Financial Analysis of Customer Accounts for Nass Corporation - Report

This report provides a comprehensive financial analysis of customer accounts, focusing on tools like variable costs, fixed costs, and target profitability within the context of Nass Corporation. It examines the importance of managing customer accounts, exploring concepts like lifetime cash flow, and assessing potential variable costs. The report delves into the accounting management system of Nass Corporation, evaluating methods such as fixed overheads and administrative support. It also includes a financial analysis report, discussing customer value, business risks, and key variances for maintaining internal and external information. The report emphasizes the significance of customer satisfaction and confidentiality in financial management and provides recommendations for improving customer relations and financial performance.

Running head: ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER
ACCOUNTS
ANALYSING THE FINANCIAL POTENTIAL AND
PERFORMANCE OF CUSTOMER ACCOUNTS

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
Table of Contents
Introduction......................................................................................................................................2
Task 1...............................................................................................................................................2
Tools related to financial analysis...................................................................................................2
Calculation of target profitability and examples of cash flow of lifetime (Refer to excel).............3
Assessment related to potential variable costs.................................................................................4
Accounting management system of Nass Corporation....................................................................5
Evaluation of using methods like fixed overheads and administrative support..............................6
Analysis of customer account..........................................................................................................7
Task 2...............................................................................................................................................7
Financial analysis report..................................................................................................................7
Conclusion.....................................................................................................................................10
Reference list.................................................................................................................................11

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
Introduction
Finance is an important factor in order to run organisation in an appropriate way. The
organisations need to manage financial department for increasing their profit in the contemporary
era. At present, in order to provide satisfaction to customers, organisations need to develop
performance of employees in order to bring lucrative outcome. Henceforth, the task seeks to
investigate the tools like variable cost, fixed cost and target profitability for managing customer’s
account properly. Assessment related to potential variable cost and account of customers will be
negotiated throughout the study. Proper calculation would be done and cost management theory
would be used for analysing the study an efficient way.
The problem statement of the study is to analyse the importance of managing customer account
in organisation like Nass Corporation.
Task 1
Tools related to financial analysis
Cash flow of lifetime value
As mentioned by Sleep, Bharadwaj & Lam (2015), value of lifetime cash flow incorporates
conception of present value of products and its future value. It is considered as central to formula
of CLV. In case of Nass Corporation, as it is under construction industry, the authority needs to
make their customer of less than one year old understand about their policy (nassgroup.com
2017). It assists to increase profit of the organisation.
Variable costs
In order to increase profit of venture, organisations need to convince their customers for
increasing their sales in the merchandise market. Variable cost depends on the production of
venture. Henceforth, in order to attract new customers, Nass Corporation needs to highlight their
previous output for gaining faith of new customers.
Target profitability
Organisations set their motto or aim for developing their position in the contemporary
merchandise market. As per the viewpoint of Mullins et al. (2014), organisations need to set their
target for earning positive outcome. In case of Nass Corporation, authority needs to provide
training to their members as they can hold their existing customers. Proper analysis of finance
can hold customers in the venture.
Fixed costs

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
As per the perception of fixed cost, production of venture and its output are fixed. In time of
convincing customers, team members need to know information related to fixed cost for getting
positive outcome. In case of Nass Corporation, employees need to receive proper training related
to financial management for achieving proper outcome.
Figure 1: Financial analysis related tools
(Source: Learner)
Calculation of target profitability and examples of cash flow of lifetime (Refer
to excel)
Target profitability
In order to run organisation in the appropriate way, authority needs to set their target profit in a
year. As mentioned by Post & Byron (2015), if they are able to set their profit, they can try to
meet their aim. Henceforth, using 1 or 2 years old customers, they can fulfil their aim. Customers
can advertise about best service organisation to achieve their aim in prosperous way.
Examples of cash flow of lifetime value
In order to maintain lifetime value of cash flow, the authority needs to provide advertisement
about their activity in the venture. As mentioned by Njenga, Kiragu & Opiyo (2015),
advertisement is and lifetime activity where many people can get information at a time. Lifetime

