Management Accounting Report: Agrium Inc. Overview and Analysis

This report delves into the management accounting practices of Agrium Inc., a manufacturer and supplier of agricultural nutrients and products. It examines their financial performance, based on their 2017 annual report, highlighting significant net profits. The analysis extends to non-financial aspects, such as employment policies, environmental remediation efforts, and sustainability initiatives detailed in their 2018 sustainability report. The report explores how Agrium Inc. integrates weather conditions, labor market forecasts, and international regulations into their decision-making processes. It also reviews their investments in employee training, community development, and youth education. The report concludes that management accounting supports strategic business objectives, and recommends increased investment in research and development to improve environmental sustainability.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary:
This report is prepared to understand and explain the concept of management accounting based
on a real case study. Management accounting is a special branch of accounting, which deals with
the analysis of financial as well as non-financial information of a company and helps the
management in decision-making process by providing helpful information. In this report, the
published financial and nonfinancial information of the Agrium Inc have been used to analyze
their management accounting policies and nonfinancial aspect of their management accounting.

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Table of Contents
Introduction:....................................................................................................................................3
Brief overview of the company:......................................................................................................3
Analysis of Management Accounting Information of Agrium Inc:................................................4
Conclusion:......................................................................................................................................6
References and bibliography:..........................................................................................................7

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Introduction:
Management accounting is the process of analyzing the financial and nonfinancial
information of an entity and helping the management in various important decisions making by
providing processed and meaningful information. It not only helps in decision-making, also it
helps in building business strategies aiming at achievement of overall business objectives. In this
report, the financial and nonfinancial information of the Agrium Inc have been analyzed to find
out their management accounting principles and policies and to identify and analyze the
nonfinancial information and its importance in their management activities. In the following
paragraphs of this report, all those aspects of management accounting have been analyzed and
presented chronologically (Rikhardsson 2017).
Brief overview of the company:
Agrium Inc is a manufacturer and supplier of agricultural nutrients and agricultural
products worldwide based on their manufacturing units in North and South America and their
market base is mainly in the Canada, US and Australia. They have been leading the respective
industry since a long time. Their business operations are always concentrated on preserving the
environment and the nature. They have developed and upgraded their manufacturing facilities to
produce environment friendly agricultural nutrients and they have taken various financial and
non-financial initiatives to maximize the benefits to their stakeholders. Some of such financial
and nonfinancial initiatives and information have been analyzed in the following paragraphs
(Nutrien 2019).

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Analysis of Management Accounting Information of Agrium Inc:
The 2017 Annual report of the Agrium Inc have been considered for this analysis. The
2017 Annual report of Agrium Inc reveals information about financial performance and position
of the company as well as some nonfinancial measures of the company. It can be observed from
the 2017 Annual report of the Agrium Inc that, they have successfully made a significant amount
of net profit in the fiscal year 2017. On the other hand, it can be observed that they have taken
various nonfinancial measures in that fiscal year to improve the quality of their products and to
serve a better experience to their stakeholders (Agrium Inc 2017 Annual Report 2019).
The most important nonfinancial information, which can be gathered from their annual
report, is their employment policies and practices. It can be observed that, they follow the
regulations of US and Canada to create and maintain medical and pension plan for their
employees and for funds plan, they deposit the amount with some trustee-administered funds
completely separate from the Agrium Inc. Some of their manufacturing activities harm the
environment and they are liable for remediation of the environment (Agrium Inc 2017 Annual
Report 2019). Form their 2017 Annual report, it can be observed that, they hey work on all of
those manufacturing sites in various stages to remediate the environment by plantation of trees
and purification of the soil and water. The remediation or rehabilitation activities requires huge
amount of fund and they have taken a policy of creating a provision for that. They consider the
future uncertainties, which may lead to a higher expenditure towards remediation and
rehabilitation and shares the expenditure with other parties responsible for the remediation in the
same area. Idaho phosphate mining and processing sites and the Manitoba mining properties are
two most important areas where the remediation and rehabilitations have been initiated by the

