EBMT4003 Finance and Accounting: Bentley Motors 5-Year Report

This report provides a financial analysis of Bentley Motors, a British luxury car manufacturer. It begins with an overview of the company, its business strategy, and ownership structure, highlighting its classification as a limited company. The main body focuses on incorporating a 5-year budget based on the company's financial statements, projecting revenues, costs, and profits. The report also examines the company's operations, discussing how budgeting items are predicted and the impact of external factors like COVID-19 on the manufacturing sector, including factory closures and potential employee layoffs. Furthermore, it explores the company's responses to the pandemic, such as the implementation of safety measures and production adjustments. The report concludes with a summary of the key findings, emphasizing the importance of accounting and finance in business operations and the use of budgeting for predicting future financial conditions.

EBMT4003 Introduction
to Finance and Accounting

Contents
INTRODUCTION.......................................................................................................................................3
Overview of company.............................................................................................................................3
Incorporate the 5 year budget..................................................................................................................5
Operation of the company.......................................................................................................................7
CONCLUSION...........................................................................................................................................8
REFERENCES..........................................................................................................................................10

INTRODUCTION
Accounting as well as finance both are the essential terms for any business that help to
conduct various types of activities in appropriate manner. Finance is a general term
encompassing financial services, influence or loans, financial, financial markets, cash, as well as
expenditure associated matters. Funding probably includes procurement is the act of supplying
the required financial resources (Black and et. al, 2018). One of the most theoretical frameworks
in finance is the financial leverage. Many of financial services key fundamentals derive from
micro- and economic and financial ideas. Perhaps one of the most important ideas is the
opportunity cost of currency, which basically says that the potential price of a major currency
was more than just a dollar. It is a structured mechanism in which accounting reporting is
defined, registered, calculated, categorized, checked, summarized, analyzed and shared. This
shows income or loss over a specified time, and the importance and quality of the properties,
assets and liabilities of a company's shareholders. This report based on the Bentley motors
company which is a British manufacturing sector organisation. The company is dealing into
luxury cars and SUVs. In this report consist of incorporate budget, current trends that impact on
the business and organizational structure.
MAIN BODY
Overview of company
Bentley Motors Limited is a Uk maker and dealer of premium vehicles and SUVs, and a
Volkswagen Group company since 1998. The firm was established as Bentley Motors Ltd by W
and is based in Crewe, England. O. Bentley in Cricklewood, North London in 1919 and was well
recognized for obtaining the Le Mans 24 Hours in 1924, 1927, 1928, 1929, and 1930. The
company has been dealt at worldwide level and provides products of Flying Spur, Continental
GT, Mulsanne and many others. Today, most Bentley designs are constructed at the Crewe
factory at the corporation, with either a limited percentage constructed at the Dresden
manufacturing facility in Volkswagen, Germany, and body parts for the Continental fabricated in
Zwickau as well as for the Bentayga marketed at the Volkswagen Bratislava production facility.

Business strategy: A business strategy includes the actions and judgments taken by an
organization to achieve its business objectives and to be able to compete in its sector. This
determines what the company wants to be doing to accomplish its objectives, and will then
inform the recruiting and capital management decision-making phase. Bentley Motors' business
campaign has been so developed that the firm is distributing the car models worldwide via the
independently owned distributor (Bojarenko, 2017). This business has produced the engines that
are known to be the premium engines in the global economy. The company mainly follows the
growth strategy as well as cost discrimination strategy. The company follows all the rules and
regulations as per the requirements.
Ownership structure: Ownership arrangement includes a corporate entity's internal
organisation and the privileges and obligations of persons that have a legitimate or equal stake in
that company. Those privileges are different than those of limited liability corporation owners.
There are defined different types of structure that followed by the organisation according to their
business these are:
Sole trader: A person who runs an overall company. Sole traders will retain all the
earnings of the company after charging taxes on it so they are directly liable for any damages
that the company generates (i.e. if appropriate, they will have to fund it and out their private
funds), covering the costs required to be paid (e.g. property or materials), and maintaining note
on all income and costs. Sole traders may take on workers-the word means because they own the
company themselves, not that they have to operate all alone (Entrop, McKenzie, Wilkens and
Winkler, 2016).
Limited company: A company, set up to manage the corporation by the members. A
limited corporation is a business entity. A business is definitely not a individual in the way that
adopted initiatives it. All the word implies is that the law allows a limited partnership should
have the same legal status as a person, i.e. it has legal capacity irrespective of its holders' duties
and privileges as persons (Otley, 2016).
Business partnership: A structure in which two or more parties share ownership of a
company. Three primary types of joint ventures exist: partnerships come in two varieties. All
partners are individually accountable to shareholders in a partnership firm, meaning that they are

