The Importance of Cash Flow Management

The Importance of Cash Flow Management An understanding of effective cash flow statement and its further management is vital tool for the long term survival of an entity`s cash flows. It is also a key factor in planning and in the competent performance of all aspects of operations. The phrase revenue is sanity, profit is vanity but cash is king is an appropriate phenomenon that companies have to consider and embedded in their cash management strategy. It should be noted that profits are not an acceptable means of measuring and ensuring good cash flow, since it is not a major piece of cash flow management. Once cash inflows and outflows are received and money paid out are not effectively considered and monitored, corporations may possibly not be able to settle their employees and vendors on time. Hence, lack of good cash flow management could lead to companies inability to pay their bills as and when they fall due but yet these companies may have huge profits in their annual financial statements. 1.0 Background of the study Discounted cash flow analysis is widely used in investment finance,  real estate development, and corporate financial management. Indeed, a managers primary goal is to maximise the value of his or her firms stock. Value is based on the firms future cash flow. (F.Houston 2007 ,p.10). How does bank estimate that cash flow and how that cash flow will be used in future investment? The answers to both questions lie in a study of financial statement and risk related to transactions concerned with. Analysts describe the activities of a business in either operating or financial terms. Usually, to evaluate its operating profit, a business firm buys raw materials and combine them with actor as capital and labour to produce goods and services. Later on, the company will sell these goods or services to others at a higher price enough to yield return above the cost of the raw material, capital and labour used. In financial terms, the business obtains funds through creditors and owners, and spen ds them for raw material, labour and fixed assets. To see if a firms management has achieved its objectives, we must analyse the companys return and risk measures. Measuring returns consist of calculating profitability and risk measurement for the bank. 1.1 Overview of the company The creation of the UK largest retailer goes back to 1919, when John Edward (Jack) Cohen a retailers product line started selling surplus groceries from a stall in the East End of London. The name Tesco originated in 1924 when he bought a shipment of tea from a Mr T. E Stockwell, from whom the initials TES come from and CO from Jacks surname. In 1929 Mr Cohen opened a flagship Tesco store in Burnt Oak, North London and founded in 1939 Tesco stores limited. Today the company is a public limited and employs 470,000 people in more than 14 countries, and is the UK largest grocery retailer and the third worldwide. In the UK: Over the next decade following its creation, Tesco opened more than 100 small stores, mainly in the London area. The company expanded rapidly across the United Kingdom. Started with the acquisition of smaller grocery chains including the nineteen stores Burnards chain in 1955, and has now, 2362 stores ranging from superstores to express and petrol stations. Since the 1990s Tesco has developed an aggressive marketing campaign in an attempt to overtake Sainsburys and become the UKs leading retailer since 1995. In 1992, the company launched is slogan every little helps followed by the Tesco Value range in 1993 and the launch of his loyalty scheme, clubcard in 1995. Today Tesco is the first retailer in the UK with a groups sales of  £62,537 billion, a rise of 6.8% and  £3,412 billion group trading profit (12.3% growth) Abroad: The Company is now present in more than thirteen countries since 1995 when it first expanded to Tesco Hungary to, the USA in 2007. Strategy: The Companys strategy has been revised since 1997, the year Terry Leahy was named chief executive officer. Tesco has developed a growth strategy, the one that was ambitious in its design. In the coming years, the company directed its expansion efforts on its core U.K. business, retailing services, international operations, and non food business. Store types: Tesco has Extra, Superstore, Metro, Express, Tesco.com. Store offerings: Food retail, Non food retail, Petrol stations, Home living range. Tesco personal finance: life insurance, pet insurance, home insurance, travel insurance, motor insurance, saving account, personal loans, secure investment bonds, online mortgage finder The company aims: This dissertation was dedicated to the financial area, especially to financial management and risk involved. The proposed title of this dissertation is as follow: How important is for manager to have a good understanding of cash flow statement in a retailing industry. 