Financial Health and Resource Management Report: Stortford Yachts

This report provides a comprehensive financial analysis of Stortford Yachts Ltd, covering the differences between financial and management accounting, the purpose of financial statements for profit and non-profit firms, and the requirements of various stakeholder groups. The report includes an assessment of Stortford Yachts Ltd's financial health, along with recommendations for improvement, such as managing costs and stakeholder relationships. The analysis examines key financial ratios, the debtor collection period, and the importance of effective cost management techniques. The report emphasizes the need for the company to manage stakeholders effectively and efficiently allocate resources to enhance profitability and sales. The conclusion highlights the importance of financial statements in analyzing profits and making informed decisions, leading to improved financial performance and business growth.

MANAGING FINANCIAL
RESOURCES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Difference between financial and management accounting........................................................1
Financial statements purpose in profit and non-profit firm........................................................2
Various stakeholder group and determining different requirements of information..................3
TASK 2............................................................................................................................................5
Financial health of Stortford Yachts Ltd.....................................................................................5
Report..........................................................................................................................................7
RECOMMENDATIONS.................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Financial and management accounting reports are necessary for the firm in order to
control and manage various operational activities that will help to increase profitability. The
report will cover difference between management and financial accounting. Financial reports
purpose, requirements and management of stakeholders is also covered in this report. A brief
discussion on Strotford Yachts Ltd. Will be explained in this report associated with financial
position of the business. Cost management techniques will be discussed in this report that will
help to develop and improve operational activities effectiveness and financial health of business.
TASK 1
Difference between financial and management accounting
Financial accounting: Financial accounting refers to make financial statements that helps to
provide financial information and data to take decisions appropriately and effectively. Financial
statements are made for stakeholder, suppliers, creditors and consumers. This will help take
financial decisions in order to increase business operational activities. Financial accounting is
based on principles and assumptions such as consistency, realisation, materiality and matching as
well as costs (Ammary, 2015). These statements are made at the end of the financial year in
order to determine performance and profitability.
Management accounting: Management accounting is also known as managerial accounting that
helps to provide information regarding business cost and financial activities. This will help
Strotford Yachts Ltd with effective management of policies and strategies in order to forecast
daily operational activities. Management accounting takes both quantitative and qualitative
approach. This will help to convert information into useful data which helps to take decisions
regarding financial goals and budget management.
BASIS MANAGEMENT ACCOUNTING FINANCIAL ACCOUNTING
Meaning Management accounting reports will
help to make strategies and policies
which will be done by information.
Financial accounting is mainly focused
on preparing financial stat for
Strotford Yachts Ltd to generate
financial data.
Information Monetary and non-monetary
information only.
Monetary information only.
1

Objectives Effective management strategies and
planning will help managers to take
decisions regarding business
objectives.
This will help to provide information
regarding financial activities to
outsiders.
Time frame Such reports are made as per the
demand and requirements.
Financial statements are prepared at
the end of accounting period.
Reports Complete and detailed information of
organisation operations.
Summarize report of financial
statements and position of Strotford
Yachts Ltd.
Users Internal management. Internal and external both parties.
Management and financial accounting are two various aspects that help business by
providing financial and non-financial information regarding business operational activities.
Financial accounting reserves complete information about financial activities within Stortford
Yachts Ltd. Management accounting helps to analyse the marketing strategy, performance and
preparation of policies and plans in order to make effective decisions.
Financial statements purpose in profit and non-profit firm
Profit business: Profits organisation refers to the aim in which a organisation try to increase its
profitability from regular operational activities (Bogers, Boyd and Hollensen, 2015). The profits
earned by organisation will retained in business activities for the future contingencies, in terms
of distribution or reserve to the owners as a dividend effectively.
Structure of the firm can be joint venture, partnership, proprietorship etc. Such trading
concerns strive continuously for minimising expenses and maximising incomes to increase the
profitability of firm to grow and expand its operational activities. Cash flow statements, balance
sheet and loss statements are calculated in profit firms including the owners equity as well.
Non-profit business: A non-profit organisation, as the name suggests, is a legal organisation
whose primary purpose is to promote public good rather than making profit (Elsom, 2014).
These are founded in common peoples who came together for the same purpose in order to
provide effective and quality services to people and other members. The management committee
2

looks after management that is consists of individual groups selected by members from
themselves.
Non-profit business such as cooperative societies, public hospitals, sports club and
religion institutes. Non-profit business also earns profitability but they used it for the further
concern and aim of business expansion activities (Knight and Harvey, 2015). Financial position
statements, activities statements, change in net assets statements and cash flow statements are
used by non-profit organisations effectively.
Thus, it can be said that financial statements reflects the difference between financial and
management accounting effectively. The profit organisation mainly focused on raising
profitability and production, increasing their assets, return on investments to owners and future
dividends associated with shareholders. Non-profit organisation reports are for effective use of
funds, communities, board members and stability of business. Firms with the objectives of
profitability prepare financial report and balance sheet that will help to list shareholders based on
liabilities and assets. Non-profit organisations make financial reports to assess liabilities, assets
and prior earning.
Various stakeholder group and determining different requirements of information
Stakeholder: Stakeholder can be a person who has something to achieve, gain and lose through
project results and programs and planning success and process effectively. The engagement
process of stakeholders view relationships with business and projects. Stakeholder analysis is a
technique used to assess influence of people and importance as well that has an impact on project
programs success and achievement effectively.
Management of stakeholder is important for Stortford Yachts Ltd that it will help to
manage and control relationship with stakeholders that are managed and controlled by
stakeholder groups effectively.
INTERNAL STAKEHOLDER EXTERNAL STAKEHOLDER
Director of Public Health
Head of Health Intelligence and Information
Procurement
Director of Nursing
Public Health Strategists
Local Authority/councils
Provider
Acute trusts
Patients
Service users
3

