management accounting ASSIGNMENT 1

ASSIGNMENT FRONT SHEET Qualification BTEC Level HND Diploma in Business Unit number and title Unit 5: Management Accounting (489) Submission date Date received (1st submission) Re-submission date Date received (2nd submission) Student name Student ID Class Assessor name Student declaration I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism I understand that making a false declaration is a form of malpractice Student’s signature: Grading grid P1 P2 P5 M1 rSummative Feedbacks: rResubmission Feedbacks: M4 D1 D3 Grade: Assessor Signature: Internal Verifier’s Comments: Signature & Date: Assignment Brief (RQF) Higher National Certificate/Diploma in Business Student Name/ID Number: Unit Number and Title: Unit 5: Management accounting Academic Year: 2019 Unit Assessor: Date: Assignment Title: ASSIGNMENT Issue Date: Submission Date: Internal Verifier Name: Date: Submission Format: Format: This assignment is an Individual report and specifically You must use font Calibri size 12, set number of the pages and use multiple line spacing at 1.5 Margins must be: left: 1.25 cm; right: cm; top: cm and bottom: cm You should use in text references and a list of all cited sources at the end of the essay by applying Harvard referencing style The recommended word limit is 1500-2000 words (+/-10%), excluding the tables, graphs, diagrams, appendixes and references You will not be penalized for exceeding the total word limit The cover page of the report has to be the Assignment front sheet (to be attached with this assignment brief) Submission Students are compulsory to submit the assignment in due date (slot 38) and in a way requested by the Tutor The form of submission will be a soft copy posted on http://cms.greenwich.edu.vn/ Remember to convert the word file into PDF file before the submission on CMS Note: The individual Assignment must be your own work, and not copied by or from another student If you use ideas, quotes or data (such as diagrams) from books, journals or other sources, you must reference your sources, using the Harvard style Make sure that you understand and follow the guidelines to avoid plagiarism Failure to comply this requirement will result in a failed assignment Unit Learning Outcomes: LO1 Demonstrate an understanding of management accounting system LO4 Compare ways in which organizations could use management accounting to respond to financial problems Assignment Brief and Guidance: *This assignment guidance is for reference only and can be customized by the tutor to meet specific needs In this scenario, you are a member of the Financial Governance committee of [ an organization of your choice.] Your committee has to prepare an annual report for the shareholders’ meeting and you are in charge of writing this time Currently, the shareholders take a special interest in expanding the operation, improving efficiency and ethical financial governance US/UK based corporations are highly recommended for this assignment due to the availability of the information In the beginning you should write a short introduction for the corporation, summarizing the most recent financial performance of the company To address the shareholder’s concerns, you need to the following: Describe to the shareholders the main objectives of internal accounting activities in general The report will have to clarify the responsibilities of management accountants in the specific context of your organization You will provide the company’s accounting reports as evidences for identified responsibilities Discuss the importance of ethical and responsible financial governance to business in general To further enhance the argument, you should identify real life example of company failing in the market due to poor financial governance Next, propose some recommendation to improve the company’s financial governance policy by applying planning tools Due to the recent expansion plan, the Board of directors want to hire more management accountants You will need to identify the required traits and skills of the position to the Human resource department Learning Outcomes and Assessment Criteria (Assignment 1): Learning Outcome Pass Merit LO1 Demonstrate an P1 understanding Explain M1 Distinction requirements of the D1 Critically evaluate how management benefits of accounting system and management management accounting reporting accounting system is integrated within and their application organisational process different types of within an Management organisational context of management management accounting and give accounting system the essential accounting systems P2 Explain different methods used for management accounting reporting Evaluate LO4 Compare ways in P5 Compare how which organisations organisations are M4 Analyze how, in responding could use adapting management financial management accounting D3 Evaluate to planning tools how for problems, accounting management accounting to respond systems to respond to accounting can lead organisations to financial problems to financial problems sustainable success respond appropriately to solving financial problems to lead organisations to sustainable success Introduction: