so that the chances of facing
losses or bad-debt can be minimised. It indirectly supports in maintaining profitability of
company (Nas, 2016).

Performance reports: It provide details related with the performance level of every
departments whose contribution decide the growth and success of an organisation. For this,
managers of every departments should provide accurate information about their transaction
made on daily basis so that the comparison can be made between actual and standard results.
It makes easy for managers to identify the deviations if any, which affect their performance
level so that an effective decisions can be made to eliminate such deviations and motivate its
departments through allocating them appropriate funds and resources in order to facilitate
them for better functioning.
M1 Identify the benefits of management accounting system and it's application in the
organisational context
Adoption of various management accounting system brings negative as well as
positive impact on the business operations of company. It support organisation to maintain its
market position by keeping all records of transactions made by the different departments of
company on daily basis. Here are the some benefits of management accounting systems:
Types of management
accounting system
Benefits of accounting system
Job costing system It assist manager to analyse the cost incurred in dealing with
specific product which will help in determining their
profitability after selling into market. It makes easy for
managers to decide which product should produce more which
increases their net profitability.
Inventory management system It assist company to main adequate level of inventory which
can meet customers’ needs and requirements on time. It
contains details about stock-in and stock-out.
Cost accounting system It helps in identifying the total cost incurred in transacting
products and services with their the final customers which
enables managers to make an effective pricing policies after
adding some margin on it.
Price optimisation system It identifies the actual perception of customers towards
existing pricing policy of company which allows the managers
to make suitable changes with a motive of achieving their

loyalty.
D1 Critically evaluate that how management accounting system or management accounting
report linked within organisational process
Integration of management accounting system and reports
Management accounting and reporting systems both provided adequate support to an
organisation in maintaining their financial position in market through providing sufficient
details about the transactions made by departments on daily basis. BRIGHTSTAR company
can use both system in order to stable their market position for longer period of time. For
example, inventory management accounting and reporting system enable managers to make
decisions regarding maintaining sufficient inventory level which can easily meet the needs
and requirements of customers. Another accounting and reporting system is cost accounting
system which help managers to recover the total cost incurred in selling financial products to
the customers by estimating the cost and accordingly make pricing policies in addition of
their profit margin (Quattrone, 2016).
LO 2
Costing methods along with a calculation of net profitability
Cost: It Cost is a sum which is to be bring about by the organization during the
generation or instalment of something. This will comprises of time or work which is essential
for achievement of desired goals and objectives. It is known as the estimation of cash which
is utilized something like create something. In this manner, it isn't accessible for utilization of
any more. This would build profitability of the divisions and additionally in general
association. Supervisors needs to make break down of aggregate expenses to take essential
choice in regard to oversee and control additional expenses for the business (Vasile and Man,
2012).
In the event that these additional expenses are not controlled in time, it will make more
weight on clients and that make them think to buy results of the organization. Along these
lines, BRIGHTSTAR company needs to confront antagonistic ramifications over the
efficiency and generosity at a similar purpose of time. With the end goal to look with such
sort of circumstance, directors requires to distinguish every one of those essential zones that

are taking most extreme expenses. An ideal systems and measure would be useful with the
end goal to defeat these additional expenses of the organization. For this reason there are
different costing technique that will be useful with the end goal to expand efficiency of an
association. Some of them are referenced underneath:
Absorption costing: It is an administrative bookkeeping methods which is connected
with expensing all expenses those are connected with creation of an explicit items. It
comprises of both variable and settled expenses. It incorporate whatever is a
straightforwardly have effects on the items. The expense of a complete units in stock can
comprises of direct work, material and overhead costs (Absorption Costing Method. 2019).
Marginal costing: These are said to be that costs which is connected with extra expense of
units. In bookkeeping framework under which variable expenses are brought about to a cost
units and also settled amid that specific timeframe. It doesn't taken settled expense to evaluate
net productivity yet just factor costs are taken into contemplations (Marginal Costing
Method. 2019).
Income statement by absorption costing method:
Particular Amount
Sales (25*10000)
Less- Cost of good sold
Gross profit
Less- Selling and manufacturing overhead
Net profit
250000
140000
110000
60000
50000
Working Notes*
Calculation of sales(25*10000) - 250000
Calculation of cost of good sold - 140000
(Direct material+ Direct labour+ Variable manufacturing overhead+ Fixed manufacturing
overhead: 50000+30000+20000+40000)