Public Health Management Analyst
Director of Programmes and Services
Research Scientist
Communications
Environmental Health Intelligence Analyst
Public Health Manager
Trustees
Board committee member
Customers
Suppliers
Funders
Quality assessor
LINK group
Special interest group
Health visitors/school nurse
Wider public health workforce
Media
Thus, it can be said that key stakeholders among management staff and members should
be identified. Organisation improvement and development or change in agent are responsible to
turn stakeholder influence and build support for the firm effectively. By taking this approach, the
change agent or BI manager can also assess how much support he or she can expect and the most
effective manner in which his or her influence might be used. Demands and needs are
transformed of stakeholders and in a formal set of requirement made by them. This will be in
form of documentary and textual requirement (Knouse and Ramsay, 2018). The transformation
should be managed and controlled effectively, repeatable, rigorous and documented. Thus, it can
be said that Stortford Yachts Ltd should manage stakeholders that will help to manage and
control operational activities of organisation effectively.
Government authorities: It can be said that financial statements are used mainly in government
sectors and departments in order to evaluate profits earned by them and also to conduct tax
payables. This will help business to assess amount in which the tax is paid by firm and
profitability retained by them effectively. Here, the business will disclose all the expenses
incurred in the period as well as the assets and liabilities of the firm in the right state.
Banking agencies: Stakeholder who analysed borrowings, loans, tax payables and interest by the
business over the period. Bank is able to ensue that business is also able to pay interests
according to the requirements (Schwartz, 2016). The examination will help to evaluate
profitability of Stortford Yachts Ltd and also the interest amount paid by them.
Employees: Employees seeks information regarding profits earned by business. It will have both
positive and negative impact over organisation remuneration and payables to them effectively. It
4

will also help to encourage employees from which they will put more efforts. This will help
organisation to its enhance its profitability and growth of production effectively.
TASK 2
Financial health of Stortford Yachts Ltd
5

6

7

Report
From: Assistant Business Planning Consultant
To: Business Planning Assistant
Subject: Stortford Yachts Ltd- Accounts information
Sir,
As per the provided calculation it can be said that, I have analysed performance of
various departments in business in a certain period that will help to determine that there are
several changes occurred in various operational activities and ratios effectively and efficiently.
According to this analysis, it can be said that the firm will develop effective growth and
development as well as improvement for the future time period which will enhance profits and
production effectively. Determination and evaluation of business financial position will be done
by analysis ratio. As per the organisation returns the business applied capital of firm and
collected it effectively. However, in 2015 it can be seen that it was 27.9 in 2016 and 22.5 which
is favourable and effective position made by business. This will also indicate that the payments
of shareholders and investment for business capital is made appropriately and effectively. In
2015 the debtors collection period was 91 and 102 in 2016 that describes the business is not
receiving payments from debtor as it was more capable in last years to recover those effectively.
It is necessary to provide recommendations according to the performance analysis of
business that professionals should plan some strategies that will help towards development and
improvement for managing costs by effective techniques. It can be said that cost management
techniques are useful to provide management of expenses and also reduces the cost of extra
expenses within firm. The ratio should be managed and controlled well between demand and
supply in order to produce significant growth and profitability for the firm. The resources
should be allocated well and according to the cost that it will help to increase fruitful gains
within organisation effectively. Operational activities and cost related to it should be managed
well that it will help to increase capital by managing various operational activities costs and
management. This will also help to reduce extra expenses within firm. Profitability can be
maximised if the firm is managing cost effective techniques to manage and control the cost of
different departmental activities. Thus, it can be said that it will reflect the profits produced by
organisation in a specific time period from which Stortford Yachts Ltd is able to control number
of investors and will provide strengthen towards business capital structure and operational
8

activities. This will lead towards profitability and increasing sales to provide effectiveness to
business operations effectively.
RECOMMENDATIONS
There are some effective changes required by firm in order to manage stakeholders and
making payments to debtors. It can be said that there are number of debtors remains from which
the organisation is not collecting their payments and it is going as huge debts for the firm
(Timothy, 2017). Cost effective techniques are also managed by firm in order to manage and
control cost of different operational activities within firm effectively. The business should also
allocate resources according to the costs for every operations that will help to enhance fruitful
gains within firm effectively. Operational activities are also managed well that will help to
increase production with quality and effective services (Townsend, McDonald and Cathcart,
2017). Management of various resources will also help to enhance sales and will save cost for
the firm which increase profitability and production effectively and efficiently.
CONCLUSION
It can be concluded from the above analysis that the report will help Stortford Yachts Ltd
by analysing profits effectively. Financial statements will help to take financial decisions in order
to increase business operational activities. Management accounting takes both quantitative and
qualitative approach that it will help to convert information into useful data which helps to take
decisions regarding financial goals and budget management. The profits earned by organisation
will retained in business activities for the future contingencies, in terms of distribution or reserve
to the owners as a dividend effectively. Management of stakeholder is important for Stortford
Yachts Ltd that it will help to manage and control relationship with stakeholders that are
managed and controlled by stakeholder groups effectively. Operational activities and cost related
activities should be managed well that it will help to increase capital by managing various
operational activities costs and management.
9