In this assignment, I am going to explain management accounting in detail apply to the business environment In the first part, I am going to explain management accounting and different kinds of management accounting systems In the second part, I am going to explain different methods used for management accounting reporting In the final part, i am going to compare how organizations are adapting management accounting systems to respond to financial problems P1 Explain management accounting and give the essential requirements of different types of management accounting systems What is management accounting and application of management accounting? a Management accounting is the process of identifying, analyzing and transferring information to people within an organization (Appelbaum and Kogan, 2017) b Application of management accounting to: Know each component of the cost, calculate and synthesize production costs and costs for each type of product, each type of service Develop budget estimates for operational objectives Control the implementation and explain the reasons for the difference between cost estimates and actual costs Provide the information needed to make reasonable business decisions (Appelbaum and Kogan, 2017) Role and principles of management accounting? • • • $ 19 billion is the Pepsi brand value that is valued by Forbes 29 is the position that Pepsi holds in the Top 100 largest brands in the world (source: Forbes) $ 6.5 billion is earned by PepsiCo 2014 • $ 66.7 billion was PepsiCo's revenue in 2014 (Source: Annual Report Final 2014 PepsiCo) • $ 70.51 billion is PepsiCo's current total assets • 271,000 is the number of PepsiCo employees Coca-Cola Coca-Cola's business strategy from the very beginning was to focus on the key market (ie, occupy the largest markets), rather than spreading investment worldwide That is the strategy that Coca-Cola always bases on its development goals Coca-Cola has always been consistent with traditional markets According to the firm, it must first have a firm foothold in the vast traditional markets and then expand into smaller markets As a result, in big markets like the US, China, or Europe, the Coca-Cola logo is always solid Every year, Coca-Cola invests millions of dollars (70-80% of total investment) in the traditional market for product quality promotion, large advertising contracts, and statues, have a great impact on customers As a result, markets such as the US, Europe and Coca-Cola products always dominate, although many other soft drink brands are born, especially from rival Pepsi Coca-Cola focuses on increasing the amount of products that can be beneficial, managing rigorous costs and improving capital efficiency, considering development in the traditional market as a key factor for their future =>Faced with growing competition, the growth of competitors (especially Pepsi and domestic beverage manufacturers), this strategy focused on this traditional market of Coca-Cola works very well Related parameters of Coca-Cola: • 1.7 billion is the total number of Coca-Cola products consumed every day worldwide (source: Zing News in 2013 ) • is the position that Coca-Cola brand holds in the ranking of the world's most expensive brands (source: Forbes) • 15 is the number of brands that Coca-Cola owns in 33 well-known non-alcoholic beverage brands in the world • • $ 7.1 billion is Coca-Cola's 2014 earnings $ 45.9 billion was Coca-Cola's revenue in 2014 • $ 56 billion is the amount that Coca-Cola brand is valued (higher than the brand value of Starbucks, Pepsi and Red Bull, Heineken combined ~ $ 44 billion) ==>Comment: PepsiCo and Coca-Cola are the bosses of the world for non-alcoholic beverages, but there is a fierce competition between the two big boys In every business strategy given by one of the two firms, there is a wary, considering the other attitude And here is an overview of the company's big business strategy Coca-Cola has a macro business strategy, while PepsiCo is more micro This is both the right strategy of the two companies because Coca-Cola was born first, the image is always promoted in a wide area (98% of people around the world know Coca-Cola) But PepsiCo was born later, with the same type of carbonated soft drink aimed at the same target customers, PepsiCo had a smart way of having a multinational strategy, with each country will have different strategies separate comb This helped PepsiCo beat Coca-Cola in small markets where Coca-Cola had not yet set foot Although the two strategies are very correct and suitable for two firms, the success of the two firms is different Based on the numbers, Coca-Cola sales always outperformed Pepsi, although only in 1979 for the first time in history, PepsiCo sales surpassed Coca-Cola But this quickly ended Wise with the strategy of hitting the opponent's reputation Pepsi vs Coca-Cola In the marketplace, large competitors often have a system of partners such as suppliers, distributors, manufacturers of attached products, etc and this is also the source to create their strength By creating conflicts between rivals and their partners, Pepsi has created leverage to develop and enhance its brand reputation A classic