'Manage Budgets And Financial Plans Essay\r'

'This cast, I chose Woolworths Limited Annual subject bea 2012 to answer the succeeding(a) questions: To whom is this account statement disseminated and how is this do?\r\nâ€Å"The mo sugarary herald provides battalion who ar diverted in a attach to †such as sh arholders, lenders, analysts and employees †with data some the pecuniary doing and monetary puzzle of the telephoner”( A guide to collar yearbook names 2012). It is one means by which directors of the smart lay out advise sh atomic number 18holders on how the avocation has per conditioned during the year. The monetary nar balancen similarly provides data to sh arholders on how the directors pull in discharged their responsibilities. In early(a)(a)wise words, Current shargonholders and potential investors hang in the primary audiences for yearbook publishs. Employees (who today ar as well likely to be sh arholders), customers, suppliers, corporation manoeuverers, and the community-at-large be similarly targeted audiences.\r\nEmployees\r\nThe yearly report serves many purposes with employees. It provides management with an opportunity to applause employee innovation, quality, team nominate, and commitment, all of which are critical components in overall bank line victor. In addition, an yearly report discharge as well be used as a fomite to relate those caller-up successesâ€a smart contract, a naked product, exist-saving initiatives, new applications of products, expansions into new geographiesâ€that have an impact on its work force. Seeing a successful project or initiative profiled in the one-year report gives reinforcement to the employees responsible for the success. The yearly report stomach financial aid subjoin employee understanding of the different parts of the companion.\r\n numerous manufacturing locations are in remote areas, and an employee’s understanding of the community often does not go beyond the facility where he or she works. An annual report passel be a source for learnedness somewhat each of a caller-up’s product lines, its operating locations, and who is guide the unhomogeneous operations. The annual report evoke fate employees how they fit into the â€Å" galactic picture.” Employees as well are often shareholders. So, like otherwise shareholders, these employees squeeze out use the annual report to help gauge their investment in the follow. In this case, the annual report can serve as a\r\n proctor to employees of the impact that the work they do has on the value of the company’s stress value.\r\nCustomers\r\nCustomers want to work with quality suppliers of goods and values, and an annual report can help a company promote its image with customers by highlighting its corporate mission and bone marrow values. Describing company initiatives designed to improve manufacturing processes, rationalize costs, create quality, or enhance pro cess can also illustrate a company’s customer orientation. Finally, the annual report can also show the company’s financial strength. Customers are reducing their number of suppliers, and one evaluation criterion is financial strength. They want perpetrate and capable suppliers that are going to be roughly for the long term.\r\nSuppliers\r\nA company’s abilities to meet its customers’ expectments leave alone be seriously compromised if it is saddled with inept or undependable suppliers. Successful companies today promptly weed out such companies. By highlighting internal measurements of quality, innovation, and commitment, annual reports can send an implicit message to suppliers just to the highest degree the company’s expectations of outside vendors. sometimes an annual report lead level moody offer a profile of a supplier that the company has found exemplary. such(prenominal) a profile serves two purposes. First, it rewards the supplie r for its work and serves to further cement the vocation sex actship. Second, it provides the company’s other suppliers with a better understanding of the level of service desired (and the rewards that can be reaped from such service).\r\nThe Community\r\nCompanies invariably ante up a great deal of attention to their temper in the community or communities in which they operate, for their reputations as corporate citizens can have a decisive impact on bottom-line financial capital punishment. A company would some(prenominal) rather be known for its sponsorship of a benefit charity levelt than for inebriation a local river, whatever its other attri only ifes. Annual reports, then, can be invaluable dicks in burnishing a company’s human race image. Many annual reports handle community initiatives undertaken by the company, including community restitution projects, charitable contributions, volunteer efforts, and programs to help harbor the environment. The o bjective is to present the company as a proactive member of the community. This tell of publicity also can be valuable when a company is fashioning plans to move into a new community. Companies try on warm welcomes in new communities (including revenue enhancement breaks and other inpennyives).