StudentShare solutions
Triangle menu

Accounting Evaluation And Forecast - Essay Example

Not dowloaded yet

Extract of sample
Accounting Evaluation And Forecast

Carter and Usry mentioned that “In Reality, planning and controlling are simultaneous, cannot be separated, and an interconnected process”. Within this elaboration we will evaluate performance of the “Aberdare - Super Service Mini Market” and furthermore describe Income Statement and Balance sheet forecast for planning purposes. According to the financial ratios, Aberdare posses an overall weaker performance, compare to the Pernarth mini market. The only ratios that exceed Pernart mini market are sales/operating assets ratio and the interest cover ratio. The sales/operating assets ratios present a slight lead on Aberdare’s effectiveness on using its operating assets to produce sale, while the interest cover ratio display Aberdare’s better performance on taking advantage of debts to finance operations. However, financial ratios should not be used as a sole instrument of measuring performance. According to available data, Aberdare’s sales in 2004 are amounted to $ 1,250,000 and the operating profit is $ 217,000. This has a relatively significant difference compare to Pernarth mini market, which produce a sales number of only $ 1,000,000 and operating profit of $ 190,000. Thus, in actual numbers, Aberdare mini market contributes more income to the business.
Pernarth
According to the financial ratio, Pernarth is overall better than Aberdare mini market. The ratios indicated that pernarth has a better performance in terms of:
1. Effectiveness of operation, displayed by the Operating Profit/Operating Assets ratio, Sales/Fixed Assets ratio, and Sales/Current Assets ratio. These ratios describe that Pernarth uses its assets more effectively to produce sales and profit.
2. Efficiency of operation, displayed by the Operating Profit/Sales ratio, Cost of Sales/Sales ratio, Sales/Stock ratio, Expenses/Sales ratio, and Sales/Stock ratio. These ratios describe that Pernarth's require less cost and expenses to produce equal sales number and profits compare to Aberdare's.
3. Liquidity of the mini market, displayed by the Interest Cover ratio, Gearing ratio, Current ratio, and Quick ratio. There ratios describe that Pernarth mini market require less debts compare to Aberdare mini market to run the business.

II.2. Weaknesses
Aberdare
As stated before, compare to Pernarth, Aberdare mini market display a slightly poorer performance. Most of the ratios display only small difference between the two store, however, significant different appears on Sales/Current Asset ratio, Sales/Stock ratio, Interest cover, Gearing and Quick ratio. The Interest Cover and Gearing ratio indicate that Aberdare has too much debt within its financial structure. The Sales/Current Assets ratio, Sales/Stock ratio and Quick ratio on the other hand, describe that the mini market employ too much current asset on the current year, especially too much stock.
Pernarth
The mini market is superior according to any measurement of the financial ratios, however, in real numbers, the mini market does not seem to generate as much sales and profit as Aberdare. Thus, relating to the fact that Pernarth is the most profitable ...Show more

Summary

According to Carter & Usry, activities of an organization can be divided to three large groups, which are Planning, Organizing and Controlling. Theoretical literature often divides these activities into different subjects…
Author : helga37
Accounting Evaluation And Forecast essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Accounting Evaluation And Forecast"
with a personal 20% discount.
Grab the best paper

Related Essays

Management Accounting: Performance Evaluation (Balanced Scorecard)
Performance measurement tools are also used by organizations to compare the desired performances with the actual performances and then actions can be taken to achieve the desired results by eliminating any kind of discrepancies. Performance management tools are very beneficial for organizations as it allows the management to forecast how the organization has performed and how the organization needs to go in future (Chavan, 2009).
10 pages (2500 words) Essay
Management Accounting and Performance Evaluation
In order to fully understand the problems and suggest recommendations to the company, a critical analysis has been provided regarding the management accounting control systems along with its two components- formal planning process and responsibility accounting.
9 pages (2250 words) Essay
Intermediate Accounting
Three Little Pigs Inc. is a public entity with three types of inventories viz. live hogs ready for sale, developing animals, and processed pork products consisting of loins, ham, and bacon. The Company maintains live hogs and processing plants at various locations. Also, there are live hogs in some locations which cannot be easily transported and processed.
3 pages (750 words) Essay
Financial Accounting Concepts

The author explains that Self Imposed Budget is known as a participative budget; it is a budget that is made with full participation and input from managers at all levels, thus naming it as participative. Input and participation of managers is an essentiality to proceed with success. The advantages is that the more concerned managers are involved.

2 pages (500 words) Essay
Intermediate accounting
The problems may be compounded due to losses resulting from the miscalculations. Nonetheless, by and large, seasoned livestock management such as the Three Little Pigs Inc. is
3 pages (750 words) Essay
Should Companies be required to forecast accounting data
We would try to keep the language as simple as possible so that we don’t complicate things right from the start. First thing you realize is that you would need to bake cookies so as to be able to sell them. For which you would require flour,
8 pages (2000 words) Essay
Modern Accounting Systems
The modern business environment has altered radically within a short period of time. Business technology has highly developed business functions and acts to levels not believed feasible in the past. “The function of accounting and business is possibly one of the most dependable functions in business”.
4 pages (1000 words) Essay
Critical evaluation of the international Accounting Standard and Financial Reporting Standard that applied on BRITIVC plc
oss the globe have accepted IAS and IFRS as their primary framework for the preparation of financial statements especially for the corporations that are conducting businesses in those territories. These standards serve a variety of purposes among which one of the major purposes
12 pages (3000 words) Essay
Write an evaluation of a published macroeconomic forecast
The Federal Reserve is body that is used to safeguard the economy of the US. View PDF version. Reducing concentration on future development of the US economy the growth in economy has slowed down that FOMC need to intervene. There has
2 pages (500 words) Essay
Financial and accounting
First, financial accounting primarily provides information for external users to make investing and lending decisions whereas management accounting provides information for internal users, usually the management, to make critical
6 pages (1500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation