Debate On Health Warnings On Cigarette Packs And The Role Of Accountants In Business Growth: An Essay.

Major stakeholders in the health warnings on cigarette packs debate

1. a) By considering the facts that are given in the case, the major stakeholders in the debate on the health warnings on cigarettes packs are shareholders, customers, government, and community in which it operates its business. In the conversation, marketing manager (Mary Bender) and public relations manager (Randall Hedges) of the company are making important discussion about the health notices that are given on cigarette packs. Both of them are presenting their views and opinions about the health warnings on cigarette packs. In the perspectives of Mary Bender, benefit is the real objective of the organization and health notices on packs may diminish the piece of the pie and benefits of the organization. Mary says that they should think in regards to their shareholders. The primary thought process of Mary is to gain more benefits and furthermore give significant yields to the shareholders of the organization. Mary is against the health notices on cigarette packs. Mary only wants to raise the profits of the company (Strasser, Tang, Romer, Jepson and Cappella, 2012).

In addition to this, Randall Hedges (public relations manager) is in the support of the health notices on cigarette packs. Randall says that, as per the Australian law, they have to specify general health notices on cigarettes packs. In addition, they need to satisfy their corporate social duties towards the society in which it operate its business. The organization has a few obligations towards group in which it exists. Accordingly, on the off chance that they will show health notices on cigarette packs; then they would have the capacity to work with their corporate obligations (Australian Government. 2016). Moreover, the health notices on cigarettes packs will demonstrate some worry towards its clients. Randall Hedges is completely cognizant about the administration, group and clients related to organization. Thusly, one might say that,   shareholders, government, community and clients are the key partners in the level headed discussion on the health notices on cigarette packs.

b) There are some major ethical issues that are included in the argument on health alerts on cigarettes packs. The primary moral issue is that smoking is exceptionally risky to strength of individuals. Adjacent to the reality, Mary Bender wants to trade cigarette packs with no health notices on the packs. As per the Australian law, health notices on packs are fundamental to make mindful to individuals (Morrison, 2015). On the off chance they don't put these sorts of notices then it might make moral issues for the organization. Furthermore, the second major moral issue required in the discussion is that Mary Bender is just considering the benefit of the organization. An organization ought to consider its solid client relationship rather than benefits. The organization ought to offer more beneficial items to its clients. However, BBT is a tobacco organization and can't offer solid items to the clients. In this circumstance, it is completely obliged to put health notices on the packs. Moreover, the third significant issue is identified with the corporate social responsibilities of the organization. For case, on the off chance that they don't show health notices on packs then they would not be able to satisfy their corporate social duties towards the group. These things demonstrate that organization does not think about its group and does not have any worry towards its clients (Thomas and Gostin, 2013). Accordingly, the above examined are the most imperative moral issues involved in argue.

Ethical issues surrounding health warnings on cigarette packs

c)  On the off chance, I were Randall Hedges then I will satisfy all the obligations that gone under the territory of my job. A public relations manager is completely obliged to have worry towards general society and group in which the organization manages its business. I will show the health alerts on cigarette packs to enhance the knowledge of individuals. Moreover, I will take after all the lawful tenets and measures to work together and enhance the clarity of the organization. I will take after all the moral rules to get away from the organization from the circumstance of moral quandary. Also, I will satisfy corporate social obligations of the organization. I will consider every single angle that might be perilous to the general public. I will concentrate on the client relationship instead of benefits of the organization. I will show health notices on packs to demonstrate my worry towards the clients (Franck, Filion, Kimmelman, Grad and Eisenberg, 2016). So, if I were Randall Hedges then I will satisfy all the moral and lawful obligations to build the client base of the organization. These things would be useful to enhance the notoriety of the association and to get away the organization from moral and legal issues that may create troubles in the future growth of the company.

2. Yes, it is true that, financial accounting statements are liable to reflect past events. The main purpose to disclose past events is only to make appropriate financial decisions for the growth and success of the businesses. In the same manner, financial accounting statements play a significant role to decide future actions of an organization. The future actions of an organization only depend on its past as well as current events. In other words, it can be said that, business organizations learn lots of things by their past actions. There is a strong relationship between the past events and future actions of an organization (Atrill, McLaney and Harvey, 2014). So, financial accounting statements are equally useful to reflect past events and to make future actions for the growth of the organization.

