Management Accounting Report: RYANAIR Financial Analysis

This report analyzes the management accounting practices of RYANAIR, a major airline company. It begins by defining management accounting and its essential requirements, including cost accounting, job accounting, and process costing systems. The report then explains various management accounting reporting methods such as cost reports, budget reports, and performance reports. A key section calculates costs per unit using both absorption and marginal costing approaches, providing detailed tables for each method. The report also examines the advantages and disadvantages of planning tools used for budgetary control. Finally, it compares airline industries to assess how organizations adapt management accounting systems to address financial issues, providing a comprehensive overview of financial management within the airline industry.

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P.1.Management accounting and essential requirements of different types of management
accounting systems......................................................................................................................1
P.2. Explain the different methods used for management accounting reports............................3
TASK 2............................................................................................................................................4
P.3. Calculate costs as per unit under both absorption and marginal costing approach.............4
TASK 3............................................................................................................................................7
P.4. Explain the advantages and disadvantages of various kinds of planning tools used for
budgetary control within the organisation...................................................................................7
TASK 4............................................................................................................................................8
P.5. Comparison of airlines industries in order to establishment of how organisations are
adapting management accounting system to response financial issues......................................8
REFERENCES..............................................................................................................................11

INTRODUCTION
In this documentation, this study defines about different kinds of essentials requirements
in order to make preparation of different kinds of management accounting tools and techniques
in order to preparation of different management accounting system in context of reduction of
costing and expenses of services provision of the company in relevant form. Moreover, this
assignment also refer to uses of various management accounting reporting system can be used in
terms of improvement in the performance of the company in the industry in significant ways.
Apart from it. This analysis also describe about to evaluation of different types of management
accounting tools and techniques which might be utilised in order to make resolution of each
financial issues of airline companies in the industry sufficiently and increase the profitability and
productivity in effective form.
TASK 1
P.1.Management accounting and essential requirements of different types of management
accounting systems
Management accounting is an approach by which every firm can evaluate financial
measurement in the industry more effectively and also assess the financial performance of the
industry in more relevant form. Management accounting approach assist manager of RYANAIR
airline in order to assess their financial data effectively and measure the performance of the
company in the industry in more relevant form. The manager of the company require to
continuously measure them in business environment effectively and make decision in order to
overcome from the critical issues of the company in effective form (Harris and Mongiello,
2012). Management accounting is the method of formation of manager reports within the
business and some essential accounting reports which furnish the exact value and timely
financial and statistical data which could assist the accounting manager of the company in order
to manage their day to day activities in relevant form within the industry in order to keep up in
complex competitive market efficiently. This is sale like a financial accounting in the business
and they formulate some effective annual reports in order to maintain the external stakeholders
and management accounting generates monthly and quarterly basis reports by internal
departments of the company such as department management accounting manager and
accounting executives at the workplace effectively. They make some effective schedules in order
to generate more relevant services in the business in appropriate form.
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Cost accounting system: This is a major approach of management accounting system in
more relevant form in order to generate more effective accounting system at the workplace in
efficient form. This type of accounting is mainly formulated in the business in order to control
the production and service provision cost of RYANAIR organisational facilities effectively. This
report is made by manager with the form of some sorts such as processing, controlling and
reporting and the designing in order to gather more effective financial data and asses them at the
workplace in order to manager their revenues, cots and profitability in impressive form in the
organisation appropriately (Moser, 2012). This reports can be used for internal reports of the
company and it assists the organisation in respect to reduce the cost of Airline services provision
in the industry and increase the profitability of the business entity properly.
Job accounting system: This is also very necessary tools of management accounting by
which manager of RYANAIR Airline company can reduce the each job costing price at the
workplaces in effective manner. They have some areas by which efficient development can be
generate in more relevant form in the organisation. Moreover, this job costing approach defines
about to values by which accumulation of information can be generated in more relevant form so
that every job concerned with the particular services provision process in the company, they need
to make use of some areas by which efficient development can be gained effectively. Manager of
the company can easily identify the critical areas of each job process and over costing in the
organisation. As per the tools of job accounting system, manager of the organisation can reduce
the each job costing price at the workplace in more effective form.
Process costing system: This is also most appropriate alternative management accounting
tools by which the manager of the airline company can identify all unit costing which is being
served in the organisation in more relevant form (Suomala and Lyly-Yrjänäinen, 2012). The
accounting manager of the company could compute the aggregate costing of each services
provision of the entity in effective manner. The assumption is that, the cost of each product
manufacturing is the same of other production in the company efficiently. So that manager could
find out that, there is no need to tack each unit service provision. With the assistance of this
accounting tools, they can manager the process costing of the services provision in the airline
company in more relevant form. The organisation can raise their productivity and profitability in
more relevant form.