accountable with their individual income or wealth for any failures or debt obligations, if
required. In a limited liability company relationship there is no personal liability if any damages
or debts are sustained by the company. Income from a relationship is split by clients and then
each party pays income tax on its portion (Lakshmi, 2018).
From the above structure it is defined that Bentley limited follow the limited company
structure and accordingly follow all the rules & legislation. It is private limited company that not
allows to public to purchase their shares.
Incorporate the 5 year budget
On the basis of financial statement of 2017-18 and 2018-19 of Bentley motors prepare a
budget for 5 year. A budget is used for forecasting an entity's costs and revenue for a subsequent
date. It can be used for preparing and calculating success objectives and could involve
expenditure on capital assets, bringing out new goods, hiring staff, setting up incentive programs,
monitoring activities, and so on. A budget includes an expected declaration of profits for
projected times at the lowest stage. An even more complicated budget includes a marketing plan,
the prices of the product sold and the spending available to sustain the sales projections, forecasts
of working capital needs, transactions of fixed assets, a cash flow analysis and a predict of cash
generation (ERIN, Okoye, Modebe and OGUNDELE, 2016).
Budget with profit projections
Bentley Motors Ltd
5 years
Year 1 Year 2 Year 3 Year 4 Year 5
REVENUE
Commissions (2.5%
sales) 77,500 17,500 25,000 17,500 17,500
Direct wages fixed 200,000 50,000 50,000 50,000 50,000
Sales 3,100,00 700,000 1,000,000 700,000 700,000

0
Cost of Goods Sold 400,000 100,000 100,000 100,000 100,000
Gross profit 2,422,50
0 532,500 825,000 532,500 532,500
EXPENSES
General & Administrative
Expenses
Accounting fees 20,000 5,000 5,000 5,000 5,000
Legal fees 5,000 1,250 1,250 1,250 1,250
Bank charges 600 150 150 150 150
Office supplies 5,000 1,250 1,250 1,250 1,250
Postage & printing 400 100 100 100 100
Dues & subscriptions 500 125 125 125 125
Telephone 10,000 2,500 2,500 2,500 2,500
Repair & maintenance 50,000 45,00 2,000 2,000 1,000
Payroll tax 25,000 6,250 6,250 6,250 6,250
Marketing Expenses
Advertising 200,000 50,000 50,000 50,000 50,000
Employment Expenses
Superannuation 45,000 11,250 11,250 11,250 11,250
Wages & salaries 500,000 125,000 125,000 125,000 125,000
Staff amenities 20,000 5,000 5,000 5,000 5,000
Occupancy Costs
Electricity 40,000 10,000 10,000 10,000 10,000
Insurance 100,000 25,000 25,000 25,000 25,000
Rates 100,000 25,000 25,000 25,000 25,000
Rent 200,000 50,000 50,000 50,000 50,000
Petty cash 1,000 300 300 200 200
Water 30,000 7,500 7,500 7,500 7,500
Waste removal 50,000 12,500 12,500 12,500 12,500
TOTAL EXPENSES 1,402,50 383,175 340,175 340,075 339,075