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
value of cash flow assists to increase profit of venture in the competitive market. Lifetime value
of cash flow develops organisational position in the contemporary market. Hence, they target
their old customers as they can advertise about their services. It helps to attract eyes of
customers. The financial department manages cost of organisation as they can bring
improvement in their performance and service quality.
Figure 2: Lifetime value of customers
(Source: Njenga, Kiragu & Opiyo, 2015)
Assessment related to potential variable costs
The variable cost of venture assists to make people know about the condition of the organisation.
If the organisations have idea related to their variable cost, it leaves impact on the profit of
entity. In order to support the statement, as commented by Kim & Wemmerlöv (2015), if the
organisations are able to increase their variable cost, it reflects their development of profit in the
contemporary decades. The formula of analysing variable potential cost is followed by-
Output’s Total Quantity x Variable cost per output unit = Total Variable Cost
For instance, in case of Nass Corporation, if they receive order of 5000 widgets and their sales
price is around $5000, it reveals their gross profit.
Produced Annual Widgets: 100000
Costs of Raw materials: $10000
Costs of direct labour: $50000
It provides that 10% is the raw material cost from annual widgets and 50% is labour cost.
Henceforth, potential variable cost is = 5000 x ($0.10 + $0.50)

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
= $3000
Therefore, gross profit of venture is ($5000-$3000) = $2000 (nassgroup.com 2017).
Thus, profit of a venture depends on their variable cost. If the organisations are able to increase
their variable cost, they can hold their reputation in competitive market.
Accounting management system of Nass Corporation
According to Baños-Caballero, García-Teruel & Martínez-Solano (2015), proper accounting
management system helps to bring success for the organisation in the contemporary competitive
market. Accounting management system incorporates notion of costs like administrative support
and fixed overheads for increasing sales of Nass Corporation. Management system are followed
by-
Budgeting system for Fixed overhead
In time of increasing expenditure Fixed overhead has been used. However, in this case, the level
of production is kept in same. The examples of overhead fixed costs are insurance, rent, salaries
and depreciation. For instance, if any organisations take a place for $10000 in a month, it is
considered as their fixed cost. In case of Nass Corporation, their expenditure related to labour
salary is considered as fixed overhead. If Nass Corporation is able to prepare their budget list,
they can bring positive outcome for the organisation.
Capital increment system for Administrative support
In time of managing organisational financial department, they need to have theoretical
knowledge related to finance and accounting. However, in order to introduce new conception in
venture, organisations need to increase their capital. Without administrative support, employees
cannot increase their expenditure. Moreover, the workers need to provide proper planning to
their higher authority for managing financial department. Nass Corporation tries to follow above-
mentioned accounting system in order to get prosperity.

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
Figure 3: Accounting Management System
(Source: Learner)
Evaluation of using methods like fixed overheads and administrative support
In opinion of Huhtala et al. (2014), business organisations need to follow specific accounting
management system for increasing profit in the merchandise market. In case of Nass
Corporation, the authority has used budget for allocating proper money in every aspects. Many a
times, it has been seen that organisations do not have appropriate cash in order to implement
their strategy related to business. In this case, planning of budget provides effective outcome for
the venture. In addition to, it determines the authority related to regular expenditure of entity.
Fixed overhead develops organisational profit in the contemporary era. Henceforth, it provided
information related to the fixed expenditure of venture, based on which, authority can take their
decision.
On the other hand, Tzempelikos & Gounaris (2015) contradicted that administrative support is
more important factor than cost of fixed overhead. If administrator does not provide permission
to develop their capital, they cannot bring any kind of changes in venture. In case of Nass
Corporation, they try to maintain administrative support for developing their organisational

