Financial Analysis of MEP: Accounting and Decision Making

This report provides a financial analysis of Merlin Entertainment Plc (MEP), focusing on the utilization of accounting information for effective decision-making. The report explores the use of financial statements, budgets, and variance analysis. It highlights various decision-making tools such as trend analysis, forecasting, and capital budgeting, and also discusses the comparison of financial performance through ratio analysis. The analysis underscores the importance of these tools in evaluating MEP's financial health and making informed decisions. The conclusion emphasizes how MEP's managers can leverage these methods to evaluate performance and guide future decisions. The report references various sources to support the analysis, providing a comprehensive overview of financial management practices in the context of MEP.

Finance and funding in
Travel and tourism (Task 2)

It is the responsibility of Merlin Entertainment Plc’s
managers to use different accounting information for
making quality decisions. This presentation will
depicts the importance of different accounting
information that assist MEP to manage their business
transactions effectively.
INTRODUCTION

Collection of accounting information in MEP
 Financial statement: Annual financial accounts of
MEP represent a summary of business transactions
and financial activities for whole year.
 Budgets: It summarizes all the projected revenues
and spending for the upcoming years.
Use of accounting information

 Variance analysis: Comparison of actual
performance with targets.
 Management accounting information:
Computerized system to integrate all the business
information.
Contd.

There are different types of decision-making tool
available to MEP managers to make appropriate
decisions for the business success, presented below:
Trend analysis: : It is an effective technique to
forecast about future period on the basis of historical
occurrences.
Forecasting: In budgeting, management can forecast
their cash inflow and its disbursement in different
business activities and thereby can determine the net
cash position.
Decision-making tool

 Capital budgeting: Helps to determine the best capital
proposal which will yield greater return in future.
 Comparison of financial performance: MEP can
evaluate their profitability, solvency, liquidity and
managerial efficiency internally and with competitors
via ratio analysis.
Contd.

Presentation concluded that MEP’s managers can apply
different tools like trend analysis, forecasting and
ratio analysis to examine their performance and
variance analysis. This in turn, better decisions can be
taken in future period.
CONCLUSION

Kaplan, R. S. and Atkinson, A. A., 2015. Advanced
management accounting. PHI Learning.
Karande, P. and Chakraborty, S., 2012. Application of
multi-objective optimization on the basis of ratio
analysis (MOORA) method for materials selection.
Materials & Design. 37(3). pp.317-324.
Kumbirai, M. and Webb, R., 2013. A financial ratio
analysis of commercial bank performance in South
Africa. African Review of Economics and Finance.
2(1). pp. 30-53.
REFERENCES