This website uses cookies to ensure you have the best experience. Learn more

Accounting For Managers Essay

1227 words - 5 pages

Assignment No. 2
Bhagyanagar India Ltd.:
Bhagyanagar India Ltd. Is a company working under the telecom sector & is unified in 1985. It is a share of surana group. Nonferrous & ferrous are the major product of the company. Here, we have to analyze any one company’s balance sheet & profit and loss account of 5 years from the previous assignment to forecast the company’s working for year 2013-2014.
*
PROFIT & LOSS ACCOUNT |
|
  |   |   |   |   |   |   |   | PROJECTED |
SR.NO. | PARTICULARS | 2008-2009 | 2009-2010 | 2010-2011 | 2011-2012 | 2012-2013 | CAGR | 2013-2014 |
1) | SALES | -5.61% | -7.96% | 6.58% | 6.41% | 4.44% | 1.74% | 5.00% |
2) | EBIT | -59.08% ...view middle of the document...

13% | -17.59% | 2.77% | -48.35% | -13.67% | -17.69% | -16.00% |
  |   |   |   |   |   |   |   |   |

* FINANCIAL FORECASTING FOR YEAR 2013-2014:
Forecasting for the year 2013-2014 has been done after comparing the balance sheet and profit & loss account, CAGR & PESTEL effect on the company. CAGR (Compound Annual Growth Rate) of the turnover is obtained as 1.74% and also the Profit CAGR is -17.86%. On this basis the Projected turnover for year 13-14 will be = 20676 + 1.74% = 21036.8 Lakhs.
* As the company sale the scrap & have investment activities every year, the other income of the company is getting fluctuated. On this basis other income is forecasted to increase on an average of Rs.5 lakh.
* Increasing trend is noticed in employee’s expenses since last 5 years by 2%.
* As per last year trend & current market rate, financial & interest charges of short term & long term borrowings is considered to be 12%.
* An increase in noticed of 5% every year in Trade receivables.
* 13.90% of turnover is taken to be inventories as the company practices trend of keeping inventories.
* As the company is having assets of high value, depreciation is taken to be 30% of total fixed assets. EG: Wind Mill including amortization of lease rent fixed by company of RS. 512,630/-.
* As per the laws of income tax, tax expenses are to be taken as 30.9%, tax rate to be 30% & Cess rate 3%. Asset turnover ratio will be 1.20%.
* An assumption is made that there are no prior period taxes are existing & company has no exceptional items to be debited.
* Short term provision includes bonus provision for employees of Rs.5 lakh paid every year & dividend declared to be 20%.
* As the recession hit the market & low demand from 2008 to 2011, there was a negative growth in sales. Company started to recover from 2011 from which the forecasting is that sales will have an increase of 5-6% in 2013-14. Also the company proposed about solar water heater & copper foil cable, turnover is expected to increase by Rs.20 crore.
* In 2012, company transferred its 1 windmill to its subsidiary company, % of fixed assets came down by 10%. As the company disposes of its old asset, an average projection of 1.5% is made.
* On the basis of inventories & trade receivables of the company, current asset projection is to be made. So it is taken at the CAGR rate i.e. -16.00%.
* Since the company is keeping the dividend at 20% from last 4 years, it is projected to be the same for the next year. Equity share capital will be stable.
* Borrowing is projected to be decreased by 2% next year as the company is writing off its borrowings by paying its fixed annual installments.
* As the interest expenditure of the company...

Other assignments on Accounting For Managers

Financial Statements Essay

1525 words - 7 pages accounting is to provide economic financial information for investor, creditors, and other external users. Accounting identifies and records all activities that effect the organization financially. Accounting is a means of communicating the numbers. The three basic activities in accounting identify, records, and communicate the economic events of an organization to interested users (Weygandt, 2008). One example of an economic event is telephone

Costing Methods Essay

377 words - 2 pages higher net income than variable costing” (Kimmel, Weygandt, & Kieso, 2011, p. 1003). Variable accounting allows managers to see how cost affect the business, allowing the manager to make better decisions. Absorption costing allows for reporting of higher net incomes and is a generally accepted accounting principle for reporting net incomes. For reporting net income, the Polk Company will use the absorption costing method. To determine how

Business Communication - Schoolanduniversity.Com

308 words - 2 pages Riordan Manufacturing. Other forms of communication may not have been better, but attaching JJJ’s financial reports to the memos may have benefitted the managers. The managers may not understand the financial reports, but the accounting team could have highlighted the information used to determine if JJJ was financially stable or not. Attaching these reports may have allowed for a better understanding of how the accounting team made the

