Marks & Spencer: Management Accounting Systems and Financial Analysis

This report delves into the realm of management accounting, exploring its significance in organizational decision-making, particularly within the context of Marks & Spencer. It examines various management accounting systems, including cost accounting, inventory management, job costing, and price optimization, highlighting their benefits and applications. The report further analyzes different reporting methods like job cost reports, profit and loss statements, inventory reports, and budget reports, critically evaluating their application. It also explores the advantages and disadvantages of planning tools used for budgetary control and compares how organizations adapt management accounting systems to address financial problems. The report provides a comprehensive overview of how management accounting aids in financial planning, performance management, and effective decision-making, ultimately contributing to organizational success.

Unit 5: Management
Accounting

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
Article...................................................................................................................................................3
P1 Background of management accounting.....................................................................................3
P2 Management accounting reporting..............................................................................................7
Critically evaluating MA systems and reporting along with their application.................................8
Income Statement.................................................................................................................................8
P3 Application of different types of cost analysis techniques..........................................................8
Financial Report.................................................................................................................................13
P4 Explain advantages and disadvantage of different types of planning tools used for the
budgetary control............................................................................................................................13
P5 Compare how the organisations are adapting the management accounting systems for
responding to the financial problems.............................................................................................17
CONCLUSION..................................................................................................................................19
REFERENCES...................................................................................................................................20

INTRODUCTION
Management accounting refers to accounting process which includes combination of
financial as well as non financial statement for enabling the organisation to make effective
decisions. Managers use MA information for managing the different operations and activities by
having effective control over the costs. It plays important role planning, performance management,
integrated financial records and sound decision making.
Marks & Spencer is multinational retailer having headquarters at London, England which
specialise in selling clothes, food products and home products. It is listed over London Stock
exchange. Company has net revenues of 10181.9 million and net income of 27.4 million. It is
present over 1463 locations. Report includes MA accounting systems and requirement and the
reporting systems used by company. Report will address the different types of costing techniques
for making income statements. It will provide about the different planning tool in budgetary
systems for managing the resources of company. Lastly it will provide about the financial issues
faced by the organisation and how MA systems help in resolving the financial issues.
Article
P1 Background of management accounting
MA means to the representation of business operations & the financial information for
internal management of company (Shields and Shelleman, 2016). It refers to applying professional
and the knowledgeable skills in formulating accounting & the financial data in such a manner that
would help an internal management in framing the policies, planning & controlling the activities of
an enterprise. It aid the management in taking most suitable & the best decisions relating to daily
activities of business concern.
Basis of comparison Management accounting Financial accounting
Aim The MA information is used
by the internal management
for taking business
decisions.
The aim is to provide
information to the external
users which includes
creditors, investors, financial
institutions etc.
Compliance Management accounting is
the internal report, there is
no set standards to be
followed (Hlaciuc and et.al,
Financial report is required
to compile with different
standards before showing

2017). the result.
Independent audit There is no prerequisite yet
the management can take
initiative so as to lead an
independent review.
The independent audit is
mandatory.
Management accounting systems
Cost accounting system- It means the system that keep a track on production activities by
making use of perpetual system of inventory. This system is means to simplify the work of the
producers, who are required to keep a trace on the cost incurred in producing or manufacturing a
specific product. Management make use of the cost accounting systems for estimating product cost
in order to evaluate the profits, valuing inventory & controlling the cost (Taylor and Scapens,
2016). It allows Organization in checking raw material at every stage of a production and helps in
lowering the cost of business operation through controlling and determining the relevant items. This
system enables in understanding closing value of a material, finished goods and the WIP in framing
the final report.
Benefits:
 Cost accounting system assists in recognizing the productive and non - beneficial exercises
of the business.
 The information furnished in respect to the various expense related with various processes
aids in future planning and management.
 This approach helps in determining the benefit or loss on account of each item individually.
 Cost accounting framework assists in exercising control over the inputs and other various
business supplies different business supplies.
Application
 This system is mostly beneficial and useful for the manufacturing concerns for effectively
and appropriately implementing and recording various costs in relation to the production of
the goods.
Inventory management system- This MA system oversees an inventory & stock items of the
company. This system plays an essential role in assessing the need of material and in automating the
ordering. Through this system, Organization could be able to track the flow of inventory within