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P.2. Explain the different methods used for management accounting reports
Management accounting of company refers to process of formulation of different types of
management accounting reports at workplace in order to control, plan and decision making
process of manager towards approached operational functioning of business organisation in
industry in effective form (Abdel-Kader, ed., 2011). Management accounting is based on various
financial statement such as balance sheet, income statement cash flow statement etc. Moreover,
these managements accounting tools might also be useful for the preparation of reports at
workplace and they can assist the manager to manage all their activities and to effectively control
reports in the corporation sufficiently.
Cost reports: Cost reports also one of the essential management accounting reporting
mechanism by which efficient development can be generated in more relevant form of the
services in effective sorts. The accounting officer of the company compute the cost of each firm
in the industry in more relevant form, there are varied of cost presented here which must be
calculated by manager of RYANAIR organisation in appropriate form (Baldvinsdottir, Mitchell
and Nørreklit, 2010). These cost in the airline service provision is overhead cost, labour costs
and extra cost in the consideration of the company in relevant form of the services in effective
sort. Al the financial data is measured in the cost reporting of the business in relevant form in
order to generating more effective reports at the workplace. This reports also shows different
between the selling prices and costing prices of the organisation in relevant form, so that
effective cost can be generated at the workplace.
Budget reports: The major key factor of management accounting is preparing budget
reporting at the workplace in more relevant form so that each one of them can generate more
efficient services in the market in effective for. This is formulated based on the future forecasting
of the business progress and profitability of the business in the market in more relevant manner.
Reporting of RYANAIR organisation must be involvement of costing and appropriate revenue
and expenses sources of the organisation effectively (Håkansson, Kraus and Lind, eds., 2010).
This preparation of budgeting at the workplace also affect the performance of the business in the
industry in sufficient way. In the budgeting preparation of the company, accounting manager of
the organisation need to inclusion of fixed collection of budgeting at the workplace in more
relevant form and there are several kinds of services is providing in RYANAIR organisation
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airline scheduling services and they need to make use of some areas by which effective
forecasting of budget reporting can be established in efficient form.
Performance reports: This is also an effective tool of management accounting reporting
in order to examine the performance of the business in give financial time period in the industry
in more relevant form. Manager of the company need to make comparisons between actual
performance of the business to the set standard of the company in effective form (Talha, Raja
and Seetharaman, 2010). So efficient measurement of their performance in the company can be
computed in effective manner. Moreover, the company need to make use of some areas by which
efficient development can be generated in more relevant form. Manager of the company need to
formulate this reports at the each level so that efficient development can be generated in more
effective ways. The performance reports of the company help the organisational manager in
respect to determine the future requirement of the airline services and cost increment in the
airline services as well. According to set up standard of the company, manager can easily
examine the growth of the firm in the market more relevantly.
TASK 2
P.3. Calculate costs as per unit under both absorption and marginal costing approach
Table:1. Absorption costing approach for RYANAIR organisation:
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Table: 2. Marginal costing approach for RYANAIR organisation:
From the above assessment of marginal and absorption costing method, it could be said
that, both techniques are most essential for the organisation in relevant form in order to compute
relevant costing method within the organisational environment in more effective form. Marginal
costing is an approach of variable costing approach at the workplace in order to manage their
effective services in more relevant form so that efficient development can be generated within
the organisation time period in more efficient sort (Bennett, Schaltegger and Zvezdov, 2013).
This is inclusion of direct material costs, direct labour costs and direct expenses cost within the
organisation in effective form and some of variable production overheads costs in efficiently. So
as the variable cost is increasing in the industry, they need to make use of some areas by which
efficient development can be generated in the industry in relevant form. Moreover, the marginal
costing is the part of costs of the one unit production services in the company in more relevant
form and this avoid the costing of the production which is not included in the production level of
the company. As RYANAIR airline organisation wants to expand its foods services at various
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roots in the industry, they need to make use of some areas by which efficient development can be
generated in more relevant form. In case of this, if volume of output is increasing then the cost of
per unit in decreasing in the company in effective form. Marginal costing is classified into
several costing factor which is based on the classification of segregation of cost into fixed and
variable costing of the company effectively (Hoque, 2011). This is also useful techniques for the
organisational manager in terms of development in some essential areas of the business in order
to generate more relevant services to them in effective form. This costing method assist the
business manager in respect to reducing the cost of each unit in the company in relevant form.
This is simple to calculate within the organisation environment effectively. Moreover, absorption
costing is also one of the essentials tools of management accounting in order to preparation of
costing for RYANAIR airline organisation properly. This is the process of calculating all
techniques in more relevant form in the industry in order to maintain their cost of production in
the market and they make particular areas of the business n which each services provision cost of
the company is associate to accounting principle of the organisation in relevant form, the
company manager need to make use of this approach in order to computing some of the direct
costs which is concerned to the service provision cost of the organisation. This is a method in
which all the service provision RYANAIR company at the workplace which is observed by the
company in relevant form of the services in more efficient manner in the organisation in relevant
form. There are several types of expenses are included which is direct material costing, direct
labour costing and both fixed and variable costing in the relevant form so that each one of them
can generate more relevant services in the industry in effective form. Absorption costing method
is calculated in the organisation with the assistance of variable and direct costing effectively
(Ramljak and Rogošić, 2012). Hence, in could be said that, RYANAIR airline organisation need
to make use of some effective services at the workplace in more effective manner. With the
assistance of both techniques the accounting manager of the firm can prepare financial reports at
the workplace on quarterly basis in order ot make appropriate decision concerning to appropriate
development in cost reduction in the business and identify those areas in which direct and
variable cost increasing, so the manager of the company can reduce the cost of each services
provision level of the company in effective manner.
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TASK 3
P.4. Explain the advantages and disadvantages of various kinds of planning tools used for
budgetary control within the organisation
Varied of planning tools presented here by which the organisational manager can
formulate several kinds of budgetary control planning in order to sustain in the market in more
effective manner. Budgetary control is one of the appropriate tools of the organisation in order to
control all over expenses and reduce the over costing in each service provision of the firm in the
industry in effective manner (Vosselman, 2014). The financial department of the corporation
require preparing it at regular basis at the workplace in respect to ascertain the critical part of the
organisation in the industry in more relevant form so that effective development can be generated
within the organisational environment in more effective manner.
Cash budgeting: Cash budgeting necessary approach of formation of budgeting at the
workplace by manager in effective manner. The corporation's accounting manager need to
compute all cash inflow and outflow of airline service provision transaction in effective form so
that all cash transaction can be examined by the manager in proper ways so that over costing
sections of the business can be evaluated in the company in more efficient manner.
Advantage of cash budgeting:
 This budgeting assist the business manager in order to get engaged with the significant
matters of the organisation in the industry which is not proceeding as per the
predetermined plan of action (Hiebl, 2014).
 Cash budgeting assist the business manager in order to make improvement in the
communication and better understanding level of the business manage in the industry at
more effective form. Cash budgeting helps the organisation in order to minimise the cost of service provision
and raise the profitability of the business sufficiently.
Disadvantages of cash budgeting:
 In case of cash budgeting, it is totally based on the forecasting of the financial
performance of the company in future and several times, it has been seen that, forecasting
values of the business could not meet in the organisational environment efficiently.
 There are lack of flexibility in this kind of budgeting in the organisation so that there are
fewer opportunities to get appropriate success in the market in effective manner.
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Fixed budgeting: Fixed budgeting is also necessary terms for the organisation in order to
get appropriate success in given time period. In case of this budgeting, the determined values of
the business is fixed and never get changed within the organisation environment effectively.
RYANAIR organisation need to make sure that, its value always remain fixed ad the
organisation manager not frequent need to make modification in it.
Advantage of fixed budgeting:
 With the assistance of fixed budgeting approach, manager of the company can reduce the
cost of service provision in the various airline roots of the company and set up the price
level of each service which every customer can afford in perfectly (Chenhall and Smith,
2011). Other advantage of this budgeting is that, manager set the vale of the budgeting which
remain same in the company and never get changed so there are no needs of frequently
modification in it.
Disadvantage of fixed budgeting:
 The major disadvantage of this budgeting is that, its value never get changed in the future
and always remain same in the industry, so many time business circumstances get
changed and as per the business situation, manager need to make changes in their
effective budgeting method and process according to them make proper development.
 This budgeting system does not furnish effective guideline in the company by which the
organisational manger could not make proper modification in them in favour of proper
development.