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
position. In addition to, administrative support assists to introduce new concept in venture for
increasing their profit in contemporary market.
Analysis of customer account
Customers account helps to make clear conception of consumers related to the service or
products of venture. The customer executive officer provides detail to consumers and tries to
convince them for increase their sales. As per the theory of cost and management, employees
need to make consumer aware of their services as they can attract customers. As opined by
Harden & Upton (2016), if organisations are able to get attention of their customers, they can
bring positive outcome for the venture in the merchandise market. On the other hand, if
customers are able to know the service of venture, they can prefer to use it. Henceforth, it
develops profit of venture. Moreover, the authority of venture can use more than 3 years old
customers as their stakeholders. It is the way of increasing profit of the organisation. If
organisations are able to manage their customer account properly, they can fetch development in
their financial perspective.
Task 2
Financial analysis report
Customer’s value and recommendation
In order to run the organisation in the proper way, the authority of venture needs to provide
importance to the opinion of customers. It assists to provide satisfaction to customers. Several
times, it has been noticed that customers do not express their opinion and therefore, they do not
feel satisfied. Henceforth, Nass Corporation needs to provide importance to their customers for
increasing their sales. Kitching, Kašperová & Collis (2015) stated that if organisations provide
importance to their customers, they prefer to purchase products or take services from venture.
However, in order to grow number of customers, Nass Corporation needs hear words of
customers, who are one year or more than one year old. The authority can set budget for
understanding their expenditure in the contemporary market. They need to manage their financial
system properly for getting fruitful outcome.

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
Figure 4: Recommendation for increasing number of customers
(Source: Learner)
Business risk associated with account and consideration
Confidentiality
According to Tomczyk, Doligalski & Zaborek (2016), employees of financial department needs
to maintain confidentiality in time of preparing their financial report. They do so as they can
compete with rival venture of market. Nass Corporation tries to maintain confidentiality in time
of handling customer account for avoiding risk.
Cost management
Few times, employees are not able to manage their cost. Then organisational authority needs to
take loan from bank or increase shareholders. However, if Nass Corporation is able to manage
their finance department appropriate way, it can remove account related risk in the contemporary
era.

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
Figure 5: Business risk associated with account of customer
(Source: Tomczyk, Doligalski & Zaborek, 2016)
If the business authority of venture is able to avoid business risk related to maintaining
confidentiality, finance management and cost management, they can satisfy their customers.
Nass Corporation needs to handle their customer account in the lucrative way for earning
positive outcome in the contemporary merchandise market. In time of analysing cost, authority
needs to predict about their cost of expenditure like production, wages and purchasing raw
materials and use it for maintaining account.
Key variances for maintaining outside and inside information of Nass
Corporation
In order to identify the key variances in venture, proper observation is necessary. As asserted by
Flammer (2015), organisational authority needs to observe performance of employees for
managing their cost in an appropriate way. If the authority observes performance of employees,
customers feel satisfied. In this case, many a times, authority provides extra wages to their
employees for motivating them.
On the other hand, in order to increase number of customers, business authority can take
customer opinion in time of introducing new things related to their service. In case Nass

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
Corporation, instead of employees, more than 3 years old customers are considered as
stakeholders of venture. If the financial department of organisation is able to manage properly, it
can earn success for enterprise in the contemporary competitive market. Therefore, organisations
need to develop performance of employees for capturing their prosperity.
Conclusion
Therefore, in order to conclude the study, it can be stated that if authority of venture is not able
to handle their financial department in proper way, they cannot earn prosperity in the competitive
market. The authority of Nass Corporation needs to maintain cost for holding their position in
society. Henceforth, the entire study has focused on the analysis of different financial tools like
fixed costs, target profitability, cash flow of lifetime value and variable costs. Cost and
management theory has been used for providing clear conception related to customer account
throughout the study. Potential variable cost, administrative support and fixed overhead have
been negotiated in the appropriate way. Henceforth, if ventures are able to manage their
customer account, they can bring positive outcome in the society.

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ANALYSING THE FINANCIAL POTENTIAL AND PERFORMANCE OF CUSTOMER ACCOUNTS
Reference list
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nassgroup.com (2017), Nass group, Retrieved 22 September 2017 from:
http://www.nassgroup.com/en
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