overall supply chain management starting from transit to reaching it with ultimate customers. It
helps in understanding the assets & in maximizing their potential by improving the business
activities and increasing amount of profits.
Benefits:
 The major advantage of this system is that it provides assistance to the organization in
effectively managing its inventory very easily which results into cost saving, time, efforts
and money as well. The instability prevailing in the market leads to variation in the
inventory level continuously, therefore, this system assists the organization in avoiding the
chances of risk of human errors as it is fully automated.
 It helps in appropriate management of stock and the delivery of the same within the specific
time frame which results into making customers happier and more satisfied.
 This system provides assistance in eliminating the unnecessary cost that is occurred because
of the human error and it also assists in additional cost saving, for instance, shortening the
lead time by effectively maintaining a good relation with its suppliers and vendors.
Application
 The inventory management system can be utilized by organization for measuring,
monitoring and managing its stock level in a cost-effective manner which results into cost
savings.
Job costing system- It includes the practice of accumulating an information in relation to
cost attached with particular job or production. This information might be required for submitting
information relating to cost to the customer under the contract where the costs have been
reimbursed. It acts as the most useful system for Organization as it helps in identifying accuracy
level of its estimating system that need to quote the prices which allows for the reasonable profit.
This kind of information could also use for assigning an inventory costs in manufacturing the
goods.
Benefits:
 The job costing system provides support in assigning cost individually to each and every job
undertaken for producing the product and also helps in determining the profits.
 This framework also helps in analysing the performance level of its staff which as a result

helps in gathering important information on the basis of which the performance of the
employees can be evaluated on account of efficiency, productivity etc.
 It assigns the specific cost to the right account which leads to proper and appropriate
recording of the cost with respect to each job through which a product goes through.
Application
The job costing method will help organization in evaluating its profits on account of
different jobs undertaken by it.
Price optimization system- It refers to the mathematical program that computes the way in
which the demand varies at the different level of price and helps in analysing the optimal pricing at
which the customers might count as affordable. It allows the firm in using the pricing as the
powerful lever that often seen as underdeveloped (ПАНЧЕНКО, 2018). This assist the company in
tailoring the prices for customer sector through stimulating the manner in which the target audience
would respond to the price changes with the data-driven scenarios.
Benefits:
 This framework assists the management in focussing on the important goals which are more
relevant for growth and success, for instance, margin of sales, conversion rate etc. This helps
in analysing the benefits which is being attached to it in an effective manner.
 It also helps organization in taking fast and informed business decisions by analysing and
evaluating the different consumer buying patterns and the changing trends.
 This approach leads to the reduction in the manual work which consequently results into
reduction in the human errors, leading to generating data which results into attaining more
accurate forecasting.
Application
The price optimization process will help the organization in taking informed business
decisions where it can set the price of its products in such a way that it will help in maximising its
profits.
P2 Management accounting reporting
Job cost report