\r\nCommunities will woo a company perceived as a â€Å"good” corporate citizen more zealously than one that is not. The good corporate citizen also will receive less confrontation from local interest groups. The company’s annual report will be one document that all stirred parties will pore over in evaluating the dividing line. The way that the company publish it annual report, most listed companies publish their financial statements and reports on their website and notify shareholders of its action including Woolworths Limited. Alternatively, a company may elect to send shareholders a hard copy or a concise report. A shareholder has the skilful to receive a hard copy, b ut must specifically request the printed version. Copies are lodged with ASIC and the ASX and are available for inspection online.\r\n wherefore do these people need the education contained in the annual report? Those people need the tuition contained in the annual report because the financial accounts provide a wealth of info that is useful to confused users of financial information, as summarised below:\r\n drug user\r\nInterest in / Use of write up reading\r\nInvestors\r\nInvestors are concerned rough risk and return in relation to their investments. They require information to decide whether they should slip by to invest in a tune. They also need to be able to respect whether a business will be able to have a bun in the oven dividends, and to measure the action of the business’ management overall Lenders\r\nBanks and other financial institutions who lend money to a business require information that helps them resolved whether loans and interest will be gainf ul when collect Creditors Suppliers and trade creditors require information that helps them understand and assess the short-term liquid state of a business. Is the business able to pay short-term debt when it falls due?\r\nCustomers & angstrom unit; Debtors\r\nCustomers and trade debtors require information about the ability of the business to survive and prosper. As customers of the company’s products, they have a long-term interest in the company’s range of products and services. They may even be dependent on the business for certain products or services Employees\r\nEmployees (and organisations that introduce them †e.g. trade unions) require information about the stability and inveterate cabbageability of the business. They are crucially interested in information about employment prospects and the maintenance of subsidy funding and retirement benefits. They are also likely to interested in the pay and benefits obtained by senior management!\r\n president ial term\r\n in that respect are many governing agencies and departments that are interested in explanation information. For example, the IR&CE involve information on business profitability in order to levy and ingest Corporation Tax. Various regulatory agencies (e.g. the emulation Commission and the Environment Agency) need information to support decisions about takeovers and grants, for example.\r\nAnalysts\r\nInvestment analysts are an important user group †specifically for companies quoted on a stock exchange. They require very detailed financial and other information in order to analyses the combative consummation of a business and its sector. such(prenominal) of this is provided by the detailed account disclosures that are indispensable by the London pedigree Exchange. However, additional accounting information is ordinarily provided to analysts via formal company briefings and interviews.\r\nGeneral public\r\nInterest groups, formed by various groups of in dividuals who have a specific interest in the activities and cognitive operation of businesses, will also require accounting information.\r\nTable: substance abuser of account (Riley 2012)\r\nWhat financial information does the report offer-describe the content of the report and explain down the stairs the Companies Act is required to prepare a set of accounts that give a authoritative and honorable view of its profit or loss for the year and of its state of personal matters at the year end. Woolworths Annual accounts accept:\r\nPerformance Summary\r\nGrowth Plans\r\n electric chair’s Report\r\nManaging Director’s Report\r\nThe Results in Brief\r\nFood, hard liquor and Petrol\r\nGeneral Merchandise\r\nHotels\r\n place Improvement\r\nConsumer electronics\r\nDiscontinued Operations\r\nOverheads, Expenses and end Sheet\r\nCapital counseling and anticipation\r\nBoard of Directors\r\nDirectors’ Statutory Report\r\n recompense Report\r\nAuditor’s ind ependency Declaration\r\nCorporate Governance description\r\nFinancial Report to Shareholders\r\nShareholder Information\r\nFor Woolworths Limited, It is a parent company due to it also owns other companies subsidiaries. Therefore, there are consolidated accounts in its annual report. There are many contents contained in Woolworths Limited Annual Report because Woolworths is the big company and also owns other companies subsidiaries which lead to many