Financial Analysis

Topics: Management accounting, Management, Cost accounting Pages: 6 (1802 words) Published: February 14, 2013


Unit Code: AAF001-6


Student Names and Numbers: 1124697


To: Rob Carman

Date: 18/01/201

This report present about the method and techniques that we will use to support for company to make a right decisions in increasing profit. In this case, we introduce about VTH –Telecommunication Company or manufacturing company and problems of this company as well as application management accounting to assist management of this company VTH is a new business and has had development for 4 years recently in Vietnam. It is a private enterprise specializing in sell electronics telecommunications. Business items include: telephone, PBX, and most recently the company expanded new product that is camera. Company has obtained certain market share in the telecommunication market. They specialize in providing and installing telephone lines and set a PABX for businesses, banks, hotels. They earned large amount of contracts in last year. Business is planning to increase production volume instead of buying items from other supplier. Especially for new item: camera, they have to import components from foreign with high cost are not necessarily the best quality and it is difficult to verify. Currently they only have factory used to put together the details of the small-scale operator with about 30 employees. Upcoming target of business is wanted to increase profits over the previous years, to minimize cost of. They are considering and analyzing the situation should or should not continue to buy the camera from foreign suppliers or buy components to assemble or they can choose a provider in their home country with cheaper price. Another option could be the domestic component production. The cost to import the camera is high so prices for sale will also be higher due to import tax and other expenses to pay. Another problem that companies face is that they have to spend for the payments for payment for labor, buildings, utilities; high costs also reduced profit high cost of making profits also declined. Company will have to find management accounting method to gain more profit and also decide they should or should not import item from other countries and consider planning for manufacturing components in home country.

Management accounting is an integral part of information systems administrator. Managers based on management accounting information to operate and control the activities of the organization (Ronald W.Hilton, 1991)

Management accounting provide internal information to help managers have an overview about the financial situation and gives all the economic information has been processed and measured in order to provide leader of business for operations. Otherwise accounting management help the board director of business to consider and decide on one of the projects with the highest economic efficiency; company should or should not produce this product, how do manufacture products to save cost, which price strategy will be used for each product, how to effectively use resources and develop manufacturing capabilities. The short-term decisions: The decision to help businesses solve economic problems in the short term. Management accounting help manager can assess ability to make profit from available resources as well as efficiency in business activities. Management accounting system can provide information for leaders to give decision making in the following areas: • Plan for manufacturing and product categories.

• Pricing for the product.
• Selecting the plan to consuming and distribution products. • Choose between self-produced and purchased options.
• Evaluate the benefits of the decision to maintain or suspend a department or a business activity which have loss • The selection of investment, analyzing...
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