It is used in evaluating the projects against the set standards. This works on evaluating the
total cost incurred in a particular project in respect to the revenue estimated. It is utilized in
evaluating the profitability associated with each job undertaken. This helps the business in
focussing in only these jobs which are profitable. This report assists the management in determining
expenses at the right time so that action scan be taken to control it.
Profit & Loss statement report
It is prepared at the end of the specific period or mainly the accounting year. Which shows
the revenue, cost, expenditures incurred in that period. It is mainly prepared as it is required for the
public company to publish it quarterly (GUŢĂ, 2017). Also, it can be further used in identifying the
trends, comparing the performance with the past years and quarters and in identifying any potential
threats in terms of cash flow of the business.
Inventory and manufacturing report
This MA report provides complete summary of the existing inventory level of the business
entity. This provides knowledge and idea to the management in in respect to the how much
inventory is currently available with the business; which product is being sold at the faster ate along
with the performance in various categories. Business organizations tales into consideration the
information provided in the report for the purpose of making future projections on account of
inventory required. This report also helps in determining any wastage or defect in the stock and
identifies the area requirement progress. This leads to effective utilization of resources.
Account receivable aging report
It is utilized by the management of the organization for the purpose of managing the revenue
of the business where goods are being sold to the customers on credit. It provides complete details
of the customers along with the amount due, due date etc. This helps the organization in identifying
the future losses that may arise because of non-payment of due amount from its customers.
Therefore, timely provision for doubtful debts can be created for the same (Yao and Deng, 2018).
Apart from this, this will provide support to the management in making changes to its credit policy
which will result into effective management of the its debtors and avoid the default in payment.
Budget report
It is a standard document which is states about the forecasted income and expenditure for
specific period. Under this, the actual performance and the standards set by the business

organization are compared and evaluated in order to determine if there is any deviation. In case,
there is difference, remedial steps are undertaken to mitigate the difference (Rogulenko and et.al,
2016). This report is also useful in determining the whether the expenditure is very high or low so
that initiatives can be taken for exercising control over it. The budget reports vary every year and
also from one organization to another which is because of difference in the goals of the
organization.
Operating budget report
This budget report involves all the revenue and expenditure of the business over a specific
time frame which can eb a quarter or a year. This used by the businesses for formulating financial
plans for carrying out its business operations smoothly. It is prepared in advance of the reporting
period which is considered as a goal to eb achieved by the business. It is prepared separately to
create plans for various functions or areas of business such as sales, production, overhead and
administration expenses.
Critically evaluating MA systems and reporting along with their application
The MA system assists the business entity in running the business operation effectively. The
various types of MA system provide support to the organization for attaining greater profits along
with minimising the cost elements. The integration of MA system and reporting will result into an
integrated system which will assist the organization in effectively evaluating the performance and
productivity resulting into taking improved and better decisions considering the goals and
objectives of the business and the MA reports provides direction to the management for
implementing right strategy. All this together will result into increasing the efficiency level of the
business.
Income Statement
P3 Application of different types of cost analysis techniques
Cost and cost analysis: The cost refers to the amount being spend by the business for producing the
product and cost analysis refers to the process for analysing the cost to output relationship (Datar
and Rajan, 2018). There are different types of cost which are stated below.
Fixed cost: This is the cost which the company is required to pay irrespective of production
is going on or not.
Variable cost: This cost depends upon the level of production.

Direct cost: It is the cost which is directly related to the production of the product such as
materials and labour (Bragg, 2016).
Indirect cost: These are the cost which are not directly related to a particular production like
rent insurance and so forth.
Finance costs
Interest on bank borrowings 0 Indirect
cost
Variable
cost
Interest payable on syndicated bank facility 2.3 Indirect
cost
Variable
cost
Interest payable on Medium Term Notes 78.2 Indirect
cost
Variable
cost
Interest payable on lease liabilities 139.3 Indirect
cost
Variable
cost
Ineffectiveness on hedge accounting 0 Indirect
cost
Variable
cost
Unwind of discount on provisions 4.9 Indirect
cost
Variable
cost
Unwind of discount on partnership liability to the Marks & Spencer
UK Pension Scheme
6.9 Indirect
cost
Variable
cost
Total 231.6
Employee cost
Wages and salaries 1263.
7
Indirect
cost
Variable
cost
Social security costs 80 Indirect
cost
Fixed cost
Pension costs 72.9 Indirect Fixed cost

