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Introduction

The smooth operation of an organisation depends upon proper managing of decision on business operation and allocation of resources and funds. The support of the decision on the business work helps in the proper availing of organisational success. In the following report the strategic decision made for the proper achievement of success is dealt with. Along with the rise in the better requirement of proper availing of resources, the success rate of organisation is depended upon the interpretation of the financial statements and the resources of the organisation which is considered to be Marks & Spencers. .

LO1

1.1 Identifying, calculating and interpreting key performance ratios from an organisation’s financial statements

1.1.1 Interpretation of efficiency, liquidity and financing ratios

The interpretation of the efficiency ratio helps i the better understanding of the efficiency of the organization in dealing with unforeseen situation. The liquidity ratio marks the situation of the organization in which the organization is capable enough to pay off the organisational debt.

1.1.2 Interpretation of Investment ratios

Interpretation of the investment ratios helps in the better understanding of the organisation, in this case Mark’s and spencer's investment in the outside market. The achievement of the proper interpretation of the investment ratio helps in the better understanding of the investment situation in the organization.

1.1.3 Recommendation of how performance can be improved

The performance in Marks and spencer’s can be improved with the ride in the better allocation of the cash in the organization. The support of the cash flow analysis in the organisation would also helps in the betterment of the performance of the organisation

1.3 Using financial statements for evaluating comparative performance

1.3.1 Using of financial statement and online data to compare between between competitors and industrial averages

The using of the financial statement in the context of online data regarding Marks and Spencer’s helps in the better achieving of the success in the interpretation of the organizational operation. The value of the organisation is better understood by the analysis of the financial statements.

1.3.2 Use of industry comparison information and subscriber intelligence services

The intelligence services in an organisation generally deals with the ideas and the innovation views of the organisation. The support of the organisation is better managed by the proper usage of the intelligence services of the organisation

LO2

2.1 Evaluating several methodologies as well as approaches to the costing methods of services, functions, products and activities

2.1.1 Treatment of direct and indirect cost in costing product and services

Direct costs are the cost incurred directly in the process of production and the indirect cost are the cost incurred in the operation in directly related to the production sector. Indirectly costs salaries and direct cost is wages.

2.1.2 Description of different cost treatment of job process and contracts

There are mainly three types of job cost contract for the contracts. The fixed price or the lump sum contracts, time and material contracts and the cost reimbursable contracts are namely the types of the job cost in relation to the job cost contracts

2.1.3 Features and consequences of absorption costing

Absorption costing mark the per unit cost of the organisation. The fixed cost of the organisation simply divided by the number of units manufactured.

2.2 Using methodology on marginal cost for supporting decision making procedures of short term

2.2.1 Difference between fixed and variable cost

The costs which are likely to change in the next moment or period is called variable cost and the cost which are likely to remain the same for the coming years is called the fixed cost

2.2.2 Cost-Volume-Profit analysis and short term decision analysis

The cost volume profit analysis is depended on the volume of product sold on a price in relation to the cost of the product. The short term decision analyses are based on the calculation related to the changes in the coming or nearby future.

2.2.3 Relevant cost and application to decision making

The cost and the relevance in the decision making are prime factor, as the decision made are based on the cost spend by the organisation. The support of the organisation is thus provided by the relevant ost and application.

LO3

3.2 Using methodology on cost management for supporting business excellence, lean enterprise as well as value chain analysis

On the proper understanding of the values of the lean enterprise the proper ,method that can be availed for the better understanding of the values and the ideas is the secondary form of data collection. The secondary form of data collection helps the further understanding of the operation of the lean enterprise and the values of the chain analysis. The use of the research articles by other writer would helps in the better understanding of the situation and the importance of the organisation.

3.2.1 Relationship between lean enterprise, business excellence and value chains

As inferred by Liu et al. (2016, p.358), the lean enterprise model helps in the understanding the smooth operation of the organisation it is related to the business excellence and value chains as it monitors the objective of the organisation and optimises the enterprise flow. It keeps in check the useless flow of information. The lean enterprise also helps in the focusing of the customer and thus leads to the rise in the reputation of the organisation in the society.