Usefulness Of Cost Volume Profit Analyisi As Amangerial Concept

2473 words - 10 pages THE COST STRUCTURE TO DECREASE COST ULTIMATELY DEGREE OF OPERATING LEVERAGE DEGREE OF OPERATING LEVERAGE IMPORTANCE FOR MANAGERS SALES MIX . CASE TO STUDY. LIMITATION OF CVP CONCLOUSION REFERENCES 2  DR.MOADE SHUBITA "USEFULNESS OF COST VOLUME PROFIT ANALYISI AS AMANGERIAL Concept" By samya Alakhdar , Dr . Moade Shubita , NYIT –AMMAN –JORDAN FALL-2011. Key words :managerial accounting , cost accounting , CVP. ABSTRACT: In order to

Accounting

4883 words - 20 pages developing of financial reporting, accountants have had to repeatedly deal with some basic conceptual tensions that arise due to the very nature of accounting transactions and events. These tensions have colored and influenced debates on reporting controversies over the past century. In this paper, we identify and analyze four such sources of tension. For the sake of concreteness, we cite several illustrative examples of specific financial reporting

Financial Statements

1502 words - 7 pages Accounting and Financial Statements Vern Rennier Upper Iowa University Accounting and Financial Statements In this essay I am going to explain and identify external users of accounting information and give detail on the main characteristics and how these characteristics and the conceptual framework develop the benefits of financial statements for external users. Financial accounting includes information distributed to external users

Earning Management

1173 words - 5 pages as write-downs, provisions for restructuring. But current non-core charges increase core earnings in future years, through lower amortization and absorption of future costs. As a result, managers tempted to ―overdose on non-core charges, thereby putting earnings ―in the bank also called cookie jar accounting. Conclusions The concept of the earnings management is difficult to define and very subjective to decide. I believe that earnings

Negotiation Article

617 words - 3 pages integrative strategies. The article shows that auditor client management negotiation is often used between partners and client managers. On the other hand, managers attempt to use auditor client manager to solve problems that may occur with financial statements. The article proves that managers do intend to use compromising strategies whereas partners tend to use integrative strategies. The findings are based on accounting procedures

The Earnings Management Issue Of Worldcom Case Study Report

2231 words - 9 pages ) concludes that earnings management generally involves some level of deceptions, and its accounting manipulations usually motivated by negative behaviours such as opportunistic maximization and avoiding debt covenant violations. Nevertheless, others argue it is unreasonable for managers to manage short-term earnings which will be adjusted in future, and it is a way of releasing blocked inside information (Healy and Wahlen, 1999) and so on. 3.2

Automation Process Of Ais

839 words - 4 pages been encountered in using the industry specific software most likely have already been repaired, which means the software is up-to-date and ready for use (Visco Venture Information System, 2005). Team A recommends automation for three main areas of Kudlers accounting. First, the recommendation for Kudler is to integrate the inventory into the software so the ordering process is simplified, which allows the store managers to focus on

Bsa 375

406 words - 2 pages listing the stakeholders who will be a part of the project their roles and responsibilities. In this project stakeholders will be as follows: Kathy Kudler, president, officials & managers, and she will be the project vision/resources for the overall project. Kent Vesper, Laurie Priest, and Juanita Lopez, store managers, officials & managers will act as a liaison between the analyst and the primary stakeholder Kathy Kudler. Harvey Stephens

Similar Documents

Management Accounting As Eyes And Ears Of Management

449 words - 2 pages Business owners often use management accounting to track, record and report financial information for managerial review. Management accounting does not usually follow any national accounting standards. Business owners can design management accounting systems according to their company’s business operations or management’s need for business information. Management accounting has several advantages. These advantages usually

My Life Essay

1113 words - 5 pages rely more and more on the parent company. What is the products division, or region division? What is the global efficiency or market reaction? The managers have to face a difficult problem. Since the 1990s, management accounting field is seeking for new development, the development of a series of new decision making tool and management tools, including considering the enterprise the current and future state of uncertainty for the enterprise to

Managerial Accounting Essay

374 words - 2 pages Management accounting is concerned with the provision and use of accounting information to managers within organizations, to facilitate the managers in their decision making and management control functions. Unlike financial accounting information (which, for the most part, is made publicly available), management accounting information is used within an organization and is usually confidential. (Jiambalvo) The distinction between traditional

Mangement Accounting Essay

1595 words - 7 pages Introduction Managerial accounting is concerned with providing information to managers- that is, to those who are inside an organization and who direct and control its operations. Managerial accounting can be contrasted with financial accounting, which is concerned with providing information to stockholders, creditors and others who are outside an organization (Garrison and Noreen, 1999). Managerial accounting information includes