cost
Share-based payments 18.5 Indirect
cost
Variable
cost
Employee welfare and other personnel costs 51.8 Indirect
cost
Variable
cost
Capitalised staffing costs -22.5 Indirect
cost
Fixed cost
Total 1464.
4
Employee benefit expense
Current service cost 0.2 Indirect
cost
Variable
cost
Administration costs 4.5 Indirect
cost
Fixed cost
Past service costs 0 Indirect
cost
Net interest income -23.6 Indirect
cost
Fixed cost
Total -18.9
Selling and administrative expenses
Employee costs 1411.
2
Indirect
cost
Variable
cost
Occupancy costs 377.7 Indirect
cost
Fixed cost
Repairs, renewals and maintenance of property 81 Indirect Variable

cost cost
Depreciation, amortisation and asset impairments and write-offs 632.5 Indirect
cost
Other costs 534 Indirect
cost
Variable
cost
Total 3036.
4
Purpose Formula Application
Total direct materials Total Direct Material = Material A + Material B
etc
5000 + 7500 + 13000
= 25,500
Direct materials cost
per unit
Cost per unit = Total direct material/number of
units
25,500 / 10000 = 2.55
Direct wages cost per
unit
Cost per unit = total direct wages/ number of
units
20/60*9 = 3
Total variable
manufacturing
Total = cost of variable utilities + cost of
packaging etc
3500 + 5000 + 1500 =
10,000
Variable manufacturing
cost per unit
Cost per unit = Total variable manufacturing/
number of units
10,000 / 10,000 = 1
Total fixed cost Total fixed production = total rent + total
interest on borrowing + total machinery hire etc
100,000 + 5000 +
25000 = 130,000
Fixed cost per unit Cost per unit = Total direct fixed cost/ number
of units
130,000 / 10,000 = 13
Income statement under marginal costing
Sales revenue (10000*35) 350000

Marginal cost of sales
Direct material (10000*2.55) 25500
Direct labour (10000*3) 30000
Variable production overhead (10000*1) 10000
Contribution 284500
Fixed cost
Fixed manufacturing overhead 130000
Net profit 154500
Income statement under absorption costing
Sales revenue (10000*35) 350000
Marginal cost of sales
Direct material (10000*2.55) 25500
Direct labour (10000*3) 30000
Variable production overhead (10000*1) 10000
Fixed manufacturing overhead 130000
Contribution 195500
Net profit 154500
CVP analysis
It is used in evaluating the impact of change in level of activity and cost on the operating
profit (Stoenoiu, 2018). It used in identifying the level of activities at different volumes.
Contribution margin = £35 - £6.55 (2.55+3+1) = £28.45 per unit for writing off all the fixed cost.

Contribution margin ratio = Contribution Margin / Sale price = 28.45/35 = 81.2%
Variable Expense Ratio = Total variable costs / Sales = 65500/350000 = 18.7%. the sum of
contribution margin ratio and variable ratio is equal to 100%.
Break-even point
The break-even point is used by the organization in case of business expansion or new of
new product in the market (Batkovskiy and et.al, 2017). It is used in determining the selling price
per unit and point after which company starts earning profit.
Break Even Point = Total fixed costs / Contribution Margin per unit = 130000/28.45 = 4569 units
This means the company is required to sell 4569 units to attain the position of no profit no loss.
What if analysis
This is useful for organization in order to analyse the effect of changes in sales behaviour on
the net profits of the company. This helps company in taking effective decisions.
(a) Number of units = (fixed costs + target profit) / Contribution Margin per unit =
(130000+300000)/28.45 = 15114 units to be sold to attain the target of £300000.
Sales revenue = (total fixed costs + target income) / contribution margin ratio =
(130000+300000)/81.2% = £529556 is the revenue needed to earn the target profit.
(b) Number of units = (fixed costs + target profit) / Contribution Margin per unit =
(130000+350000)/28.45 = 16871.4 units to be sold to attain the target of £300000.
Sales revenue = (total fixed costs + target income) / contribution margin ratio =
(130000+350000)/81.2% = £591133 is the revenue needed to earn the target profit.
It seems that the organization is profitable in as it is generating under both the methods. It is
important to prepare such reports as it helps in determining the crucial aspects of costs and expenses
so that decisions can be taken based on it.

