Unit 6_5039_ Assignment 1 frontsheet

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5038-asm2 pass nhe

Management Accounting (Trường Đại học FPT)

5038-asm2 pass nhe

Management Accounting (Trường Đại học FPT)

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ASSIGNMENT 02 FRONT SHEET

<b>Qualification BTEC Level 4 HND Diploma in Business Unit number and title Unit 5: Accounting Principles </b>

<b>Student declaration </b>

I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that making a false declaration is a form of malpractice.

<b>Student Signature </b>

<b>Grading Grid </b>

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<b> Summative Feedbacks  Resubmission Feedbacks </b>

<b>Grade: Assessor Signature: Date: Internal Verifier’s Comments: </b>

<b>Signature & Date: </b>

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<b>I. Introduction ... 2</b>

<b>II. Producing financial statement of ABC company (TASK 1) ... 2</b>

<b>P3. Financial statement of ABC company. ... 2</b>

<b>II. Analysing and Interpreting the Financial Statement of the PAN Group (TASK 2) ... 10</b>

<b>P4. Performance financial ratios from a set of financial statements. ... 10</b>

<b>P5. Comparison of PAN group in 5 years period. ... 14</b>

<b>III. Business plan for next year of HAC company (Task 3) ... 15</b>

<b>IV. Conclusion. ... 3</b>

<b>References ... 4</b>

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I. Introduction

As an accountant of the educational company (ABC), I will furnish a report producing a financial statement giving additional information from the following descriptions that require correcting entries on December 31st as displayed in the spreadsheet together with the raw data for an

unadjusted trial balance of ABC on December 31st, 2020. In addition, this article will also conclude by analyzing and interpreting by conducting the ratio analysis of the PAN Group to identify the company's strengths and weaknesses so that management can create business strategies and

Finally, as a cooperative worker of the start-up business (HAC), I will support HAC with budgeting and how it may be applied to assist effective control and decision-making and guide resource allocation that is both efficient and effective.

II. Producing financial statement of ABC company (TASK 1)

P3. Financial statement of ABC company.

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ABC, Capital 65,000

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<b>(f) Account receivable Tuition fee earned </b>

<b>Alonzo Trial Balance as of 31 December </b>

<b>Unadjusted trial balance Adjustment Adjusted trial </b>

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<b>Total</b> 331,700 331,700 54,260 54,260 353,760 353,760

<b>Income statement for Alonzo for the year Revenue </b>

<b>Operating expense </b>

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<b>Statement of owner's equity for </b>

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Unearned training fee 25,800

<b>Equity </b>

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<b>II. Analysing and Interpreting the Financial Statement of the PAN Group (TASK 2) </b>

<b>P4. Performance financial ratios from a set of financial statements.</b>

(PAN, 2021)

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(PAN, 2021)

According to the 2021 Pan Group’s annual report, we can calculate the profitability ratio and efficiency ratios of the company.

𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕 𝒎𝒂𝒓𝒈𝒊𝒏=

<sub>𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑠</sub><sup>𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡</sup>

× 100% =

x 100%= 18,56 %

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PAN Group earnings per share (EPS)

(PAN, 2021)

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P5. Comparison of PAN group in 5 years period.

<b>Financial indicators according to the last 5 years of Pan Group</b>

<small>Gross Profit Margin (trailing 4 quarter) %ROA (trailing 4 quarter) %</small>