On the other hand, financial accounting statements can be considered as precious tools for decision making of business. The future business actions or decisions will automatically be influenced by what business firms have learned with their past events or actions (Stice, and Stice, 2013).  For example, an organization makes future actions about its cash flows. It will involve all the things that may influence the cash flows (cash inflows or cash outflows) of the organization in both positive and negative manner. In this situation, business organization will involve all the previous financial accounting statements and events that have influenced cash flows of the organization. By considering all these events, it will make all its possible efforts to shrink the errors that will influence cash flows of business in a negative manner. Moreover, it will adopt and implement all the factors that will improve the cash flows of business in a positive manner. So, with this example, it is clear that, financial statements not only reveal past events; but also make future actions for the financial growth of the organization (Albrecht, Stice, and Stice, 2010).

The role of financial accounting statements in business decisions

In addition to this, financial accounting statements of an organization present a clear picture of the gains, revenues, net income/ loss, expenses, etc. for a specific time period. Business organizations consider all these things before making future actions or decisions for the success of businesses. Along with this, to decide future actions, past events that have been occurred within organizations are considered by the business organizations. For example, past events related to financial accounting statements such as: historical costs, cash flows, balance sheet, and so on are important to reveal the mistakes have been done by the business organizations. Business firms further make their future decisions and actions for the development of the businesses (Atrill, McLaney and Harvey, 2014). By considering all these facts and examples, it can be said that, it is true that financial accounting statements be inclined to reflect past events. But, they also contribute in the future decision making process of the businesses. They are very in nature; but portray all the past events to decide future actions or make decisions for the growth and success of the business organizations.

3. a) Nowadays, Accountants play a major role in the growth and success of the businesses. They play a significant role to perform all the business activities and accounting functions & practices in an accurate manner. Along with this, accountants have good knowledge of all the relevant accounting theories to perform accounting and financial practices properly.  Moreover, as a new management accountant, I want to give reply to the plant manager for his/her given statement.  I will tell him/her that the criterion of my responsibilities in not limited. As a management accountant, I am competent to perform all the accounting & financial functions for the financial growth of the business. A plan manager cannot estimate the budgeted costs that are required in each phase of to a project (Cunningham, Nikolai, Bazley, Kavanagh, Slaughter and Simmons, 2014). In addition, as an accountant, I will tell to plant manager that accountants are not only to maintain records for shareholders, Australian tax office, and business organizations. They have some specific responsibilities to perform. I will show to the manager that how can an accountant make better decision for the growth and success of organization.

On the other hand, as a management accountant, I will let him/her know that, an accountant can use the available resources of the organizations in a better manner. It is because of he/she know all the actual and hidden costs that an organization have to pay just only to acquire those resources. An accountant sticks his/her nose in the day to day operations just save to time and cost of the business organizations. Moreover, I will clarify that an accountant is a valuable asset of an organization (Horngren, Datar and Foster, 2003).  Accountants have both practical and technical knowledge to perform his/her responsibilities in an effectual manner. Professional judgments provided by the professional accountants are essential to implement appropriate accounting and ethical standards within the organization. Plant manager should look the accountant as the team member. By working together, they would be able to save the time & cost and to make effective utilization of available resources of organization.

Importance of accountants in business growth

Furthermore, as an accountant manager, I will show examples to the plant manager; so he/she can understand that accountants provide help in the day-to-day operational activities of all the members of the organizations. A management accountant provides help in the preparation of budgets of the business. He/she estimates problem situations that may occur at the time of completion of a project. A management accountant analyzes all the financial and nonfinancial aspects related to businesses. An accountant provides help in the submission of capital budget needs that are required by the plant manager of the organization (Cunningham, Nikolai, Bazley, Kavanagh, Slaughter and Simmons, 2014). Thus, by demonstrating my roles and responsibilities, I will give reply to the comment to the plant manager. I will explain to the manager that accountants have many responsibilities to perform.  An accountant does not maintain records for shareholders as well as tax offices. An accountant is fully responsible to manage and control day-to-day operational activities of the business organizations.