Financial Report
P4 Explain advantages and disadvantage of different types of planning tools used for the budgetary
control.
Planning tools refers to the tools that helps management in efficiently planning the strategies
of the organisation. Planning tools in the budgetary control involve various tools that make the
management to manage the resources of company in most efficient manner. ABC company uses
budget for estimating future results of the business with financial position of the entity for particular
period of time. Company prepares budgets usually for the future planning, measurement of
performance, rolling out the new products & services and the controlling processes. Budget enables
business to estimate financials needs of the enterprise. Company provides that the organisations
which review the budgets to keep eye over reality are capable to assess the reasons of variances in
actual results like planned before.
Planning budgets are referred as frameworks which support the strategy planning that are
based over cost and revenues for organisations over particular time period. Control refers to process
to use the feedback over actual results or performance, comparing actual outcomes with planned,
allowing organisations over taking corrective actions for brining the future activities aligning the
budgeted plan (Fiondella and et.al., 2016). There are different types of planning tools that could be
used by ABC for preparing the budgets. The below budgets enable organisations to effectively
manage the different activities to be carried out during the year.
Operating Budgets - It is a budget which portrays expected costs expenses, expected revenues and
the estimated income to consider quarterly or annual performance.
Financial Budgets – It is the estimate of cash expenditures, cash budget and the balance sheet items
of the firm such as assets & liabilities or the owner investment.
Capital Expenditure Budget – It is a formal plan which states timing and the amount of capital
assets to be purchased by the organisation.
Master Budget – This is the main budget containing information of all the three budgets which are
operating, capital expenditure and the financial budget (Ibrahim, 2018).
Long Term Budget – It is the financial plan which extends to over more than a year in future to
achieve long term goals.
Short Term Budget – This financial budget is prepared for period of less than 1 year for attaining
short term goals.
Fixed Budget – The financial budget do not change during budget period, irrespective of the
changes in the actual operational outcomes experienced.
Flexible Budget – This is budget which allows change in the budgets of company as per actual
changes in revenue levels.

Methods of Budgeting
Budgeting enables the company to make effective allocation of the resources to different
activities and departments. It is essential for the business to have the most appropriate method for
making the projections over the costs and expenses of the entity. Business generally uses
incremental budgeting which is a method used in traditional budgeting. Different types of budgets
that could be used by the management are :
Incremental Budgeting
It is a traditional budgeting method where budget is prepared by taking actual performance
or budget of current period as base with the incremental amounts and then adding them to new
budget periods. The incremental amounts refers to the adjustments like the inflation or planned
increased over costs and prices. Managers considers various factors such as market conditions,
supply and demand and such other factors that could influence the budgets. This budget simply
makes adjustments in existing budget and every adjustment made in the budget is required to be
justified by company.
Advantages
The method of budget is easy to measure and calculate. It considers the internal as well as
external factors influencing the budget. This method consumes very less time and simple if the cost
drivers are not changing.
Disadvantages
This method does not encourage the cost efficiency. As the budget is based over previous
budgets managers could overstate or understate the budgetary requirements. The method do not
considers external drivers in price fluctuations.
Zero Based Budget
It is a management accounting technique which involves making of budget from scratch
with base as zero. This includes re – evaluating each line item of the budget and to justify the
expenditures that are incurred by department. It is also bottom up method where the departments
assumes to have the zero expenses & additional expenses are required to be justified before they are
included in the budget (Egbunike and Unamma, 2017). Budget is used by companies over
processes that are prone to several market influences and changes. The budget is used by the
company to make effective allocation of the resources analysing all the factors associated with the
budget.
Advantages
The budgeting method s highly effective at the time of financial difficulty and during the
restructuring of the financial processes. It enables the management to have strict control over the
business.