<small>ROE (trailing 4 quarter) %</small>

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According to the first graph, it can be seen that through the span of five years 2017 to 2021, Gross Profit Margin (GPM), Return on Asset (RoA), and Return on Equity (RoE) follow a similar trend line. According to the statistics in the table, 2017 was the most proficient year for GPM, RoA, and RoE. They were at their peak in the span of the next five years, with GPM accounting for 23.01%, RoA accounting for 7.84%, and RoE accounting for 10.5%. In 2018, all three statistics plummeted, with GPM hitting its lowest. GPM went down to 17.72%, while RoA only went down to 4.34%, and RoE hit 6.6%. Approaching the end of 2019, two contradicting trends can be seen. Since hitting its lowest, GPM rose to near its peak, at 21.22%. On the other hand, RoA and RoE continued to plummet, with RoA decreasing to almost half of what it was the previous year at 2.55%, and RoE went down to just 4.25%. 2020 was the worst year in general, with all three statistics going down, and two out of the three hit their deepest. Those statistics were RoA and RoE, hitting 1.7% and 3.06% consecutively. GPM also decreased to 18.45%. 2021 saw a comeback for GPM, RoA, and RoE. All three statistics saw an increase in their percentage. GPM increased to 18.93%, while RoA increased to 2.25%, and RoE to 4.31%. To sum up, the trends of the three statistics were similar, showing a continuous decrease in the first four years, except for GPM, seeing a sharp decrease and a comeback, but generally still went down in the first four years, and all three statistics made a come back in 2021.

The second graph shows the transition of EPS throughout the same five years, from 2017 to 2021. This graph shows that the trend was similar with that of the previous three statistics. 2017 was also the peak year for EPS, as for the previous three statistics, sitting at 3.16 VND per share. How ever, in the next three years, the earning per share continuously plummeted. In 2018, earnings per share went down to 2.46, and in 2019, it went down further to 1.49 VND per share. In 2020, EPS hit its lowest, sitting at just 0.87 VND per share, going down 3.6 times that of 2017. Finally, similar to the trend of GPM, RoA, and RoE, 2021 was the comeback year for EPS. Although not sharp, it made a comeback. In 2021, EPS hit 1.37 VND per share, rising 57% from that of the previous year.

III. Business plan for next year of HAC company (Task 3)

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<small>DecJanFebMarAprMayJuneJulyAugSepOctNovDec</small>

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<b><small>Total outflows11532.54813483.28815806.1612618.19613545.28815192.82412053.26812291.06416865.89614215.98815352.0828478.32</small></b>

<small>Opening cash balance10003993.4525522.1642514.0044367.8084754.525383.69610070.42815599.36418335.46824585.4831319.4</small>

<b><small>Cash balance/Net cash</small></b> <small>3993.4525522.1642514.0044367.8084754.525383.69610070.42815599.36418335.46824585.4831319.426169.08</small>

<b><small>OVERHEAD COST</small></b>

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<b>P7: The benefits and limitations of budgets and budgetary planning, and control for an organization. </b>

Utilizing resources efficiently and accomplishing overall organizational goals both depend on budgeting. But this method also has both

<i><b>benefits and drawbacks that users need to consider. Budgets and budgetary planning, and control have the following advantages: </b></i>

Budgeting forces and encourages management to do a quick analysis of its issues. It inculcates in managers a sense of caution and care, as well as the need for thorough research before making judgments. Budgeting, which is a "plan for spending," is a useful way to manage a company's revenue and expenses. Budgeting gives managers a tool to periodically assess, test, and define managerial policies and goals as standards for the entire organization. Budgeting assists in allocating money and other resources to the most lucrative

areas. Management can decentralize responsibility through budgeting while maintaining control of the company. It quickly identifies organizational flaws, inefficiencies, and aberrations that can be corrected to accomplish the desired goal. Budgeting in an organization

<b>Budgeted Unit SalesBugeted Unit PriceBudgeted Total Sales</b>

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fosters the development of a "cost-conscious" mentality, encourages the efficient use of resources, and fosters a profit-minded culture throughout the entire organization. It highlights how much should be spent in to achieve an objective. It offers a standard, foundation, or yardstick for gauging how well departments and employees perform inside organizations. Managers can assess their actions and

accomplishments and take the necessary steps to enhance their performances. Budgeting promotes healthy competition, offers motivation to work effectively, and gives each employee in the organization a feeling of purpose. All of these advantageous elements improve output and worker productivity (Agarwal, 2021).