b) Yes, I do agree with this statement. In today’s advanced technological era, the adoption and implementation of technologies have become essential for the growth of the business. Along with this, technologies make all the things easy for the business firms and employees of the organizations. The use of accounting software reduces the chances of errors and improves the overall efficiency as well as accuracy of businesses. So, the knowledge of computer technology is necessary to do thing accurately (Papulová and Mokroš, 2007). But, the other fact is that the knowledge of computer technology is essential; but not sufficient to be a successful management accountant. The main reason behind it is that the personal knowledge and skills of an accountant make his/her a professional accountant.

On the other hand, computers and technologies are developed by the human being. They are invented by people. These are machineries and cannot perform all these things effectively as human. These technologies work on instructions provided by the people. So, successful management accountants have need of business skills and technical skill to operate computer technology in a proper manner. Moreover, successful management accountants need to cross check all the functions performed by the advanced technologies and accounting software.  In view of that, it can be believed that, the knowledge of computer technology is basic but not enough to be a successful management accountant (Sangster, Leech and Grabski, 2009). To be a successful management accountant, he/she needs to have professional and technical skills that are essential to perform the duties of an accountant in an appropriate manner.

4. a) Year: 2010

(1) Current Ratio

Current Ratio = Current Assets/Current Liabilities

                                                                  = 9,900/5,300

                                                                  = 1.8679 or 1.87

(2) Quick Ratio

Quick Ratio = (Current Assets - Inventories) / Current Liabilities

                                                  = (9,900-2,800)/5,300

                                                  = 7,100/5,300

                                                  =1.3396 or 1.34

Year: 2011

(4) Total Current Assets

Current Ratio = Current Assets/Current Liabilities

                                                     1.07 = X / 15,700

                                                     X (Current Assets) = 15,700*1.07

                                                     X (Current Assets) = 16,799

                                                     Current Assets = 16,799

(3) Cash

Cash= Current Assets - Accounts Receivable – Inventory - Prepayments

                                              = 16,799 – 100-7300-2000

                                              = 7,399

Year: 2012

 (6) Total Current Assets

Let Assume Total Current Assets = X         

Quick Ratio = (Current Assets - Inventories) / Current Liabilities

                                              1.31 = (X – 8400)/11400

                                              X – 8400 = 11400*1.31

                                              X – 8400 = 14934

                                                     X = 14934 + 8400

                                                     X = 23334

                                    Current Assets = 23334         

(5) Accounts Receivable

                                    = Current Assets – Cash - Inventory - Prepayments

                                    = 23334 – 5800 – 8400 – 8500

                                    = 634

(7) Current Ratio

                                    = Current Assets/Current Liabilities

                                           = 23,334/11,400

                                           = 2.0468

                                           = 2.05

Year: 2013

 (9) Total Current Assets

Current Ratio = Current Assets/Current Liabilities

                                                       1.76 = Current Assets/16,000

                                                       Current Assets = 16,000 * 1.76

                                                       Current Assets = 28,160

(8) Prepayments

                                      = Current Assets – Cash - Accounts Receivable - Inventory

                                      = 28,160 – 4200 – 4200 – 9900

                                      = 9,860

(10) Quick Ratio

= (Current Assets - Inventories) / Current Liabilities

                                      = (28,160 – 9,900)/ 16,000

                                      = 18,260/ 16,000

                                      = 1.41

Year: 2014

(12) Total Current Assets

Current Ratio = Current Assets/Current Liabilities

1.09 = Current Assets/19,600

Current Assets = 19,600 * 1.09

Current Assets = 21,364

(11) Inventory

Inventory =   Current Assets – Cash - Accounts Receivable – Prepayments

                                           = 21,364 – 1700 – 7600 – 8100

                                             = 3964

(13) Quick Ratio

= (Current Assets - Inventories) / Current Liabilities

                                           = (21,364 – 3964)/ 19,600

                                           = 17,400/ 19,600

                                           = 0.8877

                                           = 0.89

Year: 2015

 (15) Total Current Liabilities

Quick Ratio = (Current Assets - Inventories) / Current Liabilities

0.26 = (16,500 – 8700)/ Current Liabilities

0.26 = (16,500 – 8700)/ Current Liabilities

0.26 = 7800/ Current Liabilities

Current Liabilities = 7800 0.26

                             = 30,000

(14) Account Payable

                               = Current Liabilities - Accrued Liabilities - Wages Payable

                                       = 30,000 – 4000 - 7900

                                       = 18,100

(16) Current Ratio

                                    = Current Assets/Current Liabilities

                                           = 16,500/30,000

                                           = 0.55

b) Memo

To: James Bond Ltd.