Disadvantages
This budget is very time consuming as the budget is prepared from starting each time.
Method is not practical over the necessary operating costs. Considerable time of the managers is
spent over preparing the budget and is also expensive.
Value Proposition Budgeting
This is based over thought process that makes sure that every cost or expenses which are
included in budget are delivering value to the business. It aims at avoiding the unnecessary
expenditures and costs of the business. The budget is not solely aimed at goals like zero based
budgeting or financial budgeting. The objective of budget is of considering every cost or expenses
which delivers value to organisation.
Advantages
This is the only budget that considers value which will be provided by incurring costs. The
method avoids the unnecessary expenditures that are consuming cost and not adding value. The
budgetary approach reduces the overall cost of entity.
Disadvantages
The method is time consuming process and only accounts for the explicit values of outputs.
The budget could be prepared by highly trained staff without making effective use of the resources.
Budget do not consider the main objective of the organisation to expand productivity and
efficiency.
Activity Based Budgeting
This is the approach used for determining costs which are needed for achieving the set
outcomes or the objectives. This is a method of budgeting that prepares budget based over the
activity based costing. It is prepared considering all overhead costs (John and Eeckhout, 2018).
This is a method of MA that do not uses budget of past year for arriving at the current budget. The
method is considered used by the management for making budget for all the activities separately.
Advantages
The method reduces unproductive costs from the budget. In this method departments are
accountable for their budgets and eliminates the unnecessary operations or combines processes for
reducing costs. The method helps company in meeting all the costs and expenses by effective
allocation of the resources.
Disadvantages
The budgetary method only focuses over the short term goals instead over long term
strategies which will derive benefits. The process is also time consuming. All the activities are
required to be previously identified and it do not provides more space for the unexpected change.
Costing Systems

The costing systems are used for calculating overall product cost per unit that is essential for
creating the budget. Mainly there are three costing systems.
Actual Costing
In this costing method actual costs that are incurred by entity are used for arriving at total
cost of production or cost of final product (Nafisatu, 2018).
Advantage - This is simple costing method that do not require preplanning of the standard costs.
Disadvantage – It takes considerable time in calculating the value of closing inventory.
Normal Costing
Actual costs of the direct materials, actual costs of the direct labour and manufacturing
overheads are applied in this method using predetermined annual rate of overheads.
Advantage – The method is reliable and assumes that the calculations of the overhead are accurate.
Disadvantage – This costing method do not allows for the large variances and due to this
unexpected expenses are not included in budget.
Standard Costing
The costing method calculates the costs using the predetermined materials, labour and
production costs. Variances identified in the costing technique are reviewed by the management at
end of period.
Advantages - The method is effective in controlling costs and expenses of the enterprise and also
helps in decision-making.
Disadvantages - This could cause the departmental inefficiency if only large variances are
investigated by the management.
Pricing Strategies Penetration pricing – This is a pricing strategy where firms keep prices of products lower
until they are established in the market. Skimming pricing – In this strategy price of the product is kepy high in initial period and is
gradually decreased over time. Promotional pricing – Firms in this strategy keeps the prices low in starting an gradually
return back to normal level over time. Destroyer pricing – The strategy suggest companies to keep prices low for eliminating the
competitors rather than raising.
 Demand oriented pricing – Prices of the product are set as per the demand. High when
demand is high and low when demand is low.