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Agrium Inc. It can be observed from their 2018 sustainability report that, they have reclaimed or
restored 2,240 acres of land in the year 2018 (Reports & Policies 2019).
They have taken an initiative to grow proprietary seeds, plant health and crop protection
products, which they have achieved. There is an increase in the total sales by two percentages,
which is due to the sales of crop protection products. They have planned to acquire as hybrid rice
breeding facility and to manufacture the proprietary seeds commercially from the year 2020.
Their livestock export services to Australia lead them to increase their service revenue by seven
percentages in the year 2017 (Agrium Inc 2017 Annual Report 2019).
They take the pricing decision based on the market condition and the weather and
seasonality of their products. As the agriculture is fully depended on the weather conditions and
their products are all agricultural related, they have to consider the weather condition for various
important decisions and strategy building (Reports & Policies 2019). Their consideration of the
weather conditions and related provisions in the decision-making can easily be observed from
their annual report. They have forecasted and estimated a tight labor market and lack of skilled
work force in the near future, which seeks the manufacturing process to be made more
mechanical. As the Agrium Inc is having their business operations in international markets, they
have to comply with the rules, regulations and compliance requirements of those countries. Their
business operations are mostly in US, Canada and Australia, hence they consider the legislative
changes in their decision making process. They also take care of the health, safety and security
issues with their employees and always trying to improve the working environment for their
employees.

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The sustainability report of the company also reveals certain nonfinancial management
information of the company. It can be observed from their 2018 sustainability report that, they
are having more than 1700 retail facilities across the US, Canada, Australia and the South
America. They are having 20,300 permanent employees and more than 500,000 grower account
with them. They maintain the growers account to serve them with improved products and service
experience. They have spent $1.9B in skill development and training initiatives for their
employees and invested $17M for the community. One more aspect of their nonfinancial
measures is the employment volunteering and education of the youths. It can be observed that
they have they have spent more than 3,500 hours in employment volunteering and educated more
than 640,000 youths (Reports & Policies 2019).
Conclusion:
From the above discussion and analysis, it can be concluded that, management
accounting helps the management to build up business strategies towards achieving the ultimate
objective of the business. The Agrium Inc has various managerial activities and financial
activities, which helped the company to achieve the financial objectives of the company. on the
other hand, some of their non financial measures and initiatives helped them to achieve
sustainability in their business and to have a sustainable business growth. Lastly, it can be
recommended for the company to invest more on their research and development activities to
develop more environment friendly manufacturing process and products.

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References and bibliography:
Agrium Inc 2017 Annual Report. (2019). [Ebook]. Retrieved from
https://www.nutrien.com/sites/default/files/uploads/2018-02/2017%20AGRIUM
%20Annual%20Report%20FINAL.pdf
Collier, P. M. (2015). Accounting for managers: Interpreting accounting information for
decision making. John Wiley & Sons.
Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean manufacturing and firm
performance: The incremental contribution of lean management accounting
practices. Journal of Operations Management, 32(7-8), 414-428.
Hiebl, M. R. (2014). Upper echelons theory in management accounting and control
research. Journal of Management Control, 24(3), 223-240.
Nutrien. (2019). Nutrien. Retrieved 8 August 2019, from https://www.nutrien.com/
Nutrient Annual Report 2018. (2019). [Ebook]. Retrieved from
https://www.nutrien.com/sites/default/files/uploads/2019-03/Nutrien_2018_Annual_Repo
rt_Enhanced.pdf
Reports & Policies. (2019). Nutrien. Retrieved 8 August 2019, from
https://www.nutrien.com/sustainability/reports-policies
Rikhardsson, P. M. (2017). Information systems for corporate environmental management
accounting and performance measurement. In Sustainable Measures (pp. 132-150).
Routledge.

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Schaltegger, S., & Burritt, R. (2017). Contemporary environmental accounting: issues, concepts
and practice. Routledge.