Calculation of selling and manufacturing expenses - 60000
(Variable selling and manufacturing overhead+ Fixed selling and manufacturing overhead :
30000+30000)
Income statement by marginal costing method:
Particular Amount
Sales
Less: Marginal cost of sales
Contribution
Less: Fixed cost
Net income
250000
130000
120000
70000
50000
Working Notes*-
Calculation of marginal cost of sales - 130000
(Direct material+ Direct labour+ Variable manufacturing overhead+ Variable selling and
administration expenses: 50000+30000+20000+30000)
Calculation of fixed cost - 70000
(Fixed manufacturing overhead+ Fixed selling and administration expenses: 40000+30000)
Interpretation- From above solved numerical, it has been analysed that in both the
method of costing, company is getting net income equally. In the absorption method net
income is of 50000 and in marginal costing method too.
Income statement by absorption costing method (When 5000 units sold)
Particular Amount
Sales (5000*25)
Less- Cost of good sold:
Direct material- 50000
Direct labour- 30000
125000
140000

Variable manufacturing overhead- 20000
Fixed manufacturing overhead- 40000
Gross loss
Less- Selling and manufacturing overhead
Fixed selling and manufacturing overhead- 30000
Variable selling and manufacturing overhead-30000
Net loss
(15000)
60000
(75000)
Income statement by marginal costing method( When 5000 units sold)
Particular Amount
Sales(25*5000)
Less- Marginal cost of sales:
Direct material- 50000
Direct labour- 30000
Variable manufacturing overhead- 20000
Variable selling and administration expenses- 30000
Contribution
Less- Fixed cost:
Fixed manufacturing overhead- 40000
Fixed selling and administration expenses- 30000
Net loss
125000
130000
(5000)
70000
(75000)
Interpretation- From above solved numerical, it has been analysed that company is
getting loss from both costing method. In absorption method, net loss is of (75000) as well as
in marginal costing method company is getting same loss of (75000)
Financial reporting document with labour and material variances:
Budgeted Actual Variance

Units 1000 1100 100(F)
Hours 3000 3400 400(A)
Units per hour 3 3.09 0.09(F)
Labour 15000 17680 2680(A)
Labour rate per unit 15 16.07 1.07(A)
Labour rate per hour 5 5.2 0.2(A)
Actual
Units 1000
Material used Kg 2200
Actual Material cost 20900
Material cost per kg 9.5
Material cost per unit 20.9
Budgeted material cost per unit of the product 2kg at £10/kg
Budgeted material cost per kg ( £ 10/2) 5
Budgeted Material cost 11000
Variance (Actual- budgeted) 9900(A)
Strengths Weaknesses

 Bright star Company has effective
sales staff which sale company
products easily and efficient service
provider which can satisfy the needs
of their customer.
 Internal environment of company is
very positive due to having less
pressure on employees, target provide
to employees are not so complex so
employees are always motivated.
 Company have to bear high fixed and
overhead cost. As this both are also
necessary for doing regular business
operation. So in these company can
invest their money and time which
create a barrier in their performane/
 Competitors like HSBC, Mckinsey &
company are more experienced in
financial industry as compare to
bright star company. So they capture
a large market which reduce sale of
bright star company products and
services.
Opportunities
 At initial stage company can create a
base of loyal customer by providing
more facility to their customer by
remove of customer doubt regarding
the company image.
 Company can make use of social
platform in which they can connect
people easily for doing
documentation process.
Threats
 In the phase of economic downturn
company have to face unexpected
event. Like there customer who has
deposited their money in company
project now at downturn phase they
want their money back which is a
difficult task for company.
 Other competitors like HBSC
expanding himself internationally and
launching new products like
insurance etc. as per the demand of
customer which help them to cover a
large base of potential customer .
M2 Management accounting techniques and financial reporting documents
There are many management accounting techniques such as price optimisation system,
cost accounting system etc. which facilitate Bright star financial limited company to achieve
its desired goals and objectives through directing management to frame an effective plans and