P5 Compare how the organisations are adapting the management accounting systems for responding
to the financial problems.
Identifying Financial problems
Corporations today face issues in adapting the business models, procedures and strategies
for responding to the social and environmental changes establishing values for shareholders and the
financial success of the organisation. Companies are required to identify the financial problems
using different tools so that appropriate steps could be taken for removing those issues.
Benchmarking
It refers to practice that is used for identifying the financial issues faced by company. The
tool compares the actual performance of process with the standard performance goals or benchmark
figures (Ibrahim, 2018). This technique is highly effective in measuring the performance and
identifying the areas due to which the variances are caused by the business. On the basis of
variances steps are taken for reducing the issues faced by the business.
Key Performance Indicator
It refers to measurable value which demonstrates the effectiveness of company in achieving
business objectives within the specified time. KPI's are used by the organisation at various levels of
the business to evaluate the success in reaching the targeted objectives. This is used by the
organisations to assess whether the required level of success is achieved or not so that possible
actions could be taken on the issues.
KPI's, benchmarking and variances of budgets are used by the organisation as means to
identify the potential financial problems. Potential issues are there in the efficiency, productivity or
viability of the business on the following outcomes.
 If performance of department or company is below the benchmark levels.
 If the KPI's set by the management are not achieved by the entity
 There are big or unexpected variances in the budget between actual and budgeted figures.
Management can identify the financial issues by monitoring the progress of KPI's,
benchmarks and budget and intervening in the places for reducing the risks to organisation.
Financial Governance
It is the process that involves managing, collecting, controlling and monitoring the financial
information. It includes how the companies will be tracking financial transactions, managing the
performance and controlling data, operations, compliance and disclosures. It is essential for the
organisation to have governance procedures for monitoring the financial information and preventing
the financial issues in advance (Henning, 2017). Organisations are required to review as well as
control procedures at workplace for monitoring the effectiveness of the financial governance
Effective strategies and systems

Organisations are required to identify the potential financial issues and problems for which
they will be required for implementing the systems and strategies for increasing the performance
and reducing the financial risks. It could be done by various methods such as
Identifying environmental and social trends that impact the capability of organisation in building
value over time using the strategic tools like PESTLE, SWOT or Porter's 5 forces. They can
establish KPI that support the strategic and sustainable goals to incease productivity. Organisation
should also generate reports that includes information over the financial position of company to
provide budgeting and pricing decisions, investment appraisals and strategic planning. Reviewing
the costs and pricing strategies in comparison with their actual performance.
Comparison of organisation in meeting the financial problems
Comparing the organisations using MA techniques for resolving the financial issues
TESCO NEXT PLC
Management a/cing systems are used by Tesco
as benchmarking tool to identify the key areas
in which company is ahead. It enables the
managers in improving the standard of
operational practices. MA is used for
streamlining the internal benchmarking. In
Tesco measurement of financial success is
citical and often considered as essential for
managing the activities. By improving the MA
techniques Tesco could found sound
controlling and monitoring facility for financial
governance (Ban, Seabrooke and Freitas,
2016). The company also uses promotional
pricing strategies for the products for seeking
attention of increased customers. Using this
company also clears the old stocks by earning
margins. Using the tools and techniques of MA
it is achieving the goals and objectives of
business resolving financial issues.
Next uses KPI's for evaluating the financial
performance of various processes and
departments. Techniques of MA accounting
provides important information for sound
decision making in the business. Managers
could identify the profitability of various
processes and operations so that effective
strategies are taken by company. It enables the
company to overcome financial issues faced in
the processes. Information provided by the
KPI's is used to identify areas where it is not
meeting the standards. Those areas are
analysed and more efficient strategies are
implemented to achieve the goals and
objectives of the business. Company uses
skimming pricing for its product. The company
has high acceptance in market that enables it to
get prices demanded for product and lowering
them when demand goes down.
The MA tools and systems enable the management in generating sustainable growth by
overcoming the financial issues faced by them. Benchmarks and KPI helps in identifying financial

problems and the financial governance makes the departments to ensure that the processes are
carried out reducing the variances.
CONCLUSION
It can be summarized for the above that MA system is very crucial for the business entity
which with its various types of systems provides support to the organization in dealing with
different business requirements. The various forms of reports like budget report, operating budget
report etc. This results into better management of financial resources of the organization. The
various types of planning tools that can be used for exercising budgetary control. Also, the
strategies like benchmarking, KPIs and financial governance can be used in effectively dealing with
the financial problems.

REFERENCES
Books and journal
Ban, C., Seabrooke, L. and Freitas, S., 2016. Grey matter in shadow banking: international
organizations and expert strategies in global financial governance. Review of International
Political Economy. 23(6). pp.1001-1033.
Batkovskiy, A. M. and et.al, 2017. Statistical simulation of the break-even point in the margin
analysis of the company. Journal of Applied Economic Sciences, Romania: European
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