Date: May 15, 2017

RE: Concern about Ratio Analysis of Firm

This is to inform you that the financial position of the organization is the subject of concern for the growth of the organization. The five year ratio analysis of the firm is indicating towards the weak financial position of the company. The current ratio and quick ratio of the financial year 2015 is low in comparison to other years. For case, the current ratio and quick ration for the year 2015 are 0.55 and 0.26 respectively (Porter and Norton, 2014). These both ratios have changed due to continuous decreased assets as well as increased liabilities of the company.

Along with this, the management must show serious concern towards the financial position of the organization. It is because of a ratio below 1 portray that the liabilities of the organization are more than its assets. Current ratio less than 1 illustrate that the company is not in good financial position. The current ration shows that the organization may incapable to pay off its obligations. Along with this, quick ratio below 1 portrays that the company does not have enough liquid assets to pay its current liabilities properly. The quick ratio below the current ratio affirms that current assets of the organization are highly dependent on its inventory. Both, the current and quick ratio of the firm are below 1. These things show that the company may face the situation of bankruptcy or insolvency in upcoming years (Quiry, Le Fur, Salvi, Dallocchio and Vernimmen, 2011). As a result, it is suggested that, the management should make all its possible efforts to improve the financial health of the company for its continued existence in the market.

References

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Atrill, P., McLaney, E. and Harvey, D. (2014). Accounting: An Introduction, 6/E. Australia: Pearson Higher Education AU.

Australian Government. (2016). Health warnings. Available At:

https://www.health.gov.au/internet/main/publishing.nsf/content/tobacco-warn [Accessed On:  15^th May 2017]

Cunningham, B., Nikolai, L.A., Bazley, J., Kavanagh, M., Slaughter, G. and Simmons, S. (2014). Accounting: Information for Business Decisions PDF. Australia: Cengage Learning Australia.

Franck, C., Filion, K.B., Kimmelman, J., Grad, R. and Eisenberg, M.J. (2016). Ethical considerations of e-cigarette use for tobacco harm reduction. Respiratory research, 17(1), p.53.

Horngren, C.T., Datar, S.M. and Foster, G. (2003). Cost Accounting: A Managerial Emphasis. Australia:Prentice Hall.

Morrison, J. (2015). Business Ethics: New Challenges in a Globalised World. Australia: Palgrave Macmillan.

Papulová, Z. and Mokroš, M. (2007). Importance of managerial skills and knowledge in management for small entrepreneurs. E-leader, Prague, pp.1-8.

Porter, G.A. and Norton, C.L. (2014). Using Financial Accounting Information: The Alternative to Debits and Credits. USA: Cengage Learning.

Quiry, P., Le Fur, Y., Salvi, A., Dallocchio, M. and Vernimmen, P. (2011). Corporate Finance: Theory and Practice. USA: John Wiley & Sons.

Sangster, A., Leech, S.A. and Grabski, S. (2009). ERP implementations and their impact upon management accountants. JISTEM-Journal of Information Systems and Technology Management, 6(2), pp.125-142.

Stice, E.K. and Stice, J.D. (2013). Intermediate Accounting. USA: Cengage Learning.

Strasser, A.A., Tang, K.Z., Romer, D., Jepson, C. and Cappella, J.N. (2012). Graphic warning labels in cigarette advertisements: recall and viewing patterns. American journal of preventive medicine, 43(1), pp. 41-47.

Thomas, B.P. and Gostin, L.O. (2013). Tobacco endgame strategies: challenges in ethics and law. Tobacco control, 22 (suppl 1), pp. i55-i57.