Manage Budgets And Financial Plans Essay

This project, I chose Woolworths Limited Annual melodic theme 2012 to answer the following questions To whom is this story disseminated and how is this through?The fiscal report provides people who argon interested in a confederacy such as sh beholders, l residueers, analysts and employees with nurture ab by the mo clear upary universe presentation and mo networkary sit of the ships alliance( A guide to understanding categoryly reports 2012). It is one means by which directors of the confederacy advise sh atomic number 18holders on how the profession has per embodimented during the form. The financial report too provides development to sh beholders on how the directors hasten complete their responsibilities. In other words, Current sh arholders and potential investors remain the primary audiences for one- stratum reports. Employees (who today are withal likely to be shareholders), customers, suppliers, partnership leaders, and the community-at-large are besi des targeted audiences.EmployeesThe yearbook report serves many purposes with employees. It provides management with an opportunity to adulation employee innovation, quality, team dress, and commitment, all of which are critical components in oerall chore success. In addition, an yearly report seat alike be employ as a vehicle to relate those party successesa refreshing contract, a new product, damage-saving initiatives, new applications of products, expansions into new geographiesthat have an wallop on its work force. Seeing a successful project or initiative visiblenessd in the annual report bemuses reinforcement to the employees responsible for the success. The annual report groundwork servicing increase employee understanding of the different parts of the family.Many manufacturing locations are in remote areas, and an employees understanding of the party often does not go beyond the facility where he or she works. An annual report can be a source for learning nigh separately of a ships companys product lines, its operating locations, and who is leading the various(a) operations. The annual report can show employees how they fit into the big picture. Employees also are often shareholders. So, like other shareholders, these employees can use the annual report to help gauge their investment in the company. In this case, the annual report can serve as areminder to employees of the impact that the work they do has on the value of the companys occupation value.CustomersCustomers want to work with quality suppliers of respect sufficients and helpings, and an annual report can help a company promote its image with customers by highlighting its integrated mission and core values. Describing company initiatives designed to improve manufacturing processes, tame costs, fool up quality, or enhance service can also illustrate a companys customer orientation. Finally, the annual report can also show the companys financial strength. Customers are reducing their subjugate of suppliers, and one evaluation criterion is financial strength. They want committed and equal suppliers that are going to be or so for the long term.SuppliersA companys abilities to meet its customers solicitments will be seriously compromised if it is saddled with incompetent or undependable suppliers. Successful companies today quickly weed out such companies. By highlighting internal measurements of quality, innovation, and commitment, annual reports can confide an implicit message to suppliers about the companys expectations of outside vendors. sometimes an annual report will even offer a profile of a supplier that the company has found exemplary. Such a profile serves two purposes. First, it rewards the supplier for its work and serves to further cement the headache relationship. Second, it provides the companys other suppliers with a better understanding of the level of service desired (and the rewards that can be reaped from such service) .The CommunityCompanies invariably bear a great deal of attention to their reputation in the community or communities in which they operate, for their reputations as corporate citizens can have a decisive impact on bottom-line financial performance. A company would much rather be known for its sponsorship of a benefit charity item than for poisoning a topical anesthetic river, whatever its other attributes. Annual reports, then, can be invaluable puppets in burnishing a companys public image. Many annual reports discuss community initiatives undertaken by the company, including community service projects, charitable contributions, volunteer efforts, and programs to help protect the environment. The objective is to present the company as a proactivemember of the community. This sort of publicity also can be valuable when a company is making plans to travel into a new community. Companies seek warm welcomes in new communities (including evaluate breaks and other incentives).Com munities will woo a company perceived as a good corporate citizen more zealously than one that is not. The good corporate citizen also will receive less resistance from local interest groups. The companys annual report will be one document that all affected parties will pore everyplace in evaluating the business. The way that the company cut 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 whitethorn elect to send shareholders a nasty copy or a concise report. A shareholder has the right to receive a hard copy, but must specifically request the printed version. Copies are lodged with ASIC and the ASX and are acquirable for inspection online.Why do these people need the information contained in the annual report? Those people need the information contained in the annual report because the financial accounts provide a wealth of informa tion that is useful to various users of financial information, as summarised belowUserInterest in / Use of Accounting InformationInvestorsInvestors are concerned about risk of exposure and return in relation to their investments. They request information to decide whether they should lodge to invest in a business. They also need to be able to assess whether a business will be able to cover dividends, and to measure the performance of the business management overall LendersBanks and other financial institutions who lend money to a business invite information that helps them fit(p) whether loans and interest will be paid when due CreditorsSuppliers and trade creditors require information that helps them understand and assess the short-term liquidity of a business. Is the business able to pay short-term debt when it falls due?Customers & DebtorsCustomers and trade debtors require information about the ability of the business to survive and prosper. As customers of the companys p roducts, they have a long interest in the companys range of products and services. They may