1.2 Aims and objectives The aim of this research was to evaluate the overall performance of retailing sector a case study of Tesco Plc being chosen by taking into consideration its cash flows and risk involved. The researcher aims to understand the issues related to cash flow statement and relate it to risk involved and how to improve the management cash flow. Furthermore setting some aims and objectives are of a high importance as they outline some targets, tasks, guide and thus facilitate the research process. Objectives Identification of the key factors included in a cash flow statement Establishment of the straight relationship between the cash inflow and cash outflow Identification of the element that affect (risk) the successful cash flow The areas in need of cash flow What are the advantages of good knowledge of cash flow analysis Recommendation of new strategies and techniques to improve organizations overall cash flow performance Rationale of the Study The essence of commissioning this research was to establish the need for the company managers to have a good and a deeper understanding of the cash flow statement. After having considered the rate at which corporations are faced with liquidations as a result of going concern problems. The dependencies of profit/ income statement for financing decision making by most businesses over the years have result to these corporations failing to meet the expectations of their long term objectives. With this study the managers would realise the importance of the role the cash flow statement plays in the organisations cash flows management status. The other annual financial statements do not through more light on the financing needs/ requirement and management of the entities. However, the cash flow statement provides more and strong indicators that assist corporations to know the strength and weaknesses of their cash flow generation approaches. 1.4 Significance of the study Cash flows information of a company is very significant element in providing users of financial statements with a basis to measure the capability of the business to generate cash and cash equivalents and the desires of the business to make use of those cash flows. The financial decisions that users (both shareholders and stakeholders) make depends an appraisal of the strength of the business to generate cash and cash equivalents by having regard to the certainty and their ability to generate those cash (Ramachandran, 2007). The cash flow statement deals with the consideration of information concerning the historical changes in cash and cash equivalents of a company and categories cash flows in to certain groups. This research will no doubt be a significant tool in financing decisions for managers, shareholders and stakeholders at large. 1.5 The Research problem In recent years so many businesses have had to depend on excessive borrowings from the banks, credit agencies and other financial institutions. Cash flow shortages result to increase in costs, due to interest companies need to pay on borrowed loans, late-payment which may lead to fines, and subsequently the discounts that could be lost for paying bills lately. Lack of cash flow improvements can compound these unexpected costs and could result to difficulty in accessing credit and unfavourable payment terms on some types of purchases. Eventually, corporations that get better in the manner in which their receipts of cash and payment of cash are managed would be more flourishing than their counter-parts. 1.6 Research question After identifying the aims and objectives of this study, the research attempted to answer the following questions. What is cash flow concept? How is it used in an organisation? What is the impact of financial statements when valuing the cash flow statement? What are the review conceptual models and theoretical fragments related to cash flow? What review cash flow statement used by Tesco? What are the risks faced by the company when evaluating their cash inflow and cash outflow? The overall impact on cash flow statement inside and outside the industry 1.7 The dissertation outline The study has been organised in a manner that makes it much easier to read and understand. As a consequence the outline is as follows: Chapter one: introduction was concerned with general overviews of the study by presenting the aims and objectives, the significance of carrying such research as well as some questions faced by managers when valuing their liquidity. Chapter two: literature reviews was applied as others opinion, what authors has writing and thinking about cash flow management. Chapter three: methodology was highlighting the different techniques and approach used to carry out our research so that readers and manager can have a Chapter four: data analysis was presented as the methodology used to conduct this research successful .it furthermore presented the chosen analytical method in accordance with qualitative approach chosen in this study. The data collected are analysed using a qualitative analytical method the methodology used to conduct this study has been discussed. in this chapter and evaluated in accordance with the theoretical framework established from the literature review. Chapter five: conclusions and recommendations 1.8 summary This chapter gave an insight of the research project by presenting the company Tesco plc which is subject to inquiry, highlighting the aims and objectives, and discussing the significance of carrying such project as well as the limitations. The subsequent chapter reviews the literature of direct marketing, discussed by prominent authors.

The Role of Financial Managerial Accounting Function

Accounting is a major part of an organization or business, it help to provided information needed to manage and make economic decision in order to move the company or organization forward. Financial and managerial accounting work together with emphasis on the future of the company, but have different proposes that helps to enhance the organization both ways as in internal and external. The main purpose of financial accounting is to provide an external performance of the company or organization accomplishment to their stockholder, lenders, financial analysts, and creditors, tax authorities by prepare financial statement. However, it also reports past and present transactions on the balance sheet and the company’s income and cash flow statement. Managerial accounting is use to focus on providing information within the company or organization, of which includes planning and making decision for the company, it’s a manager’s job, he/she must have proficiency in the managerial accounting because it is the foundation of the company’s future, and the manager’s aim is to control the company’s operation by improving the way internal reports and external financial statement will be used in decision making within the company. In addition, Managerial accounting deal with topics such as cost behavior, profit planning, operational budgeting are all financial decision to be made to produce the external financial statements and its the managers of the managerial accounting department responsibility to have them done. To compare the two accounting system I would have to say they have similar function, they both produce reports one for external and one for internal that is use for making decision for the company. The managerial accounting deal with confidential financial reports that is used by the CEO’s within the organization or company, these reports are consist of sales forecasting, the company’s budgets analysis and comparative analysis and any type of merge or consolidation reports the company did in a day, weeks or months. In addition, these reports is generated on a timely basic such as weekly or monthly it is more flexible than financial reports, and it does not focus on general accepted accounting principles (GAAP). Moreover it is use by the CEO to fore see the future of where the company is going. The financial accounting is more concern with the external aspect of the company, so when generating the reports for their stockholders, lenders, financial analysts, and others outside of the company they apply the general accepted accounting principles (GAAP). In addition financial account reports or focus on the past in a more historical factor of the four financial statement of which include a balance sheet, income statement, owners’ equity statement and cash flows statement, the report are generated for a set period of time such as a fiscal year to give the company a history for the hold years. In conclusion financial and managerial accounting can be said that they play a very important part in business making decision, if the rules are apply in the correct and ethical manner by the CEO’s and mangers .

Statement of Purpose for the Masters Degree

Statement of purpose for the Masters Degree The information included herewith in my writing would elaborate on the reasons that motivate me to study at the University of Reading, prestigious Henley business school, and will further elaborate the causes for the selection of the specific path of study. Further in the latter part of my discussion I would like to explain the reasons for me to apply for a scholarship at the benevolence of a sponsor.Having earned a BSc (Accounting) Special (Hons) degree with a first class standing from University of Sri Jayewardenepura which is reputed as the faculty with the highest demand for management study in Sri Lanka and earning continuous professional development in PricewaterhouseCoopers for over three years, initially at a trainee level and then as a Senior Associate, I have shown an overwhelming interest on the field of financial reporting.The performance grades earned by me in PwC is fascinating since I was rated as â€Å"1† once and â⠂¬Å"2† twice, which denotes â€Å"Outstanding† and â€Å"Exceeding expectations† respectively, being the only one in the peer group to make such an achievement and these ratings consolidated my position further as a resource person in PwC on financial reporting and assurance services. I believe both the professional experience excellence and the academic excellence on the field of accounting and financial reporting have raised a knowledge hungry, enthusiastic to learn individual.Along with the real accounting problems faced by companies, learning advanced Accounting theory from reputed professors in Sri Lanka, enhanced my skills on the practice and sharpened me with my ability to think accounting problems in the practical context. Further to that, presentation skill was enhanced during the course of study and training and during the learning and development sessions held by PwC. Further to the above I pursued Chartered Accountancy professional course conducted by the Institute of Chartered Accountants of Sri Lanka and in pursue I won four prizes in all first three levels.This made me to be ranked among one of the very few achievers in Sri Lankan history on both the professional and academic qualifications. Currently I am pursuing the final level of the said course. The prizes (Highest Marks in the country for the exam) I won include Foundation level quantitative methods for decision making and second in Order of Merit for overall performance. In the intermediate level I won the prize of Second in Order of Merit for overall performance in that exam. Then I won the prize for excellence in business systems in the Final-1 level exam.These achievements coupled with the very special achievement that I was 8th in the island (Sri Lanka) in Advanced Level examination held in 2006 made me a prospective resource person in Sri Lanka in the field of financial reporting, and depicted the special interest shown by me on the specific sphere from the childh ood. Having seen the caliber of certain academics and professionals in the field of accounting and financial reporting I believe I have to further learn sophisticated areas on these subjects.One of the reasons I want to study further is to reach at least the same level of intuitiveness and panoramic view of the subject as my teachers and the professionals I have met have developed. However all these achievements were made by me in spite of very many economic difficulties since my family’s bread earner is only my father who is a retired lowest level government servant (His designation was Village Officer).I have a brother who still studies in the school for his A/L s and I worked in part time jobs during my all the time said achievements were made by me. I am a hard-working and determined person, and I am ready for a new leap in my business career. I am solely in a quest towards more knowledge and excellent competitive learning environment, with state of the art facilities. Th e only reasonable decision for me was to aim for such a place. All this gives me the motivation to apply to University of Reading, Henley Business School.