example is Pepsi's success with Coca-Cola at the time of the market in the 1980s Coca-Cola was very strong at that time and had many partners doing bottling for the company Pepsi introduced a larger bottle to Coca-Cola's product and quickly increased its market share However, Coca could not follow because Coca's bottling partners have invested heavily in small bottling equipment and finding new bottlers will offend existing bottlers The most dramatic competition occurred in 1985 At that time, on the 100th anniversary of its birth, Coca-Cola suddenly announced a change to the formula that has been used for over 90 years New preparation formulas have just been successfully researched This new formula has cost tens of millions of dollars for experimental research Any doubt, this product has just launched into the market has led to "storm three storms", consumers are constantly protesting this change and thus, the image of Coca-Cola has been seriously reduced Not missing the rare opportunity, Pepsi spent a large amount of money as a television advertising script and broadcast for a month The content of the ad is quite special: A girl with urgent eyes looking straight into the camera said, "Who can tell me why a big soda company does that?" Why they change the recipe? ”; then the lens suddenly changed, still the girl said "Because they changed so I started drinking Pepsi"; then she took a big swallow of Pepsi and exclaimed aloud: Now I know " With this ad, Pepsi gradually surpassed Coca-Cola and asserted its brand In the context of increasingly fierce competition in the market, to have a successful marketing strategy - the regular organization of brand development programs, advertising on the mass media, promotions for For customers is a good promotional tool that businesses should take advantage And now, Pepsi with effective development strategies is looking forward to a beautiful future full of blue Brand value Pepsi vs Coca-Cola Coca-Cola - Meet the new feeling for customers This is the goal of every Coca-Cola product, bringing great moments every day, optimism and composure Coca-Cola helps you enjoy and discover feelings of encouragement, confidence and positive, helping you experience moments of comfort and forming good relationships with people Pepsi - A new life in a can of water Pepsi expresses everything from carbonated soft drinks, from flavors, choices to feeling refreshed and youthful fun All of that comes from Pepsi ads The core benefit of customers when buying Coca-Cola vs Peppsi products Coca-Cola operates in the field of beverages including soft drinks, non-alcoholic drinks and carbonated drinks The company has created a variety of drinks with different flavors and designs to meet the diverse needs of customers such as low-carbon Coke, Sprite, Fanta, Vanilla flavored Coke, juice Coke, etc Recently, the Company has continuously researched and developed many new products to serve consumers such as Joy bottled water, Samurai energy drink, Sunfill fruit powder, and added many new flavors for the customers Traditional products to meet the tastes and tastes of customers such as lemon Fanta, Strawberry Fanta, … Pepsi products developed in the context of industrial society people eat fat meat and fast food very much, so Pepsi is very suitable Convenient product, turn on the lid to enjoy immediately, have a good refreshment, help digestion, fight hunger, combat the feeling of fat meat in the mouth but not as addictive as alcohol The key success platform of Pepsi is its long-term commitment to guaranteeing the interests of its customers All PepsiCo's Pepsi-Cola products are guaranteed quality and safety for consumers Pepsi Market Segment and Target Market with Coca-Cola Coca-Cola Market segments and Target markets Market segmentation Market segmentation by main criteria: Geography: Coca-Cola distributes a wide network of continents around the world with major regions: the Americas, Europe, AsiaPacific, Africa and mainland Asia Europe About demographic characteristics: Coca-Cola focuses on young people, with a hot, dynamic and passionate style Target market Coca-Cola's strategy is to serve the entire market Initially, the company focused on segments of the market where demand and characteristics of population density were high Brand Positioning Coca-Cola has always held the top position in the ranking of the world's leading brands with a value of $ 56 billion, Coca-Cola is a global brand, known by 98% of the world's population Is a refreshing product that makes people alert and strong, bringing great refreshment Coca-Cola upholds the symbol of trustworthiness and originality The company strives to refresh the market, enrich the workplace, protect the environment and strengthen public communications; The company's philanthropic efforts are focused on educating and building youth dreams Motto: "Our customers around the world are the ones who deserve the best quality beverage" Pepsi Market segments and Target markets Market segmentation Market segmentation by main criteria In terms of demographic characteristics: Pepsi products choose a segment that is a young dynamic group, this is a potential segment of the