Financial Performance Management Report - Waitrose Analysis

This report provides a comprehensive analysis of financial performance management, focusing on environmental management accounting and decision-making processes within the context of the retail company Waitrose. The report is divided into two main parts: the first part explores environmental management accounting, including internal and external costs, and the role of Environmental Management Accounting (EMA) in improving financial performance. It highlights the importance of identifying and recording environmental costs, implementing environmental policies, and utilizing methods to reduce costs. The second part focuses on decision-making, including the process of making financial decisions. It discusses the role of management accountants, planning tools, cash flow budgets, variance analysis, and appraisal techniques in supporting business operations and removing financial problems. The report emphasizes the relevance of budgetary control and the importance of aligning financial and environmental success metrics for improved organizational performance. The report offers a detailed overview of techniques and methodologies for enhancing financial health.

Financial Performance
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Environmental management accounting......................................................................................3
PART 2............................................................................................................................................6
CONCLUSION:..............................................................................................................................9

INTRODUCTION
Environmental management should be defined as a thoughtful allocation of resources in a way
that helps to improve environmental protection (Sroufe and Gopalakrishna-Remani, 2019). The
overview of the design is split into two separate tasks, so the first task includes information about
the value and reporting of the region. The location of different financial accounting practices is
explained in order to overcome challenges when being in the second mission. To better
understand task one through two, a company that is restricted to Waitrose was picked. It is a
business well established in the United Kingdom that operates throughout the retail industry and,
due to its extensive operations, has acquired considerable market share. The research discusses in
detail problems related to the accountability of corporate management, its prices and the
approaches and used their importance as well as the process by which they are described,
monitored and accounted for. In addition, the analysis also discusses issues related to the
aforementioned consideration, including the importance of decision-making, statistical
techniques and budget growth. In this segment, the more role of KPI in improving financial
performance is also discussed mostly with financial stability that a business can attain.
PART 1
Environmental management accounting
Excessive Exploitation of natural resources or degradation of resources due to economic
activities connected with environmental costs. In order to achieve economic growth, man needs
natural capital along with physical capital. As a result of increase in production, there is a
depreciation of natural assets which is the environmental costs of economic management.
Environmental costs can be divided into two types as internal costs and external costs.
Internal costs encompass businesses and they can intervene with them and in external costs,
businesses are not accountable and cannot intervene (Cloutier, Felusiak and Pemberton-Jones,
2015).
Conventional costs, Hidden costs, Contingent costs, Image and Relationship costs are four
categories of internal costs. Human Impact costs and Environmental Degradation costs are
External costs.

Conventional costs come up from Raw materials, Consumer goods and from Machinery and
Equipment’s.
Hidden costs are subtle environmental costs arise from legal duties and comprises of natural
actions.
Dependent costs may happen in the future confiding on the environmental effects. Image and
Relationship costs are conceptual pattern costs based on manager’s reasoning, consumers,
workers and on the social and the administration. External costs are the costs in which actions
unfavourable to the environment may be accountable (Vom Brocke and Rosemann, 2014).
Environmental costs and Human Impact costs come in different categories according to their
episode. Actions for environmental protection sometimes result in bad environmental costs.
Resources used in production activities result in costs of environment. Pollution can also be the
outcome.
EMA in environmental cost technique and managed by management accounting. EMA is
ecological accounting, focused mostly on giving information for the performance of effective
decision-making. Corporate businesses should also relate economic and environmental success
metrics to the benchmarking process by incorporating environmental issues in managerial
decision. As such, accountability for specific waste sustainability offers environmental-related
knowledge to administrators that facilitate decision-making mechanisms that contribute to better
economic and ecological efficiency (Easterby-Smith, Thorpe and Jackson, 2015).
The company should also consider these two main points inside EMA. The challenges posed by
firms in the regulation of environmental impacts must be addressed. The various strategies that
an organisation can use to compensate because of its environmental impacts is valuable for
future growth. The organisation should notice that 'ecological accounting information' rather than
'accounting practices' is examined in the process improvement syllabus. Environmental
accounting is indeed a wider concept that involves the internally and externally collection of
activity knowledge.
For example the company of example, then water pollution, dirty air and many geographical
problems related to the building. These should also be improved due to the time so that the
company can be improved with respect to the environment and increase the working efficiency
of the company.

Management environmental cost important an organization: If seen in the company, it has
become very difficult to take this decision in view of today's environment, how to strengthen the
environmental pollution. Environmental management is beginning to play an increasingly
important role in the protection of our environment as well as public health. Most companies rely
on environmental management systems to improve the performance of their organisation, reduce
costs, gain new customers and improve public image.
The benefits of environmental management systems include: EMA Reduced environmental
incidents improved reputation Provides marketing advantage Improved regulatory performance
Lowers Reduced risk down of fines for non-compliance with environmental legislation Increases
workforce motivation Increases focus and knowledge within the organisation Reduction in
waste, utility waste and waste disposal provides an opportunity to attract new (Eniola and
Entebang, 2015).
Company in identified and recorded of environmental costs: Many of the details used to file
environmental protection accounts can be found by the corporation in the general corporate
ledger. A analysis would demonstrate the expense of supplies, services and waste management to
the organisation, and will make the economy find the best options for cost reduction quickly.
Departmental administrators and senior personnel should be capable of understanding the
individual processes in depth and allow the customer determine how significant expenses are
degraded through multiple operations. Furthermore these administrators will offer advice and
intelligence to support businesses decide the right way to make improvements and during which
time frames they will be introduced. The company should take the following measures to
improve its variable activities. Inside EMA his cost can be recorded from the following points.
Environmental policies of the firm and the director's business name and ultimate concern for
quality concerns (Swift and Piff, 2014). There was no requirement to report major pollution risks
as impairment losses.
With the help of these points, it can be controlled to apply a variable to the company. While
using the 'generally indicates' method, in which the volume of the goods purchased is related to
the commodity production, it is able to determine how often product is lost in production.
Possible cost reductions can be found by this method. In reality, companies charge extra for
groundwater, to first purchase something and second to dispose of it. If reductions are to be

achieved in combination with low water costs, understanding how water is consumed and also
how use will be decreased is crucial for companies. In context of company transportation of
services and goods, protecting the environment management may also help define savings. At a
basic level, an organisation should invest in cars that are more energy efficient. For example, if
we talk, instead of replacing the printer toner of the computer, it can be filled so that
environmental damage can be avoided (Filser, Kraus and Märk, 2013).
Many types of companies do not pay attention to environmental accounts. Because of this there
are losses. If tried, some companies may include environmental auditing and reporting. So that
the environmental pollution accounting cycle could improve. The systems or goods that offer
ascent to them have environmental consequences. Organizations can only create well-informed
strategic plans about potential success effectively when doing this. With the support of these
substitutes on EMA reporting, the organization must take judgments. Cost savings: reducing
unnecessary production capital use has a clear positive effect on cost reduction.
 Making investments in systems that minimise the risk and expense effect of loss, as well
as the requirement to minimize resources or wipe up environmental effects, to cut the
price of incompetence.
 Enhancing the organization's image: This will help it to recruit better talent, decrease the
turnover of talent as well as charge a premium. Recognize the influence on the planet,
growth prospects and associated financial effects. Assign rights to people for changes.
Agreement on decisions and goals. Build processes and procedures for energy
performance monitoring, reviewing and reporting.
PART 2
Decision-making: The process decision-making (also pronounced preference and decision-
making) is thought to become the logical process of behaviour that leads throughout the
selection, either logical or unreasonable, of a conviction or a plan of treatment against several
possible different ideas. It is necessary to take precise measures in the field of financing so that
company can maintain itself in a competitive world (Cho, Chung and Young, 2019). Rising

incomes this type of judgement and obtain financial statements from different sorts of internal
management provided by management accounting.
Creation and competitiveness are two main priorities in any enterprise. In any way, any role in
the company contributes to the effort to attain these objectives, with certain positions doing more
aggressive roles than others. Accounting managers hold among the most advantageous and
economic expansion roles in a business (Hammer, 2015). Creation and competitiveness are two
main priorities in any enterprise. In any way, any role in the company contributes to the effort to
attain these objectives, with certain positions doing more aggressive roles than others. Accounts
payable hold among the most advantageous and growth-focused roles in a business. There are a
few multiple stakeholders for people in this position, also referred to as organisational managers
to help businesses make internal decisions that lead to profitability and growth.
Via numerous internal studies, management accountants collect crucial data on business and
non-financial factors, such as:
Cost accounting analysis- This is a type of report that contains both the expense on a particular
production process including the sum of the total costs (Hou, 2019). The aim of making this task
is to assist organisations with information on the expense of various operations.
This report is discussing about the planning tools which are also provided under the management
of accounting in order to support the business actions. These are the instruments which helps in
guiding the organizational activities which are related to the implying to an initiative, or a
program. It also supply a detailed information on the plans of the company and how it as created.
Planning tools may include:
1. Organizational deadlines
2. Action product checklist
3. Things required in checklist
4. Sample meeting technique
The process of management accounting is a series of procedures which are useful in examining
the income, expenditure and non-effective procedural record so that the initial managerial reports
which can be formed and supplied to the top management in order to support the variety of
decision making powers. Some planning tools are used to remove the financial problems
occurring in the businesses (Tuan Mat and Smith, 2014).

