Requirement:

You will be required to write a management report to the management of Orion in which the following points should be discussed. 

  1. A detailed Literature Review of the tools you have used such as cash budgets, breakeven analysis, NPV and ratios and their importance to business. 
  2. Provide an explanation on the different sources of funding (3 maximum) the company can use and their advantages and disadvantages and make recommendations as to how the company can manage the same to help in the planned expansion program. 
  3. Analyze the Investment proposal by using NPV and provide recommendations. You should also briefly comment on other investment proposal techniques that Orion may use, and the limitations of using those techniques  4
  4. A computation of your breakeven analysis and the cash budget for the first 3 months. 
  5. What other factors may a firm take into account when making investment decisions. 
  6. Based on the information provided and to the extent possible, perform ratio analysis and make recommendations as to which company they should be looking to invest ¡n. What other information will help you in making an informed decision on ratio analysis. 
  7. An evaluation of company performance or position during the same period
  8. Other issues for management to consider that you think are vital for them to survive and make a profit.
  9. All ratio analysis and Breakeven analysis need adding horizontal and vertical tables.

 

Group Management Report should include: 

Title Sheet 

Contents Page 

Introduction 

Literature review to support your accounting models used.  

Sources of Funding 

Investment appraisal using NPV 

Breakeven analysis 

Cash budgeting 

Ratio analysis: 1. Profitability ratios – return on capital employed

  •            return on overall assets

Gross profit margin

Operating profit margin

Net profit margin

  1. Working capital ratio – receivable days ratio

Payable days ratio

Inventory days ratio

Working capital cycle

  1. Liquidity ratios – current ratio

Quick ratio

  1. Solvency – Gearing ratio LT debt/equity

Coverage ratio – (profit before tax & interest)/ interest

Leverage ratio – Debt/EBITDA (operating profit before depreciation & amortization)

  1. Asset efficiency – Noncurrent asset turnover – revenue/ noncurrent assets

ROCE

Sales/ Working Capital

Evaluation 

Any other issues to be considered. 

Conclusions and Recommendations 

Appendixes

 

Requirements

Coursework based on company performance, budgeting and financial decision making:

Coursework Submission should include: Evidence of research.

Learning Outcomes

 

  1. Select and apply appropriate accounting techniques to critically analyses financial data in a variety of business decision making scenarios
  2. Make informed financial judgments based on the outcome of such accounting analyses
  3. Critically appraise the techniques used and the information to which they have been applied
  4. Understand the objectives of preparing management information and the need to adapt techniques in a changing commercial environment
  5. Apply techniques to evaluate management decisions in relation to costing, pricing, product range and marketing strategy
  6. Identify and apply appropriate budgeting techniques to enable management to control the Business

Reading Essential Reading

Proctor, R. (2006) Managerial Accounting for Business Decisions Edition 2, FT Prentice Hall, Harlow, ISBN 0-273-68155-9 Recommended Reading Penman, S. (2007), Financial Statement Analysis and Security Valuations, 3rd Edition, McGraw Hill Ross, S.A., Wester field, R. and Jaffe, J. (2007) Modern Financial Management, McGraw Hill Education, UK Requirement: you will be required to write a management report to the management of Orion in which the following points should be discussed. • 1. a detailed literature review of the tools you have used such as cash budgets, break-even analysis, NPV and ratios and their importance to business. • 2. provide an explanation on the different sources of funding (3 maximum) the company can use and their advantages and disadvantages and make recommendations as to how the company can manage the same to help in the planned expansion program. • 3. analyses the investment proposal by using NPV and provide recommendations. you should also briefly comment on other investment proposal techniques that Orion may use, and the limitations of using those techniques • 4 4. a computation of your break-even analysis and the cash budget for the first 3 months. • 5. what other factors may a firm take into account when making investment decisions. • 6. based on the information provided and to the extent possible, perform ratio analysis and make recommendations as to which company they should be looking to invest ¡n. what other information will help you in making an informed decision on ratio analysis. • 7. an evaluation of company performance or position during the same period 8. other issues for management to consider that you think are vital for them to survive and make a profit. 9. all ratio analysis and break-even analysis need adding horizontal and vertical tables. group management report should include: • title sheet • contents page • introduction • literature review to support your accounting models used. • sources of funding • investment appraisal using npv • break-even analysis • cash budgeting • ratio analysis: 1. profitability ratios – return on capital employed • return on overall assets gross profit margin operating profit margin net profit margin 2. working capital ratio – receivable days ratio payable days ratio inventory days ratio working capital cycle 3. liquidity ratios – current ratio quick ratio 4. solvency – gearing ratio let debt/equity coverage ratio – (profit before tax & interest)/ interest leverage ratio – debt/ebitda (operating profit before depreciation & amortization) 5. asset efficiency – non-current asset turnover – revenue/ non-current assets roce sales/ working capital evaluation • any other issues to be considered. • conclusions and recommendations • appendixes requirements coursework based on company performance, budgeting and financial decision making: coursework submission should include: evidence of research. learning outcomes 1. select and apply appropriate accounting techniques to critically analyses financial data in a variety of business decision making scenarios 2. make informed financial judgments based on the outcome of such accounting analyses 3. critically appraise the techniques used and the information to which they have been applied 4. understand the objectives of preparing management information and the need to adapt techniques in a changing commercial environment 5. apply techniques to evaluate management decisions in relation to costing, pricing, product range and marketing strategy 6. identify and apply appropriate budgeting techniques to enable management to control the business reading essential reading proctor, r. (2006) managerial accounting for business decisions edition 2, ft. Prentice hall, Harlow, ISBN 0-273-68155-9 recommended reading penman, s. (2007), financial statement analysis and security valuations, 3rd edition, McGraw hill Ross, S.A., waster field, r. and Jaffe, j. (2007) modern financial management, McGraw hill education, UK the data and balance sheet is in following

 

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