0
NET PROFIT (BEFORE
INTEREST & TAX)
1,020,00
0 149,325 484,825 192,425 193,425
Income Tax Expense
(30% Net) 306,000 44,797.5 145,447.5 55,727.5 58,027.5
NET PROFIT AFTER
TAX 714,000 104,527.5 339,377.5 136,697.5 135,397.5
As per the above budget based on the predication in which defined that in 2 years
company generate good profitability but after the some changes in business fall down the
business. It presents negative manner for the business and presents the fall down in profits. In a
systematic manner all the expenses are keep same and not apply any change n the business.
Operation of the company
All the budgeting items are predicted by the business on the basis of future conditions. In
starting of 2 years company effectively conduct all the activities but after the COVID 19
Company face the problem in manufacturing sector. Most of the factories get closed due to labor
go back to their cities. In the budget commission amount keep same due to no changes in
commission percentage in 5 years. There are all the expenses such as, rates, rent, petty cash and
any others are no changing because company follows the same structure in 5 years that helps to
maintain profitability in business and generate more profit as compare of other years (Fodor,
Stowe and Stowe, 2017).
In present time The British industrial market witnessed the strongest fall in production
since 2013 at the beginning of the decade 2020. Trade organizations like Make UK have been
sounding the alarm more about industry's Brexit-fuelled pessimistic perspective for years,
worrying that new legislation could inhibit development or contribute to a collapse in global
trade, but the corona virus is affecting things. It's been difficult for the manufacturing industry
for the last few years-businesses have been putting off investment on lengthy-term recruiting,
construction, training and equipment. Due to face these alteration in this sector Bentley Motors
can terminate many employees because of less production in company. In present time company

does not generate benefits so it impact in negative manner and they are facing problem of the
less profitability. Bentley Motors is set to postpone manufacturing for four weeks from the date
at its factory headquarters in Crewe, UK. This decision is focused on the increased pace of
corona virus infections and comprehensible constraints introduced, the subsequent chain
management disturbances that should be seen early, as well as weakening demand on certain
motor driver. But most pertinently the choice is to safeguard the lives of all the many coworkers,
their schools and friends from Bentley (Isidro and Dias, 2017). Key company activities will
begin with employees located whether in Crewe, adopting social distance strategies or operating
globally during the closure. Manufacturing will not restart again till April 20.
British car manufacturer Bentley Motors will launch a range of about 250 new health and
cultural trying to distance initiatives under the 'Come Back Better' workplace plan to facilitate a
secure, gradual return to manufacturing at the world office in Crewe, England, from May 11.
Bentley intends complete production to resume as of May 18. The strategy marks the greatest
shift in the company's 100-year experience of ordinary working existence. The initiatives are
centered around seven main places – when living away from home, commuting, visiting,
planning for work , work places, intervals and entering the facility – which are planned to secure
the manufacturer 's workers, which hires more than 4,000 employees and elsewhere in Bentley.
The main process improvements involve all fields, including a renovation of the plant itself to
enable a two-meter buffer between work partners but one-way travel pathways and vehicular
traffic. Contact lenses will also be mandatory in both plant and workplace regions, though
Bentley will retain a household-policy job with all who can. Protective equipment such as face
masks, gloves, goggles – will be supplied as required, both to managers and offered to donate to
the regional care industry, and to also staff wellbeing ceramic heaters. There is also an improved
washing regularly scheduled and clear guidelines for the labor force to reduce contamination in
regions including such management meetings, connect directly to sites and travel (Isshaq and
Faff, 2016).
CONCLUSION
As per the above report it has been concluded that operate any business require to proper
accounting that helps to record every transactions that conduct by the business in particular

accounting period. Along with also require to financing that helps to present actual position of
business are record all the transactions in particular accounting books. These transactions are
categorized according to their nature and record in the financial statements. On the basis of these
transactions are prepare the budget for the five years that helps to predict that future condition of
business after 5 years. Moreover define about the business activities that impact by COVID 19
and presents negative impact.

REFERENCES
Books and Journal
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practice. Journal of Business Finance & Accounting. 45(3-4). pp.259-294.
Bojarenko, J., 2017. Variability of accounting policies–advantages and
disadvantages. Copernican Journal of Finance & Accounting. 6(3). pp.9-19.
Entrop, O., McKenzie, M., Wilkens, M. and Winkler, C., 2016. The performance of individual
investors in structured financial products. Review of Quantitative Finance and
Accounting. 46(3). pp.569-604.
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accounting standards (IPSAS) adoption and quality of financial reporting in the Nigerian
public sector. ESUT Journal of Accountancy. 7(2). pp.22-30.
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Otley, D., 2016. The contingency theory of management accounting and control: 1980–
2014. Management accounting research. 31. pp.45-62.
Xu, W., 2016. Accruals management to avoid losses. Journal of Business Finance &
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