Cash flow budget: cash is most critical problems occurring in the business as it is linked with the
demands of the working capital and a shortage of cash might be a concerning issue for the
business. Cash flow budget is the part of budgeting practices which are considered to figure out
the future figures of financial components by evaluating the current assets. Cash flow budget can
be used in removal of financial issues as it supplies base-full details on the allocation and
acquisition of funds.
Variance analysis: it is recognized as the series of analytical information which are made
available for a business in order to measure the previous budget standards which are contrasting
the original outputs. They are also useful in removal of the financial issues as the shortage of
efficient and improper planning are the crucial factors leading to the financial problems in a
business, and if both these factors are removed from the process of the organization by the usage
of variance analysis.
Appraisal techniques: there are couple of appraisal techniques which can be used by the
organization to exactly figure out the existence of capital projects. These tools can also be used
in removal of financial problems such as the inappropriate investment discussions can be the
major factor for the financial problems in many business. Through applying the appraisal
techniques, the project can be evaluated accurately and the decisions can be made so that the
threat of the financial issues emerging can be removed (Ganta, 2014).
Relevancy of budgetary control: The mechanism of budgetary control helps the senior managers
to make sure that the spending limits are sufficient. This control is quite efficient as spending in
extra will have unfavorable implications on the corporate benefits. The budgetary control also
makes sure that the cash outflows that is the payment and the cash inflows that is the receipts
which persists at sufficient phases. A statement of cash flows signifies that cash flow from
operating activities, investing activities and financing activities (Vasile and Man, 2012).
To use the forecasting techniques- It is one of the importance of budgetary control that along
with this the forecasting techniques can be used. There are departments which are working hard
for evaluating the best results for the future. This department includes accounting department,
statistical department and management department.
Effective utilization of company’s resources: A company can only use its resources effectively, if
anyone will stop the misuse of the money of the company. If budgetary controlling technique is

used in company, at that period of time no action is taken before making the budget. Responsible
employee of the company will be accountable to this action.
KPI relevancy in improving the financial performance: The main aim of the KPI is to manage the
progress regarding the accomplishment of the strategic aims which are typically interacted in a
strategic map. The main and the major step to which KPI are aiming is to articulate a clean and
clear understandable mission statement by which the company’s goals can be figured out. KPIs
requires the content which is more effective and this can only be possible if one has explain not
only what they are estimating but also why they are estimating it. The major key objective of
KPI is one needs to entail something strategic regarding what the organization is attempting to
do so and it can also allow to learn about the company’s business model just by accessing at their
KPIs (Bouten and Hoozée,2013).
Business financial sustainability: From a financial point of view, the financial sustainability can
be defined as the capacity to progress, grow and to co-ordinate with the staff business along with
short and long term stabilities. A business which has attained the financial sustainability is the
one that is selling an item or service at a range that not only hides their expenses but also
generates some profit. To make business sustainable there are few points in relation to it:
1. Financial resilience: It aims to work under the profitability, as this is what the actual
financial sustainability appears as. Financial sustainability is a good business.
2. Regulatory resilience: Investing in compliance. It is quite expensive, but investing in
good appropriate and financial advice is necessary. Formulating new foundations for the
business for resilience as one progress which stops one from the expensive altering to
correct the weaknesses which was highlighted as were mentioned.
3. Product and market share resilience: making sure that one is building up strong
connections, feedback loops and various reliable is information to inform about the
product and market decisions (Langfield-Smith, Thorne and Hilton, 2018).
CONCLUSION:
On the basis of above discussion, it has been concluded that the environmental accountant
management addresses the information of management which are the needs of the managers for
the activities that is affecting the environment along with the environmental linked impacts on
the corporation. The management information might include the identification and estimation the
cost of environment related actions. It also identifies and monitors the use and the cost of sources

like water, electricity etc. so that the cost can be minimized. Ensuring that the environmental
considerations form the piece of capital investment decisions. Whereas the environmental
accounting targets on environmental management accounting, the major advantages comes from
the area of environmental management accounting methods. This kind of accounting addresses
on collecting, evaluating and examining costs related with the usage of energy and physical
materials (Fullerton, Kennedy and Widener, 2013).

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