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Exmination about finacial accounting1
Management theory
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ROLE OF FINANCIAL MANAGEMENT
- Financial management is one of the functions of management
- Financial management is concerned with
o Profits and losses of operations
o Control over funds
o Ensuring appropriate cash flow is available
o Chas management
o Raising funds / controlling internal funds
o Investment of funds
o Cost control / pricing
o Forecasting / measuring financial performance against expectations
- Accounting is a subset of financial management. Financial transactions must be recorded, classified, stored and eventually reported to the managers.
- OBJECTIVES OF FINANCIAL MANAGEMENT
o Liquidity Refers to cash reserves being held, or to the ability to turn and investment into cash with little or no delay or loss of capital
o Solvency Refers to a business ability to pay its debts when due, and remain a going concern
o Profitability Refers to how profitable the business is from the perspectives of profit on sales, assets and shareholders equity
o Efficiency Examines how well working capital is managed, that is how quickly cash is collected from debtors, inventory sold and creditors paid.
o Growth Once a business is formed and operations commence, it enters a growth phase, where there should be an increase in the number of goods or services sold
- THE PLANNING CYCLE
o Strategic or corporate plans involve how the business can accomplish its objectives, generally to create a strong competitive advantage
o Organisational planning processes involve
The formulation of mission, goals and objectives,
An analysis of key environmental variables that present opportunities, threats, and constraints. It is known as an environmental audit
An organisational audit to evaluate strengths and weaknesses and identify where change needs to be met
The formulation of strategies within deadlines to achieve specific objectives
Monitoring and review to ensure that the mission is on target and that performance indicators are being met
o Tactical plans focus on the most efficient resource use by a business unit or department
o Operational plans are concerned with implementing the strategic plan through day to day processes, procedures, workflow and efficiency
o Financial plans represent the dollar quantification of the stra...
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...e lease agreement come to an end. Here the emphasis is on rental, rather than what is effectively deferred purchase.
• The lessee may be responsible for paying all or any of the maintenance, insurance operating costs etc
Factoring
• Is the selling of accounts receivable or debtors ledgers to a third party for less than the book value
Sale and leaseback
• Refers to a transaction in which the seller retains the use of an asset such as occupancy of a building, by simultaneously signing a lease, with the purchaser of the asset at the time of sale
- EFFECTIVE FINANCIAL PLANNING
o EFFECTIVE CASHFLOW MANAGEMENT
Source of funds = use (application) of funds
Sources include
• Injection of new capital
• Raising new loans
• Reductions in stock
Applications include
• Pay out of loans
• Tax paid
• Purchase of fixed assets
Management strategies for cash flow problems include
• Shortening the operations cycle
• Increasing net profit margins
• Increasing trade payable
• Borrowing money
• Maintaining a minimum cash reserve
Jonathan Swift is the speaker in the story, A Modest Proposal. He is also the author of many other books and stories. In the text of A Modest Proposal, Swift addresses what he believes to be a big issue in the magnificent country of Ireland, Dublin to be exact. Therefore, he proposes a solution to the problem, however, the solution is not what we would call humane, orthodox, reasonable, or even one that we would consider performing today. Swift wrote this piece for anyone that can read and comprehend what the text implies.
It shows the investors that how liquid the inventory of the company is. This ratio measures and shows that how easily a company can turn its inventory or merchandise into cash. The increase in the ratio clearly indicates that the management of the company is managing its merchandise in an efficient and effective manner and it is also contribution to the profits of the company.
Measuring the liquidity through the current ratio, with 2.74 in the year 2009,0.74 above the standard, with the decline in the following year meeting exactly the standard at 2% in the year 2010, and a steep decline in the year 2011-2012 as compared to its standard.Resulting in the decline in firm’s ability to meet its day-to-day operating expenses. The current liabilities from 2009 to 2012 have increased by 27.03 billion whereas the investments in current assets have increased just by 26.09 billion, which causes the decline in the current ratio. To cope up with this problem the company should invest more in current assets and should reduce its current liabilities.
Single moms are the most affected and providing childcare on campus is very beneficial to them. More than 4 million women attend two-year public institutions or community colleges, and more than 1 million of them are mothers. Many student mothers struggle to stay enrolled all the way through graduation. Most of them are more likely to drop out of school, and the reason is because most often there is no affordable or available childcare and the students have limited financial resources. The average daycare center cost for an infant is higher than a year’s tuition and fees at a public college. It makes affordable on-campus child care a necessary provision for students. Childcare on campus helps to contribute to the learning
What most listeners do not understand is that a lot of hip-hop music is not understandable from the get-go. It takes intense analyzation of lyrics and an open mind to be able to understand what it is really about. Some people can’t understand what is being said just by listening with their ears, and they don’t bother to go study the lyrics. They then leave with the perception that hip-hop is chalk full of, well, nothing. One of the greatest rap lyricists of all time, Shawn Carter, also known as Jay-Z, says, “People don’t bother trying to get it. The problem is that so many people don’t even know how to listen to the music.” Mister Shawn Carter has also said that rap is poetry. He mentioned not to forget that the lyrics in the song were transmitted from feelings, thoughts and emotions to lyrics written on a piece of paper. He went on to say that if you hung that piece of paper up on a wall and someone went up and read it as it was, they’d say, “Wow, this is genius. This is poetry.” McHorter’s opinion on rap can and will be agreed upon by many, many people; however, this conclusion can only be reached without h...