even be dependent on the business for certain products or services EmployeesEmployees (and organisations that represent them e.g. trade unions) require information about the stability and inveterate profitability of the business. They are crucially interested in information about employment prospects and the maintenance of subvention funding and retirement benefits. They are also likely to interested in the pay and benefits obtained by senior managementGovernment in that respect are many government agencies and departments that are interested in be information. For example, the IR&CE needs information on business profitability in order to levy and collect Corporation Tax. Various regulatory agencies (e.g. the rival Commission and the Environment Agency) need information to support decisions about takeovers and grants, for example.Analysts enthronisation analysts are an important user gr oup specifically for companies quoted on a stock exchange. They require very detailed financial and other information in order to analyses the competitive performance of a business and its sector. ofttimes of this is provided by the detailed accounting disclosures that are necessitate by the capital of the United Kingdom Stock Exchange. However, additional accounting information is usually provided to analysts via formal company briefings and interviews.General publicInterest groups, formed by various groups of individuals who have a specific interest in the activities and performance of businesses, will also require accounting information.Table User of account (Riley 2012)What financial information does the report offer-describe the contents of the report and explain Under the Companies doing is required to prepare a differentiate of accounts that give a true and amusement park view of its profit or loss for the yearand of its state of personal business at the year end. Wool worths Annual accounts allowPerformance Summary harvest-tide PlansChairmans rootManaging Directors ReportThe Results in BriefFood, Liquor and PetrolGeneral MerchandiseHotelsHome profitConsumer ElectronicsDiscontinued OperationsOverheads, Expenses and Balance SheetCapital Management and expectationBoard of DirectorsDirectors Statutory ReportRemuneration ReportAuditors Independence DeclarationCorporate Governance Statement pecuniary Report to ShareholdersShareholder InformationFor 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 legal proceeding occurred in the company. Therefore, I will explain some contents to give some idea. Managing Directors Report The directors report of a listed company is required to contain information that shareholders of the company would reasonably require to make an informed assessment of the operations of the company reported on the financial position of that company the business strategies of that company and its prospects for futurefinancial age (unless their inclusion would be unreasonably prejudicial) The report by the directors will come across the names of the directors and officers of the company, and is required to contain information about options including share options, executive options, indemnity and insurance. The directors report includes a wage report that must include a discussion of the boards policy on remuneration and its relationship to company performance. The remuneration report includes information about the cost to the company of providing its directors and key management personnel with short-term employee benefits, post-employment benefits, other long-term employee benefits, termination benefits and share-based payment arran gements.For the managing directors report of Woolworths reveal that Woolworths joyful 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 after tax from continuing operations of 3.6% and by the end of FY12 Woolworths was Australias leading online retailer. These statement shows that they were achieve their goals and success during financial year 2012.Directors declarationThe Directors declare that(a) in the Directors opinion, there are reasonable lawsuit 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 attached financial statements are in compliance with International Financial Reporting Standards, as declared in 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 comp liance 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.295A of the Corporations Act 2001.Examine the financial summaries for information about the fiscal condition of the company. Did the company show a profit? Yes, Woolworths show a profitand for financial results net profit after tax from continuing operations change magnitude 3.6 per cent to $2.18 billion on total Group 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 force in recent years by significant price deflation, around the world. On a one off basis, this reduced our aftertax profits by 14.5% and earnings per share by 14.9%, compared to the previous year.What sorts of recommendations are made and what suggestions are made regarding business acti vities for the up-coming year? Business activities for the up-coming yearLeadership in food and liquorAct on Woolworths portfolio to maximize shareholder valueMaintain track record of building new rearthWoolworths expect further earnings growth in FY13, with net profit after tax from continuing operations expected to grow in the range of 3% 6% (on a normalised 52 week basis), subject to the uncertainties detailed above (note FY13 will be a 53 week year).Section 2Explain the following statement.Ratio abridgment can help in measuring business performance and backcloth objectives/goals. Ratio abstract is a form of Financial Statement Analysis that is used to obtain a quick indication of a rigids financial performance in several key areas. The ratios are categorized as Short-term Solvency Ratios, Debt Management Ratios, Asset Management Ratios, advantageousness Ratios, and Market Value Ratios. Also, ratio Analysis as a tool possesses several important features. The data, which ar e provided by financial statements, are right away available. The computation of ratios facilitates the comparison of firms which differ in size. Ratios can be used to compare a firms financial performance with labor averages.In 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 device used by accountants, but a useful tool that identifies strengths and weaknesses of a business and leads to questions about performance thatshould result in action. Moreover, ratios can be used to set performance goals. For instance, a business seeking to improve its cash work position may do so by setting targets to reduce average debtors and inventory turnover (Manage budgets and financial plans 2010). Understanding the relationship in the midst of these items and their impact on cash flow, gives greater control over the business and the ability to clearly communicate performance objec tives.