Management And Financial Accounting

University: Mont Rose College

  • Unit No: 6
  • Level: Undergraduate/College
  • Pages: 13 / Words 3169
  • Paper Type: Assignment
  • Course Code: JNB517
  • Downloads: 30886
Question :

Finance is the crucial aspect in all the organization as it helps to manage all their business operations. kindly do explain all the important learning outcomes as mentioned below:

  • Explain various business structures and also their key differences with the legal requirements.
  • What is management and financial accounting?
  • What is stakeholder analysis and explain the various potentials of the stakeholders
Answer :


Finance is one of the crucial aspects for an organisation in order to manager their business operations more effectively. Likewise, every financial resources are utmost important for allocating all assets and liabilities over a particular time period. This project report is prepared on the basis of three business structure that is followed within Victoria Babies. Analysis of financial accounting and management is also being done in this report. Apart from this, an explanation of different financial statements is being discussed effectively. At last, identification of major potential stakeholders and their its benefits are mentioned clearly in the project (Renz, 2016).


Analysis of the different business structure

As per the mentioned case study, it has been seen that Victoria Smith has been setting up a small production company together with their parents. After earning a total turnover of £400,000 and one of the venture capital firms is investing a total of £700,000 into their business. The company have two options, first they need to take into account limited liability partnership and other one is private limited company. This particular structure is basically related to common partnership that are discussed underneath:

General partnership: It is an arrangement through which two or more people agrees to share all their assets and profit as well as legal liabilities of a business. Such partners would have unlimited debt which means their individual assist are more liable to partnership’s obligations.  This forms of partnership are does not have separate legal entity that all partners consist in the form cannot have any legal right and protection against all liabilities (Cusworth and Franks, 2013).

Limited liability partnership: It is one of the effective partnership in which some or all partners would have limited liability. The combination of both partnership and corporation is taken into account. The main parts of this is that individual assets of partners are not used for the purpose of paying off their debts which are kept by the company. As per this form, there is not as such requirements of minimum capital contribution (Limited liability partnership, 2017). This particular business firm is more simple and easy to form because of less government restrictions.

Private Liability company: According to this particular company which is run privately and owned for operating a small business. The firms are having limited to having 50 or less shareholders and all the shares forbidden from being publicly traded. It has been determining that a company can become an independent body at the time get incorporated. This particular form of business operation that is having distinct lawful structure and perpetual sequence (Conway, 2013).

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Legal requirements

General partnership

Limited liability partnership

Private liability company

Under this, every individual required to file its own tax return on the basis of their profits. In case of absence of dead, all of them need to share equal gains.

In this, company need to get registered and its yearly financial report are required to be associated with regulatory bodies.

Such firms would require to operate with minimum of 2 members under concern act.


According to the all above mentioned business structure, Victoria Babies would need to make investment in private liability company. Because they can easily be able to transfer all shares in more effective manner. Company is having large amount of margin than partnership.


Evaluation of financial accounting and management

According to the reliable finance trainee, the primary role and responsible is to make analysis of all financial and management accounting transactions effectively. Both of them is contributing equally in proper functioning of the department. In order to understand more clearly, it is important to examine both of them individual as mentioned underneath:

  • Management accounting: It is known as reliable provision of financial information and advice company for the purpose of using organisational and other accounting transactions. It is an effective process that deal with recording of financial transaction on timely and accurately basis (Cowling and Mailer, 2013). The outcome of using this accounting is framed into periodic report for company’s department manager and owner of the Victoria Babies.
  • Financial accounting: It is said to be effective areas of accounting that is related with overall summary, evaluation and reporting of accounting transaction that are pertaining within an organisation. This consists of formulating financial reports that are available for the purpose of public consumptions. These accounts are basically prepared at the closing of financial year.

Difference among both accounting

Basis for comparison

Financial accounting

Management accounting


It is an effective accounting system that target on formulation of financial reports of Victoria Babies.

This types of accounting system which would provide relevant data to the manager in order to formulate policies, plan and strategies.


All finance related data is being recorded into this accounting statements.

Under this both monetary and non-monetary transaction detail is being taken into considered.


It is prepared for the purpose of providing information to the external stakeholders.

This is prepared in order to plan and make effective decision making process.


The accountant need to summarised all reports regarding overall financial position of the Victoria babies.

It used to complete and prepared detail reports regarding different information about the company.