3.2.2 Contribution of financial analysis on cost benefit of quality, throughput accounting, analysis of waste, value analysis of activity chain

Analysis of the benefits gathered for the cost benefit quality analysis helps in the better management of the organisational success and the proper understanding of the situation of the organization operating in. It is evident that the rise in the operation of the organisation is well cleared out of the management. The management of the waste and the analysis of the value in the activity chain also marks the opportunity of the organisation.

3.2.3 Resource audit of value chain to measure effectiveness of each element and competitive advantage of each process

Audit plays an important role in the managing of the organisation operation. Resource management and audit helps in the better understanding of the situation and the allocation of the resources in the organisation. It is evident that the resource in the organisation needs to be well allocated for the better achievement of the success and the proper meeting of the organisational objective.

3.3 Preparing and presenting accounting information of strategic management for analysing investment in an advanced manufacturing technology as well as supporting competitive strategy

3.3.1 Identifying place of management accounting by analysing response to strategic positioning, competitors and competitive advantage

As supported by Durand et al. (2017, p), the competitive advantages in the organization is well managed and determined by the development in the organizational process of decision making. The decision making is to be settle in terms of the position of the organization. Better positioning and proper analysis of the competitors helps in bringing out the competitive advantage of the organisation.

3.3.2 Appraising investments in the advanced technology 

Investments in advanced technology are of prime importance as the growth in the organisation depends upon the proper implementation of the technology. The investment in the advanced technology helps in bring in more production and results in hike revenue. The opportunity also increases with the broadening of the area in technology field.

3.3.3 Using balanced scorecard for supporting achievement over vision and strategy 

As supported by Mechler, (2016, p.2122), the opportunity provided by the usage of the scorecard is mainly in gaining advantages over the strategies in the organization. The organisational support is more effectively achieved with the better achievement of the vision and strategies. The vision and the strategy are correlated to each other as there is strong relation between them in bringing in the success of the organisation.

LO6

6.1 Appraising projects on capital investment utilising alternative methodologies

6.1.1 Distinction between profit and cash and the relevance to long term investment proposals

Profit is the earning of an organization from the expenses and the saving of the organisation. The profit of an organisation is generally of long terms benefits whereas the support of the cash is current basis and is not much helpful in the organisation. The profit can be used in the organisation in further future for the operation, but the cash is all in current basis.

6.1.2 Accounting rate of return, Payback and Net present value of an investment proposals 

Average accounting income: (25+65+75)/355

Now, the accounting rate of return is 55/280*100=19.6%

Payback

Opening Balance (12000) (12000) (2520) 7000 16000

Cash flow      - 9000 9000 9000 11000

Ending balance (12000) (2500) 7000 16440 27000

Payback period      1.27 years

NPV

Annua; cash flow 1-6 2200 3.326 7317

Initial investments present (6000) 1.000 (5000)

NPV 2317

6.1.3 Features and advantages of the alternative investment appraisal techniques

The advantages if the investment appraisal technique lies on the smooth understanding of the investment values and the techniques. On the other hand the investment appraisal technique does not value money in time. The valuation of time ion aspect of the money would result in the better achievement of the appraisal techniques.

6.2 Calculating cost of capital of any organisation and explaining limitations of uses

6.2.1 Calculation of equity, preferences and debt

Short term debt 500000

Long term debt 1000000

Total Debt 1500000

Equity in common 500000

Equity in preference 250000

Additional capital paid 6000000

Retained earning 3250000

Total share 10000000

Debt Amount Payment Principal Interest % of payment

1st mortgage 300000      1896 271 1625 86%

Auto 1 25000 599 453 146 24%

Total 325000 2495 724 1771

6.2.2 Weighted average cost and cost of capital using market and balance sheet values

Cost of debit

Estimated all the factors are in debit value 7.0%

Marginal Tax rate 28.0%

Cost of debt  included 5.0%

Cost of Equity

Risk free rate of return as given 3.0%

Beta Relevered 1.035%

Risk on premium market 8.0%

Cost on the equity as deduced 11.1%

Weighted average Cost of capital

Debt on market capital ratio to be provided 10.0%

Equity to the market on capital ratio 90.0%

WACC 10.5%

6.2.3 Merits and demerits of different approaches of calculating cost of capital

Evaluation of the opportunities and the investments through the strategic investment helps in the better understanding of the factors that marks the rise in the opportunities of the organisation. The information gathered from the strategic proposals helps in understanding the manner the user wishes to continue its investments Maziotis et al. (2016, p.29). The prime merits in the approach is that it consist of well planned risk and opportunities. On the other hand it assigns, values to the operation of the organisation, not required much.

