Accounting And Finance For Managers Assignment

 

Financial Management and Control Assignment PGBM01

University of Sunderland, Business School Page 2

EXECUTIVE SUMMARY

 This report of Financial Management and control is base on fourparts. The first analyse the

 Arrowbell Company’s performance in

relation to profitability; liquidity; asset utilisation and investorsratios.Second part describes the feasibility to invest in the new machinein the light of four different appraisal method taught during themodule and critical evaluation of these methods. Third part analyze cost volume relationship and criticize theassumptions of the breakeven analysis in the light of the reality of 

today’s business environments.

Fourth Part describes The main sources of finance available tobusiness and the advantages and disadvantages of each source,Budgeting as a means of planning and control, relevance of committed fixed cost within short term decision making

.

 Thecalculations are available in Appendices.

 

ASSIGNMENT ON FINANCIAL AND MANAGEMENTACCOUNTING

Truck $10,000 purchase price of the truck. Less depreciation $ 1,000 amount deducted asa depreciation expense Net Truck: $ 9,000 net book-value of the truck.The $9000 simply represents the book value of the truck after depreciation has beenaccounted for. This figure says nothing about other aspects that affect the value of an itemand is not considered a market price.

Dual Aspect:

This concept is the basis of the fundamental accounting equation:

Assets = Liabilities + Equity

1.Assets are what the company owns.2.Liabilities are what the company owes to creditors against those assets3.Equity is the difference between the two and represents what the company owes toits investors/owners.All accounting transactions must keep this equation balanced so when there is an increaseon one side there must be an equal increase on the other side or an equal decrease on thesame side.

Objectivity:

The objectivity concept states that accounting will be recorded on the basis of objectiveevidence (invoices, receipts, bank statement, etc…). This means that accounting recordswill initiate from a source document and that the information recorded is based on fact andnot personal opinion.

Time Period:

This concept defines a specific interval of time for which an entity’s reports are prepared. This can be a fiscal year (Mar 1 – Feb 28), natural year (Jan 1 – Dec 31), or anyother meaningful period such as a quarter or a month.

Conservatism:

This requires understating rather than overstating revenue (income) and expenseamounts that have a degree of uncertainty. The rule is to recognize revenue when it is

RAHUL GUPTA, MBAHCS (1

ST

SEM), SUBJECT CODE- MB0025, SET-1Page

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