Analysis of various financial statements with mathematical examples

It is important for the company to make analysis of financial statements in effective manner so that chances of mistakes can be remove quickly. It consists of cash flows, profit and loss statements and balance sheet. Such kind of reports is being used to reflect entire performance of an organisation. These reports analyse, whether the business is profitable for the business. All the statements are prepared through using making consultant with finance analyst as well as accountant so that proper information can be gather during the time. Such kind of reports used to follow particular statements that can used to provide accurate image of Victoria company (Altenburg and Pegels, 2012). Financial reports are prepared by the management in order to record all the essential transactions that are made within an accounting period of time. It assists in future planning and estimating all statements that are developed for the purpose of providing information to external parties. The statements with mathematical examples those are discussed underneath:

Cash flow statements: It is one of the detail documents that consists of entire cash inflows and outflows. Such kind of details is being prepared with proper intention to measure overall companies cash ability and position for paying all their legal obligations. It is prepared by taking data from income and balance sheets. By the help of this, investors used to analyse all effective business activity. In respects to calculate total cash surplus and deficit they need to determine opening and closing stock of 80000 and 120000 respectively.

Content: In order to prepare cash flow statements, it is vital to analyse all three activities those are responsible enough for attaining more effective outcomes in near future time. This seems to be divided as per the intention of analysing opening and closing stock of an organisation (Simonovic, 2012).

Reliable: Cash flow statement is significant enough for presenting overall cash inflows and outflows of Victoria babies. It comes to be liquidity evaluation, cash flows data that is more reliable than balance sheet or profit and loss statement. It will contribute people to gauge Victoria ability to pay off their debt obligations.



Cash inflows:






Total cash inflow


Cash outflow:


Purchase of raw material






Petty expenses


Interest on loan




Total cash outflow


Opening balance


Net cash flow


Closing balance


Profit and loss statements:

It an effective part of financial statements that is prepared by the accountant by taking all essential information from various departments. It will indicate revenues and expenditure that are incurred during a specific period of time. By using this Victoria Babies company can easily be analysing how revenues would be transformed into total net earnings. The Primary aim of formulating such kind of statements is to determine net income of an organisation.

  • Content: It comprises of two important parts such as income and expenses. At the incomes side, sales revenue, investment and interest earned can be taken into account. while expenses consist of cost to company such as rent, salaries, insurance etc.  
  • Relevance: It is important for the company to determine total net profit they are getting within an accounting period of time (Singer and et. al., 2011). This types of statements used to reflect true and fair market position with an organisation.





Sales revenue










Property rates




Loan interest








Net profit


Balance sheet: It is one of the primary statement for the company that is prepared for the purpose of analysing overall financial position of the Victoria babies. This particular records are prepared by the financial managers or any other experience and capable persons. Some of them are specific information are mentioned underneath:

Content: It would be design by taking specific information about all types of assets and liability Victoria company is having with them.

Relevance: The main objective of preparing total net assets presented with the company as well as overall debt presented with them.


Explanation of different types of stakeholders

It is important for the Victoria Babies to determine all their stakeholders that are directly or indirectly related with their business operations. Some of the parties along with all interest financial data that are mentioned underneath:

Internal stakeholder: These are considered as those individual that are associated with the company from the internal level. Some of them are:

  • Shareholder: They are related to those members that are showing some interested in the company for the purpose of getting maximum stake or profit during the time.
  • Investors: Such kind of parties mainly used to invest their capital in various projects of Victoria babies. They are mostly interested in overall return on invested ratio the company is given to them (Turk, Wilson and Cahana, 2011).

External stakeholder: These are said to be individual or team perform their job from the outcomes of the nations. External stakeholder used to impact their long term growth of Victoria babies. Some of them are:

  • Creditor: Such kind of stakeholder usually lend all their money to the company. Most of the time they are interested in solvency ratios earn by Victoria Babies in an accounting period.
  • Supplier: They are the one who supplies raw material to the Victoria babies. The supplies distinguished from a contractor that is more commonly includes specialised input during the time of delivery.
  • Customers: It has been found that a corporate stakeholder used to get affected by all the actions of Victoria babies as a whole. A stakeholder is any kind of entity that has specific interest, tangible or intangible in overall growth of an organisation.


From the above information, there are various important aspects is taken into account. on the basis of collected data. Certain finding is being taken into account. such as:

  • Public liability company is much more suitable for the overall growth and development of Victoria Babies.
  • Both accounting is crucial for the company to prepares as one provide current position while another implement net policy to deal with critical situations.

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After collecting necessary information about various types of business. LLP company is much more effective and reliable for getting more effective growth in near future time. All the stakeholder must be liable to get various information about the current position of the company in order to get interest of them in for long time.


From the above project report, it has been found that managing financial recourse is primary responsible for the manager of the any company. It will be providing more reliable and sustainable growth opportunity to Victoria Babies in near future time. For this purpose, various types of business structure are being helpful for an organisation. Use of various financial statements in decision making is also analyse effectively. Types of stakeholders that are associate with the company is mentioned properly in this report. Overall analysis is done to attain more reliable growth and stability in coming future.

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