policies. Using of management accounting system assist management to prepare accounting
reports on the basis of information gathered which makes easy to drive business towards right
path.
D2 Financial reports which applies to interpret business activities
Financial reports provides adequate information about the current financial position of
company which brings confidence among management to make suitable plans and policies
for the achievement of desired goals and objectives. Such reports includes performance
report, budget report, inventory management report etc. which shows the actual financial
position of company.
LO 3
Different planning tool used for budgetary control with their advantages and disadvantages
Budget: It refers to the estimation of future expenses that to be incurred in executing
business activities along with evaluating the income earned on the same business activity. It
is prepared on the basis of previous year budget which increases the chances of minimising
the wastage of cost that makes positive impact on the profitability of company. Budget is
mostly prepared on annual basis. Bright star financial Ltd. company can prepare budget in
order to provide financial services to their clients in near future (Chenhall and Moers, 2015).
Budgetary control: It is the part of strategy and plans made by the management of an
organisation with the purpose of reducing cost of business and increase profitability of
company. Thus, it is more useful for every organisation whether engaged in retail,
manufacturing or financial services. Bright star Financial Ltd. company uses this technique to
manage and monitor the business in an effective way through investing amount in profitable
areas.
Contingency planning tool: It is used to manage and monitor the risk connected with
the situations that may happened on sudden basis while executing business operations in an
organisation. It assist management in making suitable plans and policies to overcome
unexpected future risk occurred at workplace. Bright star limited company gets supported
from such tool in form of making back up plans, strategies and schedules in order to tackle
the hurdles that may comes in daily business operations (Gibassier and Schaltegger, 2015)
Merits:

 Such planning tool assist an organisation in reducing the possibilities of occurring
risks, losses and failure by implementing suitable back up plans.
 It facilitate in identifying and implementing corrective actions against sudden
problems in the Bright star limited company.
Disadvantages:
 To formulate different backup pans in case of emergency and contingency which can
create issues among the ideas of various manager to deal with particular situation.
 It requires huge cost and time which may bring company behind their rivals in dealing
with market risk and uncertainties.
Flexible budget: It is considered as an effective tool which facilitate company to
make suitable changes in the budgets at the time when they occurred. This kind of budget
prepared by an organisation enable Bright star Company to estimate the income and expenses
according to the current outputs. It is used to analyse the successful and unsuccessful area in
the operations of previous performance during financial period of time. The managers of
Bright star Company can prepare such budget for the operations which may influences or
changes over a period of time (Lambert and Sponem, 2012).
Advantages:
 It brings coordination among various different functions in the Bright star Company.
 It assists company in gaining accurate and reliable result due to considering wide
range of activities on individual basis.
Disadvantages:
 It is more challenging for company to make and execute the flexible budget due to
inclusion of various variables.
 It is complex in nature which brings difficulties for Bright star Company to
understand the fluctuations in business operations which increases the failure of
budget.
Forecasting planning tool: It helps in estimating future by evaluating the previous
and current year budget along with the circumstances of any organisation. Such kind of tool

is useful to forecast the outcomes and future plans according to the past information and
situations happened within an organisation. This tool assist the management of Bright star
Company to estimate and drive to fulfil the future needs and requirement through properly
analysing the financial statements, calculating the ratios and past information of company
(Nitzl, 2016).
Merits:
 It facilitate Bright star Company to maintain the loyalty of their clients through giving
them the estimated assumptions on the basis of their budgetary reports.
 It benefited the managers of Bright star Company to make suitable plans through
considering the valuable financial data.
Disadvantages:
 It is complex for the managers of Bright star Company to forecast the accurate future
and make plans accordingly.
 The gathered information from different departments of Bright star Company are not
sometimes helpful for making plans due to less reliability and accuracy.
Competitor determining their price:
 Bright star company competitor Capricorn Wealth Management can determine their
price of service by observing their rivalry's current prices which are charged by them
from their customers.
 By compare their service with other competitors whether they want to continue in this
range. If they have any USP they can go outside form this range.
 To conduct an effective market research, the actual taste and preferences of targeted
customers are easily identified which makes easy for Capricorn Wealth Management
to make suitable changes in their current pricing policies.
M3 Use of planning tools for preparation and forecasting the budgets
Budget is an essential part of plans and policies formulated by the management for the
success of an organisation. Using budgetary control tools such as scenario planning tool,
contingency planning tool etc. help management in controlling cost of operation executed in

future time period. This will enable an organisation in maintaining their financial
performance in market for longer period of time.
LO 4
Organisations are adapting management accounting systems to respond to financial problems
Financial problems: It is the unwanted or undesired thing which an organisation
never want in their entire business life. Financial issues can be arises due to poor
management support, low skilled employees, failure of plans and policies etc. Bright star
Company may faces such kind of issues which makes negative impact on their market image
and sustainability. Here are the brief description of financial problems that may faced by
Bright star Company:
Problem of cash flow: Such kind of issue arises when an organisation doesn’t have
sufficient amount of funds to pay its debts or liabilities. The main causes of such issue is not
to earn expected profits or faces losses. Bright star Company faces issues as it spends lots of
capital expenditure to promote its brand (Renz, 2016) This will failed company to pay undue
amount to their creditors. To continue to operate business in competitive market, an
organisation have makes tax payments to the government, salary and incentives paid to the
staff etc.
Risk management: Every organisation wants to sustain in competitive market for
longer period of time which can be possible only if the management are able to manage and
control future unexpected risks arises within or outside of an organisation. For this, the
management formulate plans and policies to deal with future risk. Thus, failure of any plans
and strategies may cause financial losses to company. Bright star Company faces financial
issues due to poor execution of plans and strategies, lack of support by its staff etc.
Financial issues resolving tools:
Financial governance: It is an effective and useful tool which directs an organisation
to collect, manage, monitor and controls the financial data that will restrict them in facing any
kind of financial losses. Thus, Bright star Company should have good financial governance
which assist their management to deal with the future challenges through maintaining
financial statements on regular basis.