Cyber Deviance Among Adolescents And Adolescents - 1714 Words

Cyber Deviance among Adolescents Introduction The effect technology has had on communication has granted access to much of the youth to abuse the intimacy that they have now taken for granted. â€Å"Cyber Deviance† is an umbrella term that includes digital piracy, computer hacking, and sexting which is on the rise among adolescents (Udris, 2016). Examination of the theoretical structure toward explaining this type of behavior could possibly provide the public the genesis. Theoretical components emphasizing in social learning, self-control, and differential association have been used with a positivist approach – more specifically the positivist’s assumption of determinism – to try to explain adolescent â€Å"cyber deviant† sexual behavior (Journal†¦show more content†¦In the development of newly acquired psychological and physical abilities, in combination with new social boundaries to prevent expression of those newly acquired abilities, many adolescents participate in activities like premarital sexual exploration, that crosses social boundaries, and these are then referenced in the literature as deviant behaviors (Goode, 1990). Theoretical Application Sexual exploration in adolescence by means of a cellular telephone camera was not something that many could have foretold. While statistically sexual exploration in adolescence is expected, determining a clear reason as to why adolescents choose sexting as their means of exploration is not quite known. However, social learning theory is a good candidate for the explanation. Generally, sexuality has been framed as a biologically centered force within Freud’s psychodynamic theory, which is quite different from how it is represented in what is a more cognitive oriented social learning theory (Hogben Byrne, 1998). Those who stand by social learning theory are in support of the belief that sexuality has value at all ages, however, they tend to ignore the concept of sexuality as a biological drive, like a force (Hogben Byrne, 1998). Social learning theory in concise terms is basically people learning from one another whether by imitation or observation in a social context (Ahern Mechling, 2013). By this definition, the assumption that the reason adolescentsShow MoreRelatedBrain Development : Understanding The Brain During The Apex Of Development799 Words   |  4 PagesUnderstanding the brain during the apex of development, also known as adolescence, allows not only scientists but also parents to work towards an understanding of future generations. In this website, the effects of adolescence, the differences between an adolescent and adult, and the influences of environment will all be thoroughly discussed. When adolescence begins, there are many psychological effects on the teenager. To begin with, there are many hormonal chang es involving large releases of hormones, whichRead MoreCyber Bullying: A Study of Long Term Effects on Adolescent Cyber Bullying1561 Words   |  7 PagesIntroduction: Cyber bullying is a topic that has been researched many times. As technology changes, it is important that research is kept up to date on how victimization can affect present and future psychosocial adjustment issues. Cyber bullying is defined as victimization that intends to harm another through electronic means, where individuals can harm without physical interaction. (Tokunaga, 2010). Cyber bullying requires little planning and there is little chance of being caught. It is importantRead MoreViolence And Sexual Content And The Media2947 Words   |  12 Pagesand think that it is socially acceptable and because of that it makes them want to act it out in their daily lives. Sex and violence in the media has changed so much and plays a major part influencing negative behavior in teens by promoting sexual deviance, increasing violence in teens, and impacting psychological health in a negative way. This is why television should have more restrictions for sexual and violent content. History of Sex and Violence in Media Media has changed so much over time because