Understanding Management Accounting And Financial Management Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1532 Downloads: 4 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? Accounting is a collection of processes and systems used to record, report and interpret the business transactions. It provides an account i.e. explanation or report in financial terms. Don’t waste time! Our writers will create an original "Understanding Management Accounting And Financial Management Finance Essay" essay for you Create order Explanation or report regarding the transactions of an organisation can be viewed. A company named Flight high ventures plc is a producer/retailer of gliding equipment. The business would like to look into expanding their business abroad with an ambitious 20% export target in 2 years time. Companys sales turnover is growing at an impressive 10% yearly and they are looking at ways to improve their productivity even further. The company is planning to set up a new plant to cope with expansion plans. To set up a new plant company will require an initial outlay of  £4m. The RD team of Flight high ventures plc have developed two ways of manufacturing the new product. One method requires a lower initial cash outlay and a second method requires a higher initial outlay but would help in achieving better economies of scale. The methods are however mutually exclusive and a decision will have to be taken as to which method will be more appropriate. Based on the options A B, Investme nt appraisal methods i.e. Accounting rate of return, Payback period, Net present value and Internal rate of return should be calculated to evaluate the R D projects. A conclusion should be made on the results calculated and recommend the firm the best method of manufacturing the new product. Background Accounting is defined as a system for providing financial information to those who have to make decisions and control the implementation of those decisions (Arnold and Turley, 1996). Accounting can also be defined as the process of identifying, measuring and communicating economic information to permit informed judgements and decisions by users of the information (Collier, 2006). Accounting helps in knowing profit and financial position of the organisation and also it helps in planning for the expansion of business. Management accounting is concerned with the provision of information to managers who make decisions about the ways in which an organisations resources should be allocated (Arnold and Turley, 1996). Management accounting is concerned about providing information for management. It provides a wide range of internally used information much of also contributes to the creation of the financial accounts (Ryan, 2004). Uses of management accounting Comparison of accounts with original budgets or forecasts can be done Managing of resources will be better, Trends in the business can be identified and Variations in the income can be highlighted which requires attention. Financial Accounting is the accountability which results in the production of financial statements, primarily for those integrated parties who are external to the business (Collier, 2006). Through financial management and by using the investment appraisal methods a decision should be made on particular investment opportunity of company named Flight high ventures plc. Analysis Accounting Rate of Return (ARR) The ARR method takes the average accounting operating profit that the investment will generate and expresses it as a percentage of the average investment made over the life of the project (Atrill and McLaney, 2008). For any project to be acceptable it must have a target ARR as a minimum. The Companys recent return on capital employed (ROCE) has been 20%. ARR and ROCE ratio takes the same approach to performance management. They both relate the profit to the cost of the assets invested to generate that profit. The minimum target would be based on the rate that previous investments have achieved. ARR has many advantages as a method of investment appraisal. Since ROCE is a widely used measure of business performance shareholders use this ratio to evaluate the management performance. In case of option A the ARR is 8.75% which is very low and does not reach the target. Whereas in case of option B the ARR is 14.87% which is nearly equal to the recent return on the capital employed. If the business is seeking through their investments to generate a percentage rate of return on investment, ARR would be more helpful. It gives a value in familiar percentage terms It can be compared with primary accounting ratios i.e. the companys required rate of return or cost of capital It is a relatively simple concept compared to Discounted Cash Flow methods, such as Net Present Value and Internal Rate of Return It can be used to compare mutually exclusive projects It considers the whole benefits of the project, unlike the payback method Disadvantages It uses accounting profit rather than cash The profit is not directly linked to the primary financial objective of shareholder wealth maximisation It uses average profits and hence it ignores the timing of profits It ignores the time value of money It is a relative measure and so it ignores the size of the initial investment Payback Period (PP) Payback period is the length of time it takes for an initial investment to be repaid out of the net cash inflows from a project (Atrill and McLaney, 2008). Although it is simple concept to understand and easy to calculate, this technique fails to recognise the cash flows beyond the payback period. It only considers the less payback period and ignores the size of the investment and any cash flows that take place after the investment has been recovered. It ignores the size and timing of cash flows. Both the Accounting Rate of Return and Payback period does not consider the time value of money. The time value of the money should be recognised in investment appraisals in order to compare the investment alternatives with different cash flows over different time periods. The payback period of method A is 1 year 183 days and the payback period for method B is 2 years 183 days. We cannot consider the method A since it has less payback period. Method A has less initial investment of  £ 968000 in the year 0 and the payback period is 1 year 183 days. After the payback period the cash flows of the Method A are declined year by year. Whereas