6.3 Evaluating opportunities of strategic investment as well as financially appraising strategic proposals

6.3.1 Suitability of strategic investments in terms of strategic fits and exploitation of core competencies

Strategic investment in terms of strategic fits helps in the better finding of the core competencies an organisation possess. As supported by Zineldin and Vasicheva (2016, p.32), the better understanding of the values and the core competencies in the organisation provides better opportunities in the supporting of the decision made on the investments.

6.3.2 Acceptability and feasibility of strategic investment against proposals criteria, stakeholders expectations and strategic capability

Strategic investment helps in the better understanding of the situation that marks the operation of the organisation. It Is evident that the rise in the strategic investment helps in the better meeting of the stakeholders criteria but may not define the capability of the organization in meeting the needs.

6.3.3 Qualitative and quantitative issues of strategic proposals

Strategic proposals helps in the better understanding of the situation on a basis required for the ultimate growth of the organization, which is supported by numeric values, thus known as the quantitative issue. On the other hand the support of the organization is better understood as the thematic scene which marks the situation as the general one and helps in the dealing with the general assumption

LO7

7.1 Identifying financial risks to operate in any international market

7.1.1 Role and importance of international financial markets

The importance of the international finance is mainly circles round the major issues of the organisation that deals with the understanding of the operation of the organisation in terms of the values and progress that really gains the success of the organisation.

7.1.2 Financial risk in the operation in international markets

Financial risk in the organisation is mainly due to the changes in the policies of the organization. The availability of the organizational finance and the proper management of the organization deals with the better support of the financial approach. The changes in the international policy on monetary fund is the prime problems that may be faced by the organization

7.1.3 Approaches for the managing economic, translation and transaction risk in international operations

Operating exposure and the Transaction exposure the two objectives that lead to the operation of the organisation in understanding the situation of the organisation and the opportunities the organisation has after availing all the security measure in the organisation. The information availed in the organisation is better understood by the proper evaluation of the international exposure.

7.2 Appraising decisions of international investment 

7.2.1 Risk and complexities of capital budgeting in International context

As inferred by Durand et al, (2017, p.5), the risk that the capital budgeting implies on the chance that the approach lays on. The approach may get into the work of the manager and may lead to the altering of the views and the ideas of the organisation. The volatile nature of the organisation could also lead to the change in the production line of the organisation.

7.2.2 Calculation of forward rate and evaluation of a foreign capital project

The evaluation of the foreign capital project is better understood by the setting of the standard in knowing the purpose behind the project, the quality of the work to be provided by the project, time scale required for the project and the budget required for the better evaluation of the work.

7.2.3 Indirect and non quantifiable benefits and cost of international investment decision

Quantifiable benefits like the getting better grip over the situation by the use of the investment decision making is one of the prime objective of the organisation. The non quantifiable benefits are the availing of the opportunities for the better understanding of the operation of the organisation (Mechler, 2016. p.2140)

7.3 Evaluating options of financing for overseas subsidiaries and multinationals

7.3.1 Evaluation of internal and external source of finance for multinationals 

International source of financing are the source of finance that marks the use of the assets in the organisation as for the source of finance like the sale of assets and using of the capital reserve. The external sources of finance are the issues of the shares and leasing of the assets already in lease.

7.3.2 Role of Eurocurrency in international finance

The euro plays an important role in the world as the denomination instrument of euro remained unchanged at a value of 26%. IN 2010 the value did mark the operation of the organisation in international basis. The gradual fall and slight rise in the value of euro have marked changes in the organisation.

