Ethical and Financial Analysis of Tobacco Industry: A Business Report

This report examines the ethical and financial aspects of the tobacco industry, focusing on Big Business Tobacco (BBT), an Australian tobacco producer. It analyzes the debate surrounding health warning labels on cigarette packs, identifying key stakeholders such as marketing and public relations managers, and the ethical issues involved, particularly concerning profit versus public health. The report also delves into financial accounting statements, including balance sheets, cash flow statements, and income statements, and how these are used to make business decisions. It provides insights into the role of an accounting manager, the importance of accurate record-keeping, and the necessity of technological advancements in the field. The report also discusses the impact of financial statements on investment decisions and the importance of training employees and improving workflow processes. It concludes by emphasizing the role of technology in accounting and the need for comprehensive knowledge in promoting productivity.

Introduction
Graphic warning labels on cigarette pack work much better as compare to written
warnings. Further, from the study it has been identified that graphic image which is placed on
cigarette pack stick in a person's mind and lead to improve their recall of the health warning.
However, it cannot be stated that warning sign can changed attitude to smoking or forced them to
quit smoking. The present report is based on, Big business tobaccos (BBT) which is a large
Australian producer of Tobacco products which consider a market leader brand of cigarettes. The
organisation is continuously developing and now it is moving to marker based economy. In this
report the main ethical issues which are involved in the debate is discussed. Along with this
different stakeholder who are involved in the debate on the health warning on cigarettes packs
are identified.
Question 1
A.) The major stakeholder in the debate on the health warning on cigarettes packs.
According to the the given scenario, Big Business Tobacco (BBT) is one of the largest
producer of tobacco products. At present it has decided to move market based economy. The
cigarette will be sold in pack of 40. There are different stakeholder who are involved in debate
on the health warning on cigarettes packs. Mary bender who is the marketing manager and
Randall Hedges, the company's public relation manager. The debate take place on placing health
warning sign on cigarettes packages or not. Mary bender argued that Australia implementation of
similar regulation has a great impact on smoking rates in particular country (Alo, Akosile and
Ayoola, 2016.). Mary bender, the marketing manager has decided to design of the cigarette
packer for the Asian market with Randall Hegdes. The issues take place for placing the warning
sign on cigarette package. She stated that in this business profit matters a lot and they main focus
on their shareholder. If they place warning sign on cigarette pack then it may lead to decline-in
sale of cigarette which directly impact profit of firm. On the other side Mary bender who
strongly opposed that warning sign on cigarette packs. If Asian law is subsequently amended,
then the organisation will be first one of to comply. Along with this there are many Asian
country where it is not legal requirement to show a health warning sign on cigarettes packets.
B.) The main ethical issues involved in the debates.

As per the given scenario, manager of Big Business Tobaccos is one of the largest
Australians producer which is know expanding its business in new Asian country. Debate take
place between marketing manager and Randall Hedges who is the company public relation
manager. Here ethical issues take place for Randal hedge related to placing warning sign in
smoking packets. As per the rule it is important for the firm to place warning sign with its brand
name. On the other hand marketing manager of firm is not agree to keep warning sign which is
completely unethical. According to laws and regulation no business is permitted to carry out its
business activities in unethical manner.
C.) If you were Randall what what would you do.
As working on a post of Randall, firstly it is important at the time of dealing with some
one to deal in ethical manner. There are many laws and legislation made by government which
need to be strictly followed at the time of carrying out business activity. It is important to carry
out all activities in ethical manner so that in future no problem can be faced by firm.
Question 2: Financial accounting statements used to show past events. Through the help of this it
become easy for organisation to make decision so that future action can be take.
Financial accounting which is a called as a language of business. It is important for the
organisation to make financial accounts so that it can look out its performace of business and
focus on those qualities which can lead to growth and development of business. One of the major
use of financial accounting is record transaction. Here firm can keep records of its business
activity in order to meet its future requirement. There are three type of statements which need to
prepare, so that firm can make decision and take actions in future. There are some common
financial statement that are balance sheet, cash flow statement, and income statement. Further
financial statement are neutral as because they show the picture of the activities. For the
particular financial year. Manager in business measure the data in order to make decision so that
necessary action can be taken for future growth.
Balance sheet: There are different kind of information which is provided in balance sheet on the
basis of which decision can be made. For instance it can be acknowledged that an organisation
with $ 22 million in annual sales. Here it can be analyse that there are 6 weeks of sales which is
sitting in accounts receivable. Hence, manager of an organisation can change its credit policies in
the business and focus on streamlining collections, because it help in resolving receivables