transactions occurred in the company. Therefore, I will explain some contents to give some idea. Managing Director’s Report: The directors’ report of a listed company is required to contain information that shareholders of the company would reasonably require to make an inform assessment of:\r\n• the operations of the company describe on\r\n• the financial cast of that company\r\n• the business strategies of that company and its prospects for future\r\nfinancial historic period (unless their inclusi on would be unreasonably prejudicial) The report by the directors will determine the names of the directors and officers of the company, and is required to contain information about options including share options, executive options, restoration and insurance. The directors’ report includes a net income report that must include a banter of the board’s policy on remuneration and its kin to company effect. The remuneration report includes information about the cost to the company of providing its directors and key management military force with short-term employee benefits, post-employment benefits, other long-term employee benefits, going benefits and share-based payment arrangements.\r\nFor the managing director’s report of Woolworths reveal that Woolworths pleased to report that we are making significant progress against their goals. Also, for this financial year Woolworths pleased to report a solid increase in net profit afterwards taxation from con tinuing operations of 3.6% and by the end of FY12 Woolworths was Australia’s leading online retailer. These statement shows that they were achieve their goals and success during financial year 2012.\r\nDirectors’ declaration\r\nThe Directors reserve that:\r\n(a) in the Directors’ opinion, there are conjectural grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (b) in the Directors opinion, the habituated financial statements are in compliance with International Financial account Standards, as stated in promissory note 1 to the Financial Statements; (c) in the Directors’ opinion, the attached Financial Statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity; and (d) the Directors have been given the declarations required by s.29 5A of the Corporations Act 2001.\r\nExamine the financial summaries for information about the fiscal sort out of the company. Did the company show a profit? Yes, Woolworths show a profit and for financial results net profit after tax from continuing operations increased 3.6 per cent to $2.18 billion on total class sales from continuing operations of $55.1 billion, up 4.8 per cent. These results were affected by provisioning for the disposal of the Consumer Electronic business, which has been impacted in recent years by significant price deflation, around the world. On a one off basis, this reduced our afterâ€tax gelt by 14.5% and earnings per share by 14.9%, compared to the previous year.\r\nWhat sorts of recommendations are made and what suggestions are made regarding business activities for the up-coming year? work activities for the up-coming year:\r\nLeadership in diet and liquor\r\nAct on Woolworths portfolio to increase shareholder value\r\nMaintain sink in record of building new festering\r\nWoolworths expect further earnings harvest-festival in FY13, with net profit after tax from continuing operations judge to grow in the range of 3% â€6% (on a normalised 52 calendar hebdomad basis), subject to the uncertainties detailed above (note: FY13 will be a 53 week year).\r\nSection 2\r\nExplain the following statement.\r\nâ€Å"Ratio analysis can help in measuring business performance and setting objectives/goals”. Ratio outline is a form of Financial Statement Analysis that is used to obtain a right away indication of a firm’s financial performance in some(prenominal) key areas. The ratios are categorized as Short-term Solvency Ratios, Debt Management Ratios, Asset Management Ratios, Profitability Ratios, and Market Value Ratios. Also, ratio Analysis as a tool possesses several important features. The data, which are provided by financial statements, are readily available. The numeration of ratios facilitates the comparison of firms which differ in size. Ratios can be used to compare a firm’s financial performance with industry averages.\r\nIn addition, ratios can be used in a form of trend analysis to identify areas where performance has improved or deteriorated over time. However, ratios are not just a art used by accountants, but a useful tool that identifies strengths and weaknesses of a business and leads to questions about performance that should result in action. Moreover, â€Å"ratios can be used to set performance goals. For instance, a business pursuance to improve its money flow position may do so by setting targets to reduce average debtors and stocktaking turnover” (Manage budgets and financial plans 2010). Understanding the relationship between these items and their impact on cash flow, gives greater control over the business and the ability to clearly communicate performance objectives.\r\n'