business Behavioral characteristics: The company focuses on the purchase of soft drinks daily, for parties, birthdays of customers with regular intensity and high level of loyalty Target market PepsiCo marketing policy from the 1950s is aimed at young people called "Pepsi generation" The company sacrifices all kinds of markets except the youth market And the slogan at the time was "Be sociable - drink Pepsi" It was Pepsi's first campaign focused on young people, and this made the company famous in the following decades To this day, the company maintains its target market with a young and dynamic customer base regardless of its business in any area Brand Positioning Maintain the image of a "global comprehensive beverage company", showing everything from carbonated soft drinks, from flavors, choices to a sense of freshness and joy youthful PepsiCo always gives its products the qualities (from taste to marketing methods) necessary to penetrate into the target market The mission of Pepsi is to be “To be the leading company in manufacturing consumer goods, focusing primarily on convenience foods and soft drinks, creating opportunities for development and bringing many economic benefits to the partners business cooperation and community activities ” Pepsi always strives to operate on the basis of honesty, fairness and integrity Pepsi always tries to become younger, more different and more suitable than the competition, maintain the "simple", "exciting" and "refreshing" CONCLUDE Despite many efforts, Pepsi is still ranked behind Coca-Cola in the global beverage market In the global market, Coca-Cola has the upper hand compared to Pepsi thanks to their marketing and advertising strategy Particularly in Vietnam market, Pepsi not only has a good distribution network across the country but also has good managers and executives, not only knowledgeable about "marketing technology" but at the same time they are also very understand the psychology of Vietnamese people As a result, Pepsi has always repelled any counter-market strategy of Coca-Cola Since I realized that Coca-Cola wanted to win Pepsi in Vietnam, my company had to set up a distribution network like Pepsi (this is difficult, because Pepsi is based on available agents, they just "dump") product down with the policy of "good customer care", not spending money on equipment investment.) In addition, Coca-Cola must have business leaders knowledgeable Vietnamese psychology to plan a battle long-term confrontation, more correct Perhaps grasping these things, in the last years, Coca-Cola has made a remarkable change and progress in the forms of advertising in Vietnam Vietnamese cultural identity is printed on products such as swallow wings, yellow apricot when Tet comes spring, the slogan "Togetherness, New Year coming back" The most innovative advertising campaigns that can be mentioned are: • • "Give Coca-Cola - connect with friends": print customer name on the cans of the company "Giving Coca-Cola - Giving Emotions": with the appearance of a collection of 41 emoticons printed on plastic cans and bottles This collection provides young people with a means of expressing their personality full of vividness In particular, Vietnam is the first market to deploy this campaign, ahead of more than 200 countries globally Up to now, the unique billboard has attracted nearly 40,000 people every day These signals may indicate that Coca-Cola has captured the tastes of the Vietnamese, and is approaching the first position in the beverage market in Vietnam And who knows, someday the Vietnamese people will witness the spectacular "overthrow" of CocaCola in the competition for market share with Pepsi in Vietnam ==> Variances and problems in my Coca-Cola company I think Strategic management is a big issue to the Coca-Cola Company because due to its nature as an international company Therefore, as a result, the management plans formulated by the executive officials have to meet the requirements of a large population internationally The process of developing international strategic management is a hard task thus, the senior manager has a great responsibility in achieving the set objectives Strategic management in Coca-Cola Company is a big problem especially when it comes to setting goals, towards enabling the company to articulate its vision, identify its targeted needs and both the short-term and long-term objectives This is hard because it is deals with a large number of companies in different countries hence mandating a focused and skillful management in order to achieve such diverse goals Management accounting skill sets: The characteristics of an effective management accountant are • • • • • Good oral and written communication skills The ability to work as part of a team Excellent analytical and numerical abilities Sound business knowledge Accuracy and an eye for detail These skills be used to prevent and/or deal with problems because : Management accounting skills are commonly appreciated for their help in the future planning of a business The detailed reports produced as a result not only help managers in setting objectives and planning for their achievement but also enables them to