LO8

8.1 Identifying sources and types of risk in organisations

8.1.1 Types and sources of risk in organisations

As inferred by Hardy and Maguire (2016, p.82), the market risk along with the interest rate risk are the common risk associated with the source of risk the organisation generally faces. The interest risk deals with the security and the bond the organisation dealt with and the market risk deals with the change and fluctuation in the organisation.

8.1.2 Additional risk involved in international operations

On dealing with the international operations there are rridsk in relation to the political sector, social sector and most importantly the economic sector of the organisation. The foreign exchange also plays an important role in the operation of the organization overseas.

8.1.3 Methods to deal with risk specific to overseas operation

As mentioned by Liu et al. (2016, p.367), the overseas operation consist of risk that needs to be sorted in proper manner that require proper attention and care. To deal with specific risk in an organisation dealing with the expenses in the overseas, the managers needs to be evaluative in the bottom up top down evaluation, requiring proper and effective survey of the problem.

8.2 Using appropriate techniques to evaluate and manage risks

Root cause analysis helps in the determination of the problems that make the prime issuance in the risk that act as the centre of all problems in the organization. The centre problems marks the better manner to make the difference in the organization.

8.2.1 Risk maps and surveys

As mentioned by Xu et al. (2016, p.S97), the smooth operation of the organisation depends upon the better mapping and planning of the situation which marks the mitigation of the  problems in the organisation. The availability of the surveys in the organisation helps in the proper availing of the situation that marks the opportunity which help in the better management of the risk.

8.2.2 Contingency plans for dealing with potential risk

Risk forecasting and preparation of the composite risk index are the aspect which cannot be avoided in the organisational operation. It is evident that the rise in the organisation can be verified with the greater support of the organisational manager for the dealing of the risk that may cause problem from the centre of the operation. The contingency plan helps in the better management of the organisational problem.

8.2.3 Assessing techniques to manage risk through avoidance, reduction transference and retention

Avoidance is one the technique that helps in the better managing of the work of the organisation which keeps the work in the organisation avoiding slightest mistake in the organisation. It is evident from the organisation that intuition and conscience of the organizational managers. The reduction comes in the end of the organisational management that helps in the reduction of the organisation risk.

8.3 Preparing and utilising reports of risk management 

8.3.1 Need and value of formal risk management

Risk management is important in operation of an organization, as it supports the organization with helpline at the time of crisis and other unfavourable situation. Marks and Spencers value risk management as it act as saviour of the company at the time of need.

8.3.2 Identification of impact of risk in report linked to sensitivity 

The identification of risk and the management of the ri in terms of operation of an organization deals prime importance as the organisation is sensitive towards the rise in the risk in the organization. Slightest risk in an organisation demands require proper risk management plan for better result in the success of the organisation.

8.3.3 Content of risk management and way risk is to be managed 

Risk can be managed by simple means of accepting the current situation. As supported by Hardy and Maguire (2016, p.107), the risk can also be managed by simpling avoiding the risk by not going for the act or work which may get into trouble. Another manner by which risk can be managed is transferring of risk. The risk can be transferred by the help of the insurance agencies and other insurance covering agents.

Conclusion

From the above report it can be evidently assumed that the success of the organisation is better developed through the management of the financial book of accounts and the assumption for the better opportunity in future. The success of the organisation is best understood with the helps of the success of the analysing the option an organisation have in making proper opportunity out of the required options.

References 

  • Durand, R., Grant, R.M. and Madsen, T.L., (2017). The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), pp.4-16
  • Hardy, C. and Maguire, S., (2016). Organizing risk: discourse, power, and “riskification”. Academy of Management Review, 41(1), pp.80-108
  • Liu, X., Gao, L., Lu, J. and Lioliou, E., (2016). Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy. Journal of World Business, 51(3), pp.356-368
  • Maziotis, A., Saal, D.S., Thanassoulis, E. and Molinos-Senante, M., (2016). Price-cap regulation in the English and Welsh water industry: A proposal for measuring productivity performance. Utilities Policy, 41, pp.22-30
  • Mechler, R., (2016). Reviewing estimates of the economic efficiency of disaster risk management: opportunities and limitations of using risk-based

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