Kelley, Robin. “Looking to Get Paid: How Some Black Youth Put Culture to Work.” Yo’ Mama’s Disfunktional!: Fighting the Culture Wars in Urban America. Boston: Beacon Press, 1998. 43-77. Print.
By taking into account only the most liquid assets, ratio 1.0 in 2013 and 2012, which increased by a small margin 0.2 from 2011, indicates that company has strong liquidity position.
The liquidity position of a company can be evaluated using several ratios which evaluate short-term assets and liabilities and a firm’s ability to settle short-term debts (Gibson, 2011). These ratios can provide insight into a firm’s ability to repay its debts in the short term (Gibson, 2011). In turn they suggest a firm’s capacity for debt-satisfying capabilities into the future (Gibson, 2011). This paper will use financial statement data as cited in Gibson (2011) from 3M Company (3M) to better understand liquidity measures to evaluate a firm’s total liquidity position. The following paper will focus on various liquidity calculations, their meaning, and their interpretation relative to 3M. Finally, an overall view of 3M’s liquidity position will be evaluated. By analyzing a company using ratios, one can evaluate the effectiveness of its management and its strengths and weaknesses (Žager, Sačer, & Dečman, 2012).
Financial and Managerial accounting are used for making sound financial decisions about an organization. They provide information of past quantitative financial activities and are useful in making future economic decisions. (Albrecht, Stice, Stice, & Skousen, 2002) The same financial data is used to derive reports for each accounting process yet they differ in some ways. Financial accounting primarily provides external reports for external users such as stock holders, creditors, regulating authority and others. (Garrison, Noreen, & Brewer, 2010) On the other hand Managerial accounting is concern with providing information that deals with the internal viability of the organization and is tailored to meet the needs of an individual organization. (Albrecht, Stice, Stice, & Skousen, 2002)
Once plans have been developed, an organization must address how management will be accomplishing be those plans. This involves operational plans that must flow from strategy; specify resource, time issues, and commitment of human resources. Operational plans at the lower - levels of the organization, have a shorter time horizon, and are narrower in scope (Bateman, Snell 2003 p.113). A good example of this is Wal-Mart's main strategic goal. It is to provide quality merchandise at an affordable low cost to consumers. Its operational goals focus on efficient logistics requiring technology and inventory management systems to help reduce costs so it can be passed on to the customer. Operational plans are derived from a tactical plan and are aimed at achieving one or more operational goals (Bateman, Snell 2003 p.113).
The consequences of the notion of the invisibility transcend an inability of viewing and understanding an invisible man and extend to the invisible man living out the false stereotypical presumptions of his identity. Because the invisible man’s invisibility was out of his control, and were a result of ignorant blindness of racial identities and stereotypes, the Invisible Man is not to blame for his change into what’s presumed of him. After his identity is refused acknowledgement by society, the narrator’s characteristics changed to match the misconstrued blind perception of him, which is less responsible. In justifying his irresponsible behavior, the narrator said, “Responsibility is part of my invisibility; any way you face it, it is a denial. But to whom can I be responsible, and why should I be, when you refuse to see me?”. In a similar case that goes one step further the narrator beats a blonde man up in the prologue and says “ Poor fool, poor blind fool, I thought with sincere compassion, mugged by an invisible man”. He implied not being at fault, for he could not control his invisibility or for that man to see him. Being that it was late, it also could have been possible that the blonde man just did not see him because it was so dark outside, so he was literally blinded without the
Transactions in business to business are usually in huge quantities and involve huge cash expenditure. Businesses usually buy in large quantities to sell to many customers. Businesses also buy raw materials in large quantities to finish the raw materials into final products and sell them in large quantities. On the other hand, business to customer involves transactions related to the sale of one product and this involves less capital expenditure (Barschel, 2007). Most of the customers do not buy in large quantities. No customer will buy two vehicles since this would be expensive. Even though business to business transaction may be for final consumption, the quantity dealt with is usually large because the number of users in the organization is usually high.
Procedures for monitoring and measuring operations that can have a significant impact on the environment.
Accounting aids the government and organisations in decision making for their financial stability. This numerical data helps solve real life problems and contributes to how the economy and businesses perform.
Strategic planning is an organizational process in which it looks towards developing and sustaining success or balance in its ever changing environment.