in case of Method B it has initial investment of  £1210000, more than Method A and its payback period is 2 years 183 days and the cash flows after the payback period are in increasing order year by year. Net present value (NPV) Net present value is the surplus value offered by an investment opportunity when the required capital investment is deducted from the present value of its future cash flows, discounted at the firms opportunity cost of capital (Ryan, 2004). The NPV for Method A is 554.785 and NPV for Method B is 847.916.Using NPV method it is difficult to determine how much better Method B is than Method A because each has a different initial investment. By ranking the projects a decision can be taken on the methods. Ranking of projects with different NPVs is Cash value added= NPV Initial capital investment CVA for method A is 554.785 968 = 0.5731 CVA for method B is 847.916 1210 = 0.7007 Based on the profitability index or CVA the R D team should choose method B. By discounting the various cash flows of every method, NPV takes account of the time value of the money.NPV takes account of all the relevant cash flows over the life of a project. NPV is the only method o f appraisal in which the output the analysis has a direct bearing on the wealth of the owners of the business. If the choice has to be made between methods, the business should normally select the one with the higher or highest NPV. Method B has the highest NPV. Internal Rate of Return (IRR) The internal rate of return (IRR) of a particular investment is the discount rate that, when applied to its future cash flows, will produce an NPV of precisely zero (Ryan, 2004). The IRR for method A is 42.92% and IRR for method B is 36.66%. If two (or more) competing projects exceed the minimum IRR, the one with the higher (or highest) IRR should be selected. Although if we accept the project with the higher percentage return which will often generate more wealth, this may not always be right because IRR completely ignores the scale of investment. There might be a future problem with the IRR method in handling the projects with unconventional cash flows. We cannot consider method A as it has highest IRR because method A has unconventional cash flows and it has less NPV. So method B can be considered as the best one because it has conventional cash flows and scale of investment is high. Conclusion Method B would be the best choice for R D team to develop the new product for Flight high ventures plc. In case of method B ARR is high whereas the payback period is more, where both the methods ignore the time value of money.NPV of method B is more when compared to method A. NPV takes account into time value of money and discount future cash flows to their present value. NPV is more reliable method of investment appraisal. A business usually selects the project with highest net present value. As the net profit of method B is increasing year by year and the sales turnover is growing at an impressive 10% yearly, it would be the best choice.

Teenage Depression How My Story Can Help Others

Blake Jerue 12/13/16 English 1110 Teenage Depression: How My Story Can Help Others Most families think that their moody teen is just in a phase that all adolescents go through. Puberty, that time when an individual goes from a child to a teen. It marks a time of physical changes, but for many teens may also mark the start of something that will stay with them for many years; depression. Depression effects an estimated 19 million Americans, making it one of the most prevalent mental illnesses in the United States (Hell, 2015). The National Institute of Mental Health (2016) found around 12.5% of all American adolescence (ages 12-17) experienced at least one depressive episode in 2015. I am among that 12.5%. I was diagnosed with depression and anxiety in 2015 after experiencing depressive symptoms for almost five years. For five years, I had experienced increases of depressive episodes until I knew I needed to make a change, and that decision was one of the best I have ever made. 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Color Purple Essay Example For Students

Color Purple Essay The book called The Color Purple shows many of the topics discussed in class, but for the purpose of this paper I would like to discuss three aspects that are the most concerning and disturbing. The concept of the body, reproduction, and violence shown through the novel are the most prominent and key concerns seen in this literature selection that I would like to analyze in this expository essay. Beginning with the concept of the body, The Color Purple portrays a very graphic portrayal from the first pages. â€Å"She ugly† (Walker, 9). This gives the feel that the men have high standards of the women that are seen in this story of Black Southern Women. This also can be seen when Celie (the main character) holds on to a picture of Shug Avery (the woman she lets her husband have an affair with) because she is so beautiful. These are ideals seen in our culture as a whole. Women holding onto pictures of women in magazines and posters lead to the idea that the airbrushed picture is attainable and that is what the women of the world need to look like. The forerunner of this is visualized when this is what the men look at in their magazines. The view that men have of women is one of this sexual being waiting to be had. Celie holding onto this picture is the same as a woman today buying a magazine that appeals to her inferior parts. â€Å"I’m not as pretty or as smartà ¢â‚¬ (10) is played on throughout the book as well as in our culture. Women of the world today need to be attractive to be someone, or so it seems. The same way Celie is a barefoot and pregnant housewife living her fantasy of a singer that is attractive. The epitome of the quotes that shows the sexuality associated with a women’s body is â€Å"right down there in your *censored* is a little button that gits real hot when you do you know what with somebody† (81). This allows the feeling of vulgarity in someone’s mind today, because talk of this sort is discounted. Through this following quote it continues with other vulgarities that society does not accept â€Å"I kiss her back†¦Then us touch each other† (118). Mainly, because female sexuality as a whole is discounted and seen as a negative portrayal of our home lives. And your home life makes you what you are in a public eye. So