have a better sense of control over the progress and success of an organization However, very few people understand the important role that management accounting skills can play in the innumerable business decisions made on a daily basis Whether you are required to assess the need for an additional product line, consider the discontinuation of operations, determine the optimum advertising efforts depending upon the profitability of customers, or conduct a make or buy analysis, management accounting skills are the ultimate source of sufficient data-driven input to all such critical decisions Financial governance: Definitions of financial governance : Financial governance in economics is the planning, organization, direction and control of financial activities such as procurement, use of financial funds of enterprises necessary activities Corporate finance governance has long been associated with accounting and finance It is shown in the management of financial statements The financial governance in an enterprise needs to apply general management principles to its financial resources Corporate finance governance is one of the important jobs of a business manager because good financial governance will not only help businesses maximize profits but also take businesses beyond their growth This can be used to pre-empt or prevent financial problems because : The broader financial governance is to control the cash flow in and out of businesses and the allocation of financial resources accordingly Every business has different goals in each development period From the perspective of economists today, people often set two basic goals • • Maximize the profit after tax target: Is the after-tax profit an important indicator to assess whether the company's business operations are profitable? However, if only the goal of maximizing profit after tax is not necessarily assessing the value of business shareholders, this indicator does not say what the business has to spend to get maximum profits In the case of an enterprise issuing shares to increase capital and then use the money raised to invest in bonds to earn profits, profits will increase, but profit on equity decreases because of the number of shares rising release Therefore, it is necessary to supplement the target of maximizing profit on equity Maximize profit on equity: This goal can supplement the upper limit of the goal of maximizing profit after tax However, there are certain limitations such as not taking into account monetary price factors and risk factors Therefore, the goal of maximizing the market value of a stock is considered to be the most appropriate target of corporate financial management because it pays attention to many factors such as time length, risk, dividend policy and Other factors affecting stock prices Using financial governance to monitor strategy To become a good manager, you first need to master the following basic financial management knowledge to avoid wasting human resources and make the wrong decisions that affect the efficiency of the company or even at a loss • • • • Financial control issues include cash inflows and outflows, revenues, profits and expenses Understand the financial statements of the company Know your financial planning and budgeting for implementation plans Know the financial analysis of business estimates as well as the financial impact on investment efficiency The importance of ethical and responsible financial governance to business in general Financial governance is one of the most important responsibilities of business owners and managers They will have to anticipate and consider the impact of their decisions on the company's profits, cash flow and financial position All the different business activities can have an impact on financial health and must be evaluated and controlled by management Finance is the lifeline of the business so it should receive proper attention Every business must maintain financial resources to be able to operate smoothly and achieve its business goals Business goals can only be achieved with the help of effective financial management We cannot deny the importance of corporate governance under any circumstances For example : Coca-cola - one of the largest and largest beverage production empires in the world, established a branch in Vietnam since 1994 Coca-Cola Beverage Vietnam Co., Ltd plays the role of operating activities , including the production and distribution of these branded product lines in the market Positioning in the category of non-alcoholic beverages, Coca-Cola Vietnam introduces many products to many segments, ranging from carbonated beverages such as Coca-cola, Sprite, Fanta, to energy drinks Samurai, Aquarius sports water and water around Dasani The revenue of Coca-Cola Vietnam, therefore, reaches the number of trillions of dong every year, even though the price of each product is only a few thousand dong However, until 2015 - after 20 years of presence, Coca-Cola first reported interest and paid corporate income tax In 2015 and 2016, revenue of Coca-Cola Vietnam reached nearly VND 7,000 billion, with an after-tax profit of about VND 500 billion per year These two years, each