within a 30 days. The number in balance sheet provide possibilities of the success for growth and
efficiencies.
Further balance sheet reflects assets and liability of business. An assets is that which have
some value that is equipment, real estate and bank account. An assets is that which have some
value on the other hand liability is that which is own from others. For instance accrued taxes and
payroll is known as the liabilities.
Cash flow statement: Cash flow statement is very effective for the organisation in order
to make management decision. Here business can focus on profitable based on standard costing
method. It can make aware manager of business that the organisation has cash to pay its bills
over short period or not. By analysing net income and earning the manager can see healthy
financial picture Along with this, cash flow statement also reflect the present capability of and
organisation in order to maintain its operations. A if there is decline in organisation operating
ratio then its cash flow lead to trigger a red flag, it show that manager of an organisation need to
measure again its pricing, debt and inventory, debt and other short term decision so that cash
position on an organisation can be improved. For instance direct expenses of company in 2013
and 2014 is high then organisation need to make decision to decline its direct expenses. For this
purpose it need to make focus on its production activities. Here it need to avoid practising such
activities which charge high costs and avoid unnecessary expenses. s
The income statement; in different manner income statement is different from its cash
flow statement. It covers deprecation and other intangibles. Moreover, it not reflect the what is
received and payed to an organisation. Further with the help of cash flow statement organisation
can easily watch its profitability (Elnahas, Hassan and Ismail, 2017). This statement also helps in
comparing organisation performances. Along with this information is provided in income
statement assist in informing decision that control lead to control operating expenses and cost of
goods sold.
There are different type of decision which firm can make with the help of financial statements.
There is great impact of the organisation stock price such as there are different investor who first
look at the financial statement before making any type of investment decision. Further investor
mainly look out those ratio which is based on the assumption. It is so this all financial statement
have some forceful effect on the investor of a business.
ow are such elements describes which determines in day to day operations:

Keep proper records of data and maintain it
In respect to maintain information, it is very important to keep appropriate records and
maintains it. With the help of keeping records of data, as an accounting manager, I can perform
various functions effectively within the enterprise. In addition to this, I can also obtain and
maintain records through understanding financial reporting in general structure. It will assist to
support and budget for forecasting the activities (Tsamenyi, Qureshi and Yazdifar, 2013). It can
be collaborates with financial department managers that assist to cover goals and objectives.
Analysis past records with comparing present analysis
With comparing the data of current and past records, it has been analysis that proper
monitoring can be done. There are effective use of resources and procedures has been determines
in effective way that maintains high level of accuracy within the environment. It is also helpful
to maintaining the results with daily banking transaction so that department manager will be
support to goals and objectives in effective way. In this way, response is also determines from
firm wide managers regarding financial results and reporting towards requests (Moser and
Martin, 2012).
Use appropriate information with tools
In this aspect, information can be gather with various tools which describes in
performances to cover-up procedures. In this aspect, other finance department can be
collaborates to make support with managers. Continuous monitoring is also takes place that
assist to determine resources that handle non routine transaction at workplace. With the help of
response, inquiries also ascertain that is related to financial results and special reporting request.
With working of controller, it has been ensures that clean and timely auditing has been develops
that is more efficient (Gordon, Lockwood and Schirmer, 2012).
Ensure accuracy and timely processing
In respect to considering accounting, it will ensure accuracy and timely response towards
each activity and outcomes. In this aspect, business can easily achieve their targets and goals, it
is important to maintain accuracy in process and information that is related to the business
process. With the help of statistical tools and excel, accounting manager can keep their records
accurate. In this aspect, proper functioning is also maintaining that is requires perform activities
that is related to financial results (Moser and Martin, 2012).
Trained to employees

In this aspect, accounting manager has responsibilities to demonstrate training to each
person. With the help of proper support of different people, they can handle issue that are related
to staff conflicts and performances issues, etc. Working with each direct support, goals and
objectives can be established which monitors and advise progress that enhance performance
(Gordon, Lockwood and Schirmer, 2012).
Workflow process improvements
In order to deal with various outcomes, it is important to measure outcomes and results.
In this aspect, business can maintain their performances which establish through different project
and it is also supports to controller (Tsamenyi, Qureshi and Yazdifar, 2013). Hence, advise can
be made that assist to make proper development and implementation of special project. In
addition to this, as an accounting manager I can also work with controller to ensure clean and
timely year audit with specific general meeting (Tsamenyi, Qureshi and Yazdifar, 2013).
(B) Agreement towards necessity of technology
In order to perform function and operation, computer technology is playing very
important role in accounting of business performances. In this aspect, it is important to keep
specific resources that keep systematic records of different transaction at workplace (Flamholtz,
2012). With ascertain accounting process, I am disagreed with statement to keep effective
resources. With successful management accountant, full knowledge is requiring that assist to
promote the productivity and outcomes at workplace. With the help of education of technology
resources, accounting and information system will be manage systematically. This program,
usually describes effective information system which develops in different concept of IT. In this
aspect, future must be technologically savoy that is related relevant to considering study program
within the business environment (Ascui and Lovell, 2012).
In addition to this, it could be stated that there are various equipments has been describes
which including presence of computers, printers, scanners and faxes, etc. Information technology
accounting assist to me to keep various types of records separately. Hence, no paper and pen is
requiring to analysis and interpret it (Demski, 2013). With the help of different software, it has
been analysis that time and cost can be save which is key element to ensure profitability at
workplace. With undertake resources. Accountants can also helps to make proper calculation and
easy results that making very popular results within the environment. Software also helpful to
determining results through keeping all data safe. With undertake resources of technology, I can

manage my work in different computer documents that can be shared easily in one place to
another. There are different accounting areas where wireless and simple connection is needed to
perform such function and operation in effective program (Moser and Martin, 2012).
Further, security has been take place which assist to ascertain accounting security to keep
effective information. In this way, I need to perform function and operations through different
software that are needed to establish accounting security. Identification of password and limit
access assist to make confidence to find out effective results and performances at workplace.
With the help of technological changes, new grades has been prepared which assist to find out
concepts at workplace. However, various challenges easily face that are related to perform
functions effectively (DRURY, 2013).
Question 4
A.) Missing ratio
2010 2011 2012 2013 2014 2105
Cash 5200 7399 5800 4200 1700 3000
Accounts receivables 1600 100 634 4200 7600 2200
Inventory 2800 7300 8400 9900 3964 8700
Prepayments 300 2000 8500 9860 8100 2600
Total current assets 9900 16799 23334 28160 21364 16500
Accounts payable 1800 8500 5800 4700 8900 18100
Accrued liabilities 2000 2000 3400 5700 1600 4000
wages payable 1500 5200 2200 5600 9100 7900
Total current
liabilities 5300 15700 11400 16000 19600 30000
current ratio 1.867924 1.07 2.05 1.76 1.09 0.55

5283
Quick ratio
1.339622
6415 0.48 1.31 1.14125
0.887755
102 0.26
B.)
Current ratio is known as the ratio which is measured as a organisation liability in order to pay
short term and long term loan. Further current ratio is known as the current total assets of an
organisation. Formula which is used for calculating a company current ratio is as follows:
on the other hand quick ratio is known as the index of short term liquidity. It assist in measuring
the ability of an organisation to meet its short term obligation with its most liquid assets. The
formula used for calculating short term obligation is given below
From the above table it show that quick ratio of firm in 2011 is upto 1.07 and in 2013 it
increases to 1.76. Further, it in 2014 it decline. Since, from 2011 to 2015 current ratios are
decreasing. Current ratio is one of the important financial ratio which measure the liquidity of an
organisation. It is essential for an organisation to improve its current ratio. But there is a time
when decreasing the business current ratio is overbearing which lead to impact organisation
performance. A Higher ratio is considered as a good and lower ratio is considered as a poor. The
organisation can improve its current ratio it make delay in purchasing which is required any cash
payments (Mahendra, Alice and Gopal, 2016). Further by seeming any term which can be re
amortized and by minimising any personal draw on the business. Along with this organisation
can sale its assets which are not providing any return to the firm. It is important for an
organisation to monitor its current ratio so that firm can find outs its liquidity position. Apart
from this it can stated that a very high ratio is not good for company as same low current ratio.
So it is important to make decision clearly in order to minimize its extremely high current ratio.
By doing this it make sure that frim is using its resources effectively.
On the other side quick ratio in 2011 is 0.48 and in 2012 it is 1.31. Hence it can be stated that
firm quick ratio is also decreasing frim 2012. This quick current liabilities show all current the
Quick ratio= current assets – inventories/ current
Current ratio= Current assets/ current liabilities

proportion of quick ratio and current liabilities. Quick ratio is known as the reliable ratio which
is used for short term solvency, than current ratio also show the ability of the business in order to
pay short term debt. Hence, if company have higher quick ratio then it doesn’t mean that firm is
stronger. On there other side it can be stated that an organisation have low quick ratio then it
means it have fast moving inventories. Apart from this for improving quick ratio it is important
for firm to pay off all its current bills and on same time it enhance its sale. There are some ways
which organisation can adopt in order to improve its quick ratio such as by improving inventory
turnover ratio.
Conclusion
From the above report it can that any organisation who make cigarette products need to
make sure that all it make aware about its negative impact on health and place warning sign so
that people came to know whatever they are consuming is dangerous for their health. Further at
the time of carrying out business it is important to carry out in ethical manner. Further, it can be
concluded, there are financial accounting statement is very effective and help business in making
decision for its future action. There are different type of ratio which help organisation in
identifying its profitability and its current ratio.

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