Manage Budgets And Financial Plans Essay

This project, I chose Woolworths moderate Annual Report 2012 to answer the by-line questions To whom is this state disseminated and how is this done?The pecuniary report provides pot who be pastimeed in a partnership much(prenominal) as sh beholders, lenders, analysts and employees with schooling closely the pecuniary consummation and mo authoriseary position of the participation( A guide to understanding one- family reports 2012). It is one means by which directors of the union advise sh beholders on how the work has performed during the year. The financial report besides provides cultivation to look atholders on how the directors put up discharged their responsibilities. In most other words, Current sh arholders and potential investors remain the primary audiences for yearbook reports. Employees (who today are also likely to be shareholders), customers, suppliers, participation withdrawers, and the community-at-large are also targeted audiences.Empl oyeesThe yearly report serves some(prenominal) purposes with employees. It provides steering with an opportunity to praise employee innovation, quality, team ope dimensionn, and commitment, all of which are critical components in overall business success. In addition, an annual report git also be used as a vehicle to relate those political party successesa new contract, a new product, cost-saving initiatives, new applications of products, expansions into new geographiesthat hold an impact on its work force. Seeing a successful project or initiative profiled in the annual report gives inscriptionation to the employees responsible for the success. The annual report kindle help increase employee understanding of the different parts of the company. umpteen manufacturing locations are in remote areas, and an employees understanding of the company often does not go beyond the facility where he or she works. An annual report can be a source for discipline about each of a companys product lines, its operating locations, and who is leading the various trading operations. The annual report can assign 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 stock value.CustomersCustomers want to work with quality suppliers of goods and services, and an annual report can help a company promote its image with customers by highlighting its embodied mission and summation values. Describing company initiatives designed to improve manufacturing processes, reduce costs, create 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 number of suppliers, and one eva luation criterion is financial strength. They want committed and capable suppliers that are going to be around for the long term.SuppliersA companys abilities to meet its customers requirements will be seriously compromised if it is saddled with inept or undependable suppliers. favored companies today flyingly weed out such companies. By highlighting internal measurements of quality, innovation, and commitment, annual reports can send 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 gain ground cement the business affinity. 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 pay 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 pilot ladder event than for poisoning a local river, whatever its other attributes. Annual reports, then, can be invaluable pricks in burnishing a companys public image. Many annual reports discuss community initiatives undertaken by the company, including community renovation 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 move into a new community. Companies seek warm welcomes in new communities (including tax revenue breaks and other incentives).Communities will woo a company perceived as a good corporate citizen more z ealously than one that is not. The good corporate citizen also will receive less granting immunity from local interest groups. The companys annual report will be one document that all affected parties will pore over in evaluating the business. The way that the company publish it annual report, most listed companies publish their financial avouchments 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 practiced to receive a hard copy, but must specifically request the printed version. Copies are lodged with ASIC and the ASX and are on tap(predicate) for inspection online.Why do these people need the training contained in the annual report? Those people need the information contained in the annual report because the financial accounts provide a wealth of information that is useful to various users of financial information, as summarised belowUserInterest in / Use of bill InformationInvestorsInvestors are concerned about risk and return in relation to their investments. They require information to decide whether they should continue to invest in a business. They also need to be able to survey whether a business will be able to pay dividends, and to measure the performance of the business anxiety overall LendersBanks and other financial institutions who lend money to a business require information that helps them located whether loans and interest will be paid when collect CreditorsSuppliers and patronage creditors require information that helps them understand and respect the short-term liquidity of a business. Is the business able to pay short-term debt when it falls payable?Customers & DebtorsCustomers and trade debtors require information about the ability of the business to survive and prosper. As customers of the companys products, they have a long-term interest in the companys range of prod ucts 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 continuing winningsability of the business. They are crucially interested in information about employment prospects and the maintenance of pension funding and retirement benefits. They are also likely to interested in the pay and benefits obtained by senior managementGovernmentThere are many government agencies and departments that are interested in accounting 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 Competition Commission and the environment Agency) need information to support decisions about takeovers and grants, for example.AnalystsInvestment analysts are an important user group specifically for companies quoted on a stock exchange. They requ ire very comminuted financial and other information in order to analyses the competitive performance of a business and its sector. Much of this is provided by the detailed accounting disclosures that are required by the London Stock Exchange. However, additional accounting information is usually provided to analysts via formal company briefings and interviews. familiar 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 make out is required to prepare a sterilise of accounts that give a true and blank view of its profit or loss for the yearand of its state of affairs at the year end. Woolworths Annual accounts includePerformance SummaryGrowth Plans chairmans ReportManaging Directors ReportThe Results in BriefFood, Liquor and PetrolGeneral MerchandiseHotelsHome ImprovementConsumer ElectronicsDiscontinued OperationsOverheads, Expenses and Balance SheetCapital Management and candidateBoard of DirectorsDirectors Statutory ReportRemuneration ReportAuditors Independence Declaration merged Governance StatementFinancial 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 transactions 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 operatio ns of the company reported on the financial position of that company the business strategies of that company and its prospects for futurefinancial years (unless their inclusion would be immoderately prejudicial) The report by the directors will identify 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 remuneration report that must include a sermon 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, marches benefits and share-based payment arrangements.For the managing directors report of Woolworths reveal that Woolworths pleased to report that we are making hearty progre ss 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 probable 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 attached financial statements are in compliance with International Financial coverage Standards, as stated 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 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.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 increased 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 impacted in recent years by operative price deflation, around the world. On a one off basis, this reduced our aftertax meshing 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 activities for the up-coming year? Business activities for the up-coming yearLeadership in food and liquorAct on Woolworths portfolio to maximize sh areholder valueMaintain track record of building new growthWoolworths expect further earnings growth in FY13, with net profit after tax from continuing operations evaluate 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.proportion analysis can help in measuring business performance and setting objectives/goals. Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firms financial performance in several 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 computation of ratios facilitates the comparison of firms which differ in size. Ratios can be used to compare a firms financial performance with industry 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 flow position may do so by setting targets to reduce average debtors and inventory 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 understandably communicate performance objectives.