year Coca-Cola Vietnam pays an enterprise income tax of more than VND 120 billion Compared to Tan Hiep Phat, the gross profit margin of Coca-Cola Vietnam is equivalent to nearly 40% However, selling expense on this unit's revenue was 10% higher, on average, for every 10 dong of revenue, Coca-Cola spent 2.3 dong of selling expense and only about dong for raw cost Profited in 2015, 2016 but due to continuous losses many years ago, accumulated to the end of 2016, Coca-Cola still lost nearly VND 2,700 billion Previously, accumulated losses of Coca-Cola Vietnam at the end of 2014 amounted to nearly VND 4,000 billion Since starting operations in Vietnam in 1992, this company has continuously reported losses until the end of 2012 The loss of CocaCola Vietnam is not due to weak sales growth, the actual output of the company still growing over 25% per year By December 2012, the total accumulated losses of Coca-Cola Vietnam amounted to VND 3,768 billion, exceeding the initial investment of VND 2,950 billion ==>Reason to explain why due to continuous losses end of 2014 amounted to nearly VND 4,000 billion beacause : not have good managers and executives, not knowledgeable about "marketing technology" but at the same time they not understand the psychology of Vietnamese people, have not established a distribution network and have not had good financial governance to plan a long-term, more accurate confrontation strategy Effective strategies and systems: For management accounting to be effectively applied in Vietnamese enterprises in the new context, some issues need to be noted: At the macro management level, it is necessary to have the macro intervention of the State and specialized training management agencies, in order to stipulate and guide the model of applying accounting management, so that enterprises can see Importance and efficiency brought about when applying management accounting For businesses and managers, it is important to be aware of the importance of using accounting information and build a transparent information system within the enterprise At the same time, it is necessary to step up the improvement and rearrangement of the accounting apparatus to suit the development requirements of the market economy; comply with and ensure a clear accounting regime, adhere to international standards; keep all necessary data and books to avoid possible risks; enhance learning experience in applying management accounting of economic groups in the world on the reporting model, target system, and then apply it in accordance with the reality of Vietnam The management accounting system does not have any general legal regulations on the form and content of the report, therefore, enterprises must build a specific system of management accounting criteria according to the set management goals out These criteria must ensure comparability between periods to provide accurate assessments of the actual operation situation of the enterprise Along with that, businesses need to build a uniform production process, set up a quality management system for products and services This not only helps businesses standardize their operations but also serves as a basis for providing accurate data sources for management accounting in the reporting process It is the consistency of the nature of the data that will help to compare indicators more effectively References: Appelbaum, D.& Kogan, A (2017) Impact of business analytics and enterprise systems on managerial accounting International Journal of Accounting Information Systems, 25, 29-44 Edmonds, T & Olds, P (2013) Fundamental Managerial accounting Concepts (7th Edn.) Maidenhead: McGraw Business dictionary (2018) Economic information Retrieved from: businessdipedia.com Investment (2018) Financial report Retrieved from: Investopedia.com Steven Bragg (2018) Qualitative characteristics of financial statements Accounting tools Retrieved from: notifytools.com Atrill, P., & McLaney, E (2009) Management Accounting for Decision Makers (6th ed.) Essex, Pearson Education Ltd Atrill, P and McLaney, E (2010), Accounting & Finance for Non-Specialists, Financial Times Prentice Hall, Harlow Bhimani, A., Horngren, C.T., Datar, S.M (2013), Management and Cost Accounting Financial Times Prentice Hall, Harlow Doan Xuan Tien (2009), Curriculum on Accounting for Corporate Governance, Finance Publishing House; Ngo The Chi, Truong Thi Thuy (2013), Textbook of Financial Accounting, Finance Publishing House; Nguyen Ngoc Quang (2010), Curriculum on Accounting for Business Administration, Publisher of National Economics University; ... Pass Merit LO1 Demonstrate an P1 understanding Explain M1 Distinction requirements of the D1 Critically evaluate how management benefits of accounting system and management management accounting. .. could use adapting management financial management accounting D3 Evaluate to planning tools how for problems, accounting management accounting to respond systems to respond to accounting can lead... are adapting management accounting systems to respond to financial problems P1 Explain management accounting and give the essential requirements of different types of management accounting systems