Project Proposal on Managing Finance

Question: The purpose of the Final Project is to apply the concepts and techniques of the module to the analysis of real-world situations or problems. You are expected to use diverse sources of information and to carry out an original analysis rather than summarise or rehash existing work. You are also encouraged to use situations and data from their own experience where possible. Project Proposal that includes the nature of the project, the sources of information you plan to use, and the most important concepts and techniques to be applied. For this module, you are required to complete a course project that reveals mastery in application of the management accounting and finance concepts emphasised in the course. This involves reporting on a specific organisation within an industry and the management accounting and finance practices that affect the value of the chosen firm or industry. This project should be a formal business report that provides both specific processes and strategies involvin g budgeting, costing, capital decision making, capital acquisition, and cost of capital structure of the chosen firm. These processes and strategies are to be supported with management accounting concepts. For this project, you may select a company that you are familiar with or work for. Tasks: Assess the budgeting process and procedures for the organisation with regards to preparation techniques, uses for evaluation, differences between business units/divisions, etc. Analyse how the organisation collects, stores, and prepares management accounting information, particularly the use of a management accounting system (MAS) and how information is disseminated throughout the organisation. Evaluate the costing process and procedures of the organisation with respect to method or approach utilised. Assess the capital decision making process within the organisation with regards to what methods are utilised, how such methods are chosen, how projects are selected and managed, and what measures are employed to evaluate performance. Evaluate the criteria or mechanisms used by the organisation for deciding how best to acquire capital and analyse the capital structure of the company. Answers: Nature of the Project The major aim of this project is to undertake research as well as analyze the financial information of an organization which will be carried out through the application of theoretical concepts and techniques. This paper will focus on the analyzing the budgeting procedure of an organization. Basically, it will emphasize on assessing the formulation of budgets for various units and different budgets(Drury, 2004). Budgeting is one the most important financial management activity of a business firm and it needs to be carried out efficiently. Therefore, the next task is to study the management information system for the same organization. It will help in obtaining an insight regarding the collection, preserving and preparation of the relevant management accounting information of the organization. Various costing procedures can be utilized for undertaking the costing activities(Freedman and Jaggi, 2000). This paper will study the costing procedure and technique adopted by the organization and its implication for the company. Capital decision making is associated with the selection of sources for financing the organizational activities. In this paper the capital decision will be analyzed to find whether it is appropriate or not. Additionally, this project will focus on the evaluation of mechanism which will be utilized by the company for ensuring appropriate capital structure (Epstein and Lee, 2011). Sources of Information In order to undertake this study, two types of information will be collected. First of all, secondary data will be collected which will help in understanding the background of the study. Secondary data will include the relevant theories, conceptual frameworks and inferences of the past research studies. Secondary information will collected from wide range of books, peer reviewed journal articles, research papers and trusted websites (Kumar, 2005). Additionally, primary data will be required for analyzing the budgeting and costing procedure along with the capital structure of a particular company. Hence, primary data will be collected by conducting interview with the senior finance managers of the chosen company (Gillham, 2000). Most Important Concepts This section will focus on providing a brief overview of the most relevant as well as important concepts that needs to be used in this paper. Budgeting and Its Importance: Budget can be described as the quantitative estimation of the future organizational activities. It is basically a forecasting technique that is used by strategic managers for controlling organizational activities towards desired direction (Epstein and Lee, 2011). The major purposes of budget includes controlling organizational resources efficiently, communicating the plans and goals with the concerned people, motivating the executives and managers, evaluating performance of the manager providing visibility to the performance of the company. Budgeting is an important tool for anticipating the future revenue and expenses of the company (Freedman and Jaggi, 2000). Costing Techniques Costing refers to the activity that is associated with the computation of cost of various business activities through allocation of resources in different phases. It is one of the most important activities as it significantly contributes in various decisions making of the company. There are various costing techniques such as process costing, activity based costing, standard costing etc (Jagolinzer, 2000). The company needs to choose the appropriate costing technique for meeting the organizational objectives. Additionally costing is directly related with the pricing decision of a product. Hence, each organization needs to adopt an appropriate costing technique (Hansen and Mowen, 2000). Capital Structure Capital structure refers to the proportion of resources that is used by an organization for undertaking various activities. There are various sources of funds which are available to an organization for financing the operations. Internal sources of fund refer to the retained earnings, personal savings of the owner of the firms etc (Jagolinzer, 2000). Additionally, the external sources of fund refer to the loans, debentures, overdraft, preference shares, ordinary shares etc. The company needs to select suitable sources of funds in an appropriate ratio for ensuring achievement of the organizational goals (Hirsch, 2000). Techniques Specific research techniques need to be followed in this paper for meeting the objectives of the study. First of all, inductive research approach must be adopted for this study (Kothari, 2004). The research design focuses on providing an efficient pathway for interpreting the collected data to reach conclusion and recommend. This study has adopted exploratory design for analyzing the gathered data through efficient techniques. The gathered data will be analyzed with the aid of qualitative as well as quantitative techniques (Johnson, Onwuegbuzie and Turner, 2007). This study will be completed within the 7 weeks. The time frame for indicating the expected time for undertaking each activity has been presented below (Ketchen and Bergh, 2004): Principal Activities Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Research topic selection scope analysis Identification of the sources for secondary data Literature Review Description of Research Methodology Preparation of survey questions Collection of primary data Data analysis Comparison of findings Conclusion and recommendation Final submission References Drury, C. (2004).Management and cost accounting. London: Thomson Learning. Epstein, M. and Lee, J. (2011).Advances in management accounting. Bingley, UK: Emerald. Freedman, M. and Jaggi, B. (2000).Advances in environmental accounting management. Amsterdam: JAI. Gillham, B. (2000).The research interview. London: Continuum. Hansen, D. and Mowen, M. (2000).Management accounting. Cincinnati: South-Western College Pub. Hirsch, M. (2000).Advanced management accounting. London: Thomson Learning. Jagolinzer, P. (2000).Cost accounting. Australia: South-Western College Pub. Johnson, R., Onwuegbuzie, A. and Turner, L. (2007). Toward a Definition of Mixed Methods Research.Journal of Mixed Methods Research, 1(2), pp.112-133. Ketchen, D. and Bergh, D. (2004).Research methodology in strategy and management. Amsterdam: Elsevier. Kothari, C. (2004).Research methodology. New Delhi: New Age International (P) Ltd. Kumar, R. (2005).Research methodology. London: SAGE. Newman, I. and Benz, C. (1998).Qualitative-quantitative research methodology. Carbondale, Ill.: Southern Illinois University Press. Riahi-Belkaoui, A. (2001).Advanced management accounting. Westport, Conn.: Quorum Books. Toms, J. (2000).Environmental management, environmental accounting and financial performance. London: CIMA.