<i><b>While budgeting serves many important purposes and offers numerous benefits for an organization, it also has some restrictions that </b></i>

should be closely examined.

<b>Controlling the budget based on estimates: Planning, budgeting, and forecasting are not exact sciences since they rely on estimates and </b>

judgment that may not be 100% accurate. A budget is, at most, an estimate because no one can predict the future with certainty.

<b>Requires the participation and cooperation of everybody: The active collaboration of all relevant departmental personnel is necessary </b>

for budgetary control to be successful.

<b>Not Being Flexible: Budgets are created in advance using projections. Later, certain adjustments might be desired, but the budget </b>

estimate might not change. As a result, flexibility may not always be present.

<b>Costlier Tool: The employment of budgetary control techniques is expensive. Most small firms are unable to afford the cost. </b>

<b>Constant Inspection: Constant checks are required for fiscal control to succeed. These checks must be carried out to regulate a variety of </b>

<b>activities. </b>

<b>Relies on the allocation of obligation: A clearly defined organizational structure is necessary for budgetary control to be successful. The </b>

<b>roles required for control are outlined in this instance. </b>

<b>Relies on Accounting Data: Accounting data is necessary for budgetary control to be effective. According to the requirements of budget </b>

centers, proper accounting records should be kept for this purpose.

<b>Budgetary Control Takes a Lot of Time: A budget's establishment takes a long time. As a result, management occasionally loses patience </b>

and interest and expects too much too soon. The relevant parties must be informed of the budgeted plan and led, taught, and educated on the essential procedures, approaches, and goals of budgetary control. All of this demonstrates that substantial knowledge, time, and expertise are needed to accomplish good budgeting control (Tamplin, 2021).

IV. Conclusion.

To sum up, the report above provides information about the financial statement of ABC company and a comparison of Pan Group’s performances over time using ratio analysis and financial conjuncture illustrated through 5 years period graph. Moreover, the article also

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products a business plan for next year of HAC company including sale budget and selling expense, purchase of material, overhead cost, cashflow statement and budgeted income statement. In addition, the advantages and the disadvantages of budgets and budgetary planning, controlling are also discussed.

References

<i>Agarwal, R., 2021. Advantages and Limitations of Budgeting. [Online] </i>

Available at: [Accessed 28 10 2022].

<i>PAN, 2021. 2021 Annual report. [Online] </i>

Available at: [Accessed 26 10 2022].

<i>Tamplin, T., 2021. Limitations of Budgetary Control. [Online] </i>

Available at: [Accessed 28 10 2022].

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<small>1.1passed P3,P4,P5,P6,P72.11. Strengths</small>

<small>- Student introduced the scenario and the structure of the report properly</small>

<small>- Student accurately provided the adjusted trial balance based on additional information, student showed proper income statement, owners' equity and balance sheet.</small>

<small>- Student accurately highlighted specific dimensions in financial statement of PAN Group in 2021 and applied accurate formula to calculate the ratios for all part, student showedgood performance so far.</small>

<small>- Student analyzed the horizontal trend for PAN Group in 2017-2021 periods, student explained the meaning of ratios and evaluated the business performance based on Grossprofit margin, EPS, ROA and ROE, specific chart provided.</small>

<small>- The results for cash budgets are all accurate, student showed proper calculation for the net cash of HAC properly. - Student discussed the benefits and limitation of cash budget clearly</small>

<small>2. Weakness</small>

<small>- Some minor error in calculating the financial ratios in the financial statement, student should check the number carefully- Student should analysis the trend specifically in terms of ratios</small>

<small>3. Improvement</small>

<small>- The presentation and critical analysis skill should be improved.Final result: passed P3,P4,P5,P6,P7</small>

<small>Assessor Name: Do Thu TrangDate: 30 Oct, 2022</small>

<small>- Overall, major requirements have been met</small>

<small>- The trail balance, income statement and balance sheets are correct.- Budget are presented appropriately. </small>

<small>Weaknesses: </small>

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