lesbian acts are deemed unmentionable as well. This is what the body is portrayed like in our society for a women, you can look, just don’t touch it. Reproduction is the second factor that is a touchy concept in today’s world as well as in the novel. â€Å"†¦But the thought of anybody gitting pregnant make me want to cry† (261) is a choice that shows how women in the novel perceive their lives as mothers. That’s all they have going for them. The women stay home and care for children while the men provide. This is republican motherhood all over again. This just is not acceptable in the modern world, but it happens through fear and trough violence (discussed in the latter part of this paper). â€Å"What is it like? He git up on you, heist your nightgown round your waist, plunge in. Most times I pretend I ain’t there. He never know the difference† (Walker). This also allows for a chance to see again how women are used not just for their bodies, but the assumption is made that he is always on her to help promote his genes in the race, since he has two children and she has another. Just do your b usiness and leave that happens to be a big stereotype of men in our culture today. Men date women to get what they want and then leave. Bang and Bail as my male friends like to classify it. It is a main stream idea to have men be sexually promiscuous and women be sexually passive. Give the man what he wants and do not bother him the rest of the time. These are all cliches that have probably been shared as jokes, but have now become part of our major understanding of the world as we know it. The Color Purple as well as these main stream ideas leave no morals for the families any longer. Besides a woman is pregnant with a man’s child, but he wants someone else because his genes are being passed on, why stay with a soiled woman. Again reproduction is tied to sexuality that leads to the body, but it can also lead to violence as often seen in the novel. The violence aspect is done in a variety of ways, all in which I would like to address. The first is in rape itself. The book ope ns with this image, which just eludes you to the rest of the book when it states plainly â€Å" †¦he grab hold of my titties. Then he push his thing inside my *censored*. When that hurt I cry†¦You better shut up and git used to it† (1-2). Compelling and appalling is the first act of this play. This is a scene where there is violence against women. This is probably why she lies there and takes sex; it is what a man can have when he wants it. Why get choked or beat for resisting, just give in and survive. This goes along with the modern world where women are raped by someone they know. Celie being raped is by her stepfather in the opening as are many girls growing up in a broken home. Another form of violence is blatant hitting. The men tend to hit the women. It is sad when a woman is afraid of her own children. The novel gives hints at this with â€Å"†¦oldest boy. He twelve†¦He pick up a rock and laid my head open. The blood†¦Ã¢â‚¬  (13). Violence b y men against women is also seen when a woman can not defend herself against her abuser â€Å"I don’t know how to fight† (18). This is seen time and time again, because women play with dolls while guys go out and fight, play football, and wrestle. The social norms are skewed in favor towards men when it comes to violence because we are told it is okay for boys to hit, and women turn the other cheek. The reason for beating in this is because Celie is the wife. The wife is the one to get beat, and can not leave. Why? Because more danger is asserted and then more beatings follow. Just take the beatings and role with the punches is what the feel comes out of pop culture, because you do something about the beatings, and the women is imprisoned. The last form of violence is the emotional kind. Through all the prior mentioned information you can see how some is emotionally torn up and is so due to her husband/male figures in her life. It makes a woman feel in general that all men are scum as noticeable with the quote â€Å"And act just like all other mens I know. Trifling, forgitful and lowdown† (199). This can be through a series of physical abuses, from multiple men, giving a negative take on life. As a society nowadays this also has validity. Men are jerks, arrogant, sex fiends. These are ideals that come about when the same abuses come from multiple men portraying the same qualities. In conclusion the paper that is presented compares the trials and tribualtions of one woman to a whole male dominated society. She is raped, beaten, abused, neglected etc†¦ just to be told to shut up and take it. This is what happens in our culture as well. Alice Walker’s portrayal of a women is not far from the reality of the modern world. The Color Purple has an awesome plot that follows a women’s delimas and choices through a life that is doomed from her youth, to have a portrayal of survival by going with the flow. .u5c861c16343f3bd65556453d0bde92db , .u5c861c16343f3bd65556453d0bde92db .postImageUrl , .u5c861c16343f3bd65556453d0bde92db .centered-text-area { min-height: 80px; position: relative; } .u5c861c16343f3bd65556453d0bde92db , .u5c861c16343f3bd65556453d0bde92db:hover , .u5c861c16343f3bd65556453d0bde92db:visited , .u5c861c16343f3bd65556453d0bde92db:active { border:0!important; } .u5c861c16343f3bd65556453d0bde92db .clearfix:after { content: ""; display: table; clear: both; } .u5c861c16343f3bd65556453d0bde92db { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u5c861c16343f3bd65556453d0bde92db:active , .u5c861c16343f3bd65556453d0bde92db:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u5c861c16343f3bd65556453d0bde92db .centered-text-area { width: 100%; position: relative ; } .u5c861c16343f3bd65556453d0bde92db .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u5c861c16343f3bd65556453d0bde92db .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u5c861c16343f3bd65556453d0bde92db .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u5c861c16343f3bd65556453d0bde92db:hover .ctaButton { background-color: #34495E!important; } .u5c861c16343f3bd65556453d0bde92db .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u5c861c16343f3bd65556453d0bde92db .u5c861c16343f3bd65556453d0bde92db-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u5c861c16343f3bd65556453d0bde92db:after { content: ""; display: block; clear: both; } READ: Arts in Education EssayEnglish Essays