Management Accountant's Report for a Company

Contents Page

It is the end of the financial year and you are required to produce a management accountant’s report to be given to the company’s chief financial officer (CFO). Choose a company (real or created) and create a report using Microsoft Word showing both the original budgeted results for the financial year and the actual results for thefinancial year.  Insert graphs and tables taken from Microsoft Excel where appropriate. Save the final version as a PDF and upload the file to Turnitin.

Include the following:

• Contents Page

• Report Summary: Summarise main findings in report including how company has performed over the year and how the company has performed relative to the budget. One paragraph, approximately.

• A budgeted Statement of Profit & Loss, shown monthly for a period of 12 months for the financial year, including a 13th column showing the total for the year.

• An actual Statement of Profit & Loss, shown monthly for a period of 12 months, including a 13th columnshowing the total for the year.

• Both actual and budgeted Statements of Profit & Loss should display the following headings (you do notneed to break categories down further than this):

o Sales

o Direct Materials (variable)

o Direct Labour (variable)

o Variable Overheads (variable or semi-variable)

o Fixed Overheads (fixed, stepped fix, or semi-variable)

o Gross Profit

o Administration Costs (fixed, stepped fix, or semi-variable)

o Distribution Costs (fixed, stepped fix, or semi-variable)

o Selling Costs (fixed, stepped fix, or semi-variable)

o Operating Profit

o Finance Costs (fixed, stepped fix, or semi-variable)

o Profit Before Tax

o Tax (fixed – evenly spread across year)

o Profit After Tax

• The following graph for the actual performance only. Provide a brief comment on interpreting what the data from the graphs means and what the implication is for the business:

A pie chart showing the relative size of each of the costs for the year.

• The following graphs comparing the budgeted against the actual performance. Provide a brief comment on interpreting what the data from the graphs means and what the implication is for the business:

A line graph comparing 12 months of budgeted against actual sales

A line graph comparing 12 months of budgeted against actual gross profit

A line graph comparing 12 months of budgeted against actual operating costs  (administrative costs + selling costs + distribution costs)

o A line graph comparing 12 months of budgeted against actual operating profit

• The following cost variances. In the comments include an interpretation of what the variance result means and the implication for the business:

3 sales variance calculations with brief comment

3 direct materials variance calculations with brief comment

3 direct labour variance calculations with brief comment

3 variable overhead variance calculations with brief comment

3 fixed overhead variance calculations with brief comment

• A budgeted Statement of Financial Position at year end and an actual Statement of Financial Position at year end with the following headings:

o NON-CURRENT ASSETS

o Plant & Machinery

o CURRENT ASSETS

o Cash

o Inventory

o Trade Receivables

o TOTAL ASSETS

o EQUITY

o Share Capital

o NON-CURRENT LIABILITIES

o Bank Loan

o CURRENT LIABILITIES

o Trade Payables

o TOTAL EQUITY AND LIABILITIES

o Ensure that both statement balance (i.e. total assets = total equity and liabilities)

• The following performance ratios calculations:

o 4 profitability ratio calculations for both budgeted and actual years

o 2 liquidity ratio calculations for both year start and year end

o 3 activity ratio calculations for both budgeted and actual years

o 2 risk ratio calculations for both budgeted and actual years

• The following bar chart graphs and a brief comment stating what the variance result means and the implication for the business:

o 4 profitability ratio charts showing both budgeted and actual

o 2 liquidity ratio calculations for both year start and year end

o 3 activity ratio calculations for both budgeted and actual years

o 2 risk ratio calculations for both budgeted and actual years

• General written style, spelling, grammar, punctuation and overall presentation of financial statements, graphs, calculations, and the report as a whole.