Summary Management Accounting 278 year's work

1 semsester
st




Management
2020


Accounting
278
by: Alexandra Shtein

, Table of Contents
BUSINESS PLANNING: ................................................................................................................................... 1
RISK & RETURN: ........................................................................................................................................... 4
PORTFOLIO MANAGEMENT ........................................................................................................................ 31
COST ASSIGNMENT (OVERHEAD ALLOCATION) : ......................................................................................... 64
COSTING SYSTEMS: .................................................................................................................................... 86
PERFORMANCE EVALUATION ............................................................................................................................... 88
BUDGETS: ................................................................................................................................................... 95
OPERATING BUDGETS:.......................................................................................................................................... 96
CASH BUDGETS:.................................................................................................................................................. 102
THE BUDGETING PROCESS .................................................................................................................................. 105
VARIANCE ANALYSIS: ................................................................................................................................ 111
STRATEGY:................................................................................................................................................ 140
VALUATIONS ............................................................................................................................................ 168
COST OF CAPITAL ..................................................................................................................................... 206




0

,BUSINESS PLANNING:

Business plan:

• Detailed roadmap for the execution of future business strategy
• Usually plan 3 to 10 years ahead of time
• Links expected growth projections to existing business resources/capabilities
• Provides technical specifications for creating product/service

Objective ð to provide information to a specific audience for a specific purpose
(e.g. potential lender or existing shareholder)


Advantages:
• Realistic, integrated perspective on the ‘bright idea’
• Encourages teamwork between executive team and key personnel
• Predicts funding requirements to pre-empt liquidity problems
• Serves as proof of intent and commitment – easier to obtain finance
• Adds credibility for board of directors’ approval
• Creates timeline for getting PPE, licences and people and for trial phase
• Forces directors to focus on long term strategy
• Identifies need for expert advice and market research
• Review adequacy of IT infrastructure and internal controls
• Manage growth of company to avoid overtrading
• Each decision must be substantiated and validated
• Indication of management ability and commitment
• Can monitor progress against targets



Executive summary:
Background



Financial Products and
projections services




Executive
summary
Executive team Markets and
and key marketing
personnel strategy




Legal, social Operation and
and manufacturing
environmental process

Executive summary:

• Background/history of business
• Key concept or uniqueness of the product/service - ‘the bright idea’
• Consumer market information
• ð explain the market gap, potential pricing premiums, revenue
• Technicalities of production/service delivery
• Credentials of executive team and key personnel
• Financial projections
• How these funds will be spent
1

, PART 1:
BACKGROUND
• Overview of the business
• Vision, mission and objective
• Company history
• Corporate strategy and long term plans This is the business,
• Give sense of size and permanence (appears less risky) as it is today
• Key products, markets and customers
• Industry sector
• Structure of operation – manufacturing, supply and distribution channels
• Credentials of executive team and management



PART 2:
PRODUCTS & SERVICES

• Technical information (diagrams and specifications)
• Description of the life cycle of the product
The “bright idea”
• Explanation of its competitive advantage
• Business model - once-off sales, repeat business, after-sales services
• Differentiation or cost leadership
• Protection of intellectual capital through patents, copyrights or trademarks
• Unit costs vs pricing policy
• Quality control – certification and assurance


PART 3:
MARKETING & MARKETING STRATEGY

• Description of the market (size and market share)
• Industry growth rates and changes How we think the
• Expectations of demand, and determining factors “bright idea” will
• Details and market share of major competitors make money
• Details and market share of major customers
• Customer profile and demographics
• Size and credentials of sales team
• Advertising format and media
• Sales network




PART 4:
OPERATING & MANUFACTURING

• Stages of production process (including diagrams)
• Outsourcing vs manufacturing
• Quality control procedures and accreditation
Produce product /
• Inventory management
deliver service
• Location and distribution network
• Supply chain
• Property, plant and machinery – acquisition, replacement, maintenance, capacity
• Compliance with laws and regulations
• Labour supply management



2