Management accounting approach: There are various management accounting
approaches which helps in resolving issues faced by an organisation. Such approaches
includes price optimisation system, cost accounting system etc. which facilitate Bright star
Company to manage and control their financial performance through reducing business cost
and expenses. For example, cost accounting system help in analysing the future cost incurred
by an organisation to operate business activities through forecasting the outcomes which
reduces business cost of company (Wickramasinghe and Alawattage, 2012).
Key Performance Indicator (KPI): KPI is used to measure the performance level of
various departments such as finance, human resource, marketing etc. which facilitate an
organisation in determining whether the particular department achieved desired result or not
and if not then what are the results behind failure. Maintaining performance records of every
departments by consulting with the respective managers help Bright star Company in
assigning roles and allocation of budget on the basis of future outcomes.
Benchmarking: It is a system utilized by an association to quantify its execution with
its different rivals. The association makes examination based on same measure, technique,
program just as quality with various association to decide the prerequisites in changes or
improvement. Such technique is done to recognize the open doors for development just as
needs to lessen or close the hole with the contenders alongside observing the execution on
regular schedule. Such tool centers around obviously characterizing, estimating and
deciphering the person just as hierarchical exhibitions towards the targets.
Comparison between Brightstar Financial Limited and Capricorn Wealth management
Limited.
Basis of Difference Brightstar Financial Limited Capricorn Wealth
Management
Problem The major problem that brings
more difficulties towards
Brightstar Financial Limited i
risk management due to having
low skilled employees and poor
management support.
Major issue or problem faced by
such company is poor cash flow
due to facing financial losses in
terms of bad debts. It restricts
company to make suitable plans
to achieve competitive edge.
This brings company backwards

from their rivals in competitive
market.
Approach Financial governance is most
effective and suitable financial
tool which directs the
management and employees to
perform according to the rules
and regulations implemented by
an organisation.
Key performance indicator and
benchmarking are suitable tools
which facilitate organisation to
keep records of performance of
all departments. It reduces the
changes of facing financial
losses.
Characteristics of an effective management accountant:
 Communication skill: For an effective accountant it is compulsory that an accountant
should be good in communication no matter where an person work if an employee
interact with colleagues and customer it will effect on his performance like the
communication skill help a employee to know about customer problems by create a
communication channel between them. Technical skill: Effective accountant should be user friendly with the technical skill
like they can easily deal with ms-excel, accounting software etc. These skill can help
them to speed up their operations and increase productivity in their work.
 Analytical and numerical abilities: For an accountant it should be necessary to
become a finder this skill will help accountant to collect the data with efficiency.
They should have to have good analytical and numerical skill so that the analysis of
financial performance of company can be easily done through comparing financial
statements of previous and current years.
M4 Management accounting in response to solve financial issue that can lead to the
sustainable success
Management accounting provides beneficial results to an organisation in term of
resolving financial issues which restricts them in achieving huge success. It consists of
various approaches such as price optimisation system, cost accounting system etc. as well as
financial tools such as KPI, Benchmarking etc.
D3: Planning tools to resolve the financial problems
There are various planning tools to resolve financial issues such as KPI, benchmarking
etc. which enable an organisation in achieving strong financial position in competitive

market. Bright star Financial limited company can use such tool to resolve their issues related
with finance. For example, KPI tool assist in analysing the performance level of departments
through comparing actual performance with past performance. This will help in identifying
the reason behind failure which enable management to make suitable plans and policies.
CONCLUSION
It has been concluded from the above project report that management accounting plays
an important role in achieving success and desired goals of an organisation. It gets maximum
support by various management accounting systems such as cost accounting system, price
optimisation system etc. along with accounting reports such as budget reports, inventory
management reports etc. It assist an organisation in maintaining strong financial position in
competitive market for longer period of time. For this, the management is required to prepare
an effective budget and use different budgetary control tools to reduce business cost an run
the business efficiently.

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