TASK 4
P.5. Comparison of airlines industries in order to establishment of how organisations are
adapting management accounting system to response financial issues
Each organisation faced financial issues in the industry in more relevant form so that
effective development can be examined by their professionals in the business environment in
relevant form. They need to make use of some areas by which efficient development can be
generated in more relevant form (Bouten and Hoozée, 2013). There are various kinds of airline
companies in the industries is facing varied of issues effectively and they need to make use of
some efficient management accounting tools and mechanism in order to resolve their each issues
in the company in relevant form. In case of RYANAI, Easy jet airline and South-west airline,
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these airlines are facing some critical financial issues in the organisations and they need to make
use of some areas by which financial issue could be resolved in efficient form.
Key performance indicators: Key performance indicator is one of the essential tools for
the business in order to sustain in the market in more relevant form. The organisational manager
need to make use of KPI indicators at the workplace in order to identify the areas by which
importance of the firm can be examined in more relevant form. The key performance indicator
assist the business manager to recognise the weak performance areas of the business and as per
management accounting tools and techniques, the managers of these companies can reduce the
cost of production in relevant form (Caglio and Ditillo, 2012). Organisational manager could
easily identify the sections of the business entity which is not functioning as per the
predetermined planning at the workplace so that manager of the business can easily identify them
can make improvement in the over service provision of the areas by which efficient development
can be executed in the business environment in effective manner.
Balance score card: Balance score card, this is also one of the essential management
accounting tools by which effective development can be executed and financial issues can be
resolved effectively. This is identified as the balance matrix card of the business in order to gain
more success in the market in more relevant form so that efficient development can be generated
in the business environment effectively. Manager of the company can use of this strategic
management approach in order to recognise the improvement in several internal functions of the
business entity and with the help of this tool, the organisational manager can make betterment in
the outcomes of the business in relevant form (Hilton and Platt, 2013). This could be used as the
measurement of the organisation in the industry in more relevant ways and the matrix of the
organisation furnish appropriate feedback and guidance in order to sustain in the market in more
relevant form. Data collection of the business is most necessary thing for proper development in
some areas by which effective development can be generated in more relevant form and this is
also made assistance in the improvement in the quantitative outcomes of the corporation
efficiently.
CONCLUSION
From the above analysis, it is concluded that, managerial accounting system is most
appropriate approach of the organisation in order to execute better administration at the
workplace in more effective manner. The organisation professional and accounting manager of
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the company need to utilise of various accounting tools and techniques at the workplace in
respect to better preparation of management accounting reporting at the workplace in better
manner so that effective development can be executed and organisational objectives could be
improved in better manner in the industry. The organisational manger need to use of several
types of management accounting budgeting preparation tools and mechanism in order to sustain
in the market in more relevant form.
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REFERENCES
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Baldvinsdottir, G., Mitchell, F. and Nørreklit, H., 2010. Issues in the relationship between theory
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management accounting for sustainability. pp. 1-56. London: ICAEW.
Bouten, L. and Hoozée, S., 2013. On the interplay between environmental reporting and
management accounting change. Management Accounting Research. 24. 4. pp. 333-348.
Caglio, A. and Ditillo, A., 2012. Opening the black box of management accounting information
exchanges in buyer–supplier relationships. Management Accounting Research. 23. 2. pp.
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Chenhall, R. H. and Smith, D., 2011. A review of Australian management accounting research:
1980–2009. Accounting & Finance. 51. 1. pp. 173-206.
Håkansson, H., Kraus, K. and Lind, J. eds., 2010. Accounting in networks. Routledge.
Harris, P. and Mongiello, M., 2012. Accounting and Financial Management. Routledge.
Hiebl, M. R., 2014. Upper echelons theory in management accounting and control research.
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Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
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Hoque, Z., 2011. The relations among competition, delegation, management accounting systems
change and performance: A path model. Advances in Accounting. 27. 2. pp. 266-277.
Moser, D. V., 2012. Is accounting research stagnant?. Accounting Horizons. 26. 4. pp. 845-850.
Ramljak, B. and Rogošić, A., 2012. Strategic management accounting practices in Croatia.
Journal of international management studies. 7. 2. pp. 93-100.
Suomala, P. and Lyly-Yrjänäinen, J., 2012. Management accounting research in practice:
Lessons learned from an interventionist approach. Routledge.
Talha, M., Raja, J. B. and Seetharaman, A., 2010. A new look at management accounting.
Journal of Applied Business Research. 26. 4. p. 83.
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Vosselman, E., 2014. The ‘performativity thesis’ and its critics: Towards a relational ontology of
management accounting. Accounting and Business Research. 44. 2. pp. 181-203.
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