Accounting and Finance Assignment Sample

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Accounting and Finance Assignment

Introduction

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Breedon Group is one of the leading groups of construction materials in Great Britain and Ireland that focuses on producing cement, asphalt, aggregates, and ready-mixed concrete. They also focus on offering a wide range of contracting services that have a strong asset backing. The strategy of the organisation is to continue growing with the help of organic improvement along with business acquisition in the heavy side construction materials market (Breedongroup.com, 2022). The corporate objective of the company is to ensure that they extract maximum value from all the tonnes of aggregate that they quarry. This takes place with the help of efficient manufacturing and high volume of sale of a wide variety of downstream products and services that are associated. Their objective is to value diversity within the organisation that helps in underpinning all the aspects of the organisation. They work towards providing an inclusive and supportive working environment to their colleagues. They work towards achieving maximisation of their returns at every stage in their operations by working as competitively and efficiently as possible, while respecting their employees, customers, suppliers and local communities.

The key features of the company are that they are committed to live by their values which help them to define who they are and how they behave. They strive to improve their performances and are committed to utilising all of the resources in order to ensure that every stakeholder receives the best out of them. They take their businesses personally and try to live by the principles they follow. They care about their customers, suppliers, communities, shareholders and safety is the top priority.

The aim of the organisation is to manage their people honestly and fairly along with being responsible employers by adopting values and standards which are particularly designed to help guide the staff in their conduct and maintain business relationships. This report will eventually focus on the issues and challenges encountered by the company while implementing a continuous budgeting system along with the usefulness of the capital investment appraisal techniques in making Street choices between investment opportunities. Based on the analysis and data gathered within the report, a proper conclusion and recommendation will be drawn.

Implementing a continuous budgeting system and challenges the company would face in implementing this system: Continuous Budgeting

Continuous budgeting system can be defined as the process in which one more month is being added to the end of a multi-period budget as each month passes by. The concept of continuous budgeting is usually applicable to a plan of 12 month budget which ensures that a full year budget is always in place. Electing the usage of continuous budgeting by the organisation of the Breedon group for a smaller period of time such as three months will have the ability to create a high quality budget that is great and hands in nature (Saleh et al., 2021). There is supposed to be more accuracy of sales forecast over the period of just a few months so that a revision of the budget can be made on the basis of very likely estimates of the activities exhibited by the company.

This approach has the benefit of having someone to constantly attend to the budget model along with revising the assumptions of the budget plan for the last incremental period of budget. The organisation needs to ensure that the continuous budgeting principles are being applied to capital budgeting which will ensure that the funds are being granted for large fixed asset projects anywhere anytime instead of a one-year capital budgeting process. It can be stated that continuous budgeting helps in removing some of the rigidity and provide the company with quicker reactions to the various changing conditions from the typical annual budgets. This results in reducing the amount of year and budget spending which is one of the most common aspects with annual department budgeting (Bodrova et al., 2022). The new budgeting and planning solutions which are available can be helpful in implementation of a continuous budgeting process along with making it much easier to reduce the annual stress of preparing the budget for the entire year.

The government had spent 56% of the development budget that has been allocated despite all the unfavourable economic situation that has been caused by the supply line disruptions and development work which has been majorly affected due to the subsequent fuel crisis. In order to improve the budget implementation, the company could move forward towards a higher growth trajectory by involving and stimulating the economy through various projects of message development. Yet it can be said that the budget implementation continue to remain retarded. one of the major factors that cannot be ignored is the implementation cost of the project has been significantly rising every year due to the lack of proper implementation and effective budgeting plans (Kashkimbayev and Zhakupov, 2021). Even though the policy makers in the development planners are quick to identify these barriers and hurdles during the process of implementing the budget, still have not been able to come up with a proper solution that can be implemented in order to mitigate these challenges. As preparing a budget takes a lot of time and is costly, it involves extra manpower for the purpose of getting the estimates as accurate as possible. Even if the company is using zero-based budgeting technique, the cost, effort and time involved can be considerably large.

Budgeting exercise involves very little flexibility and the budget numbers are considered to be sacrosanct by all the departments. All the entire strategies of the company revolve around the budget plan made by the senior manager, therefore it can be said that any of the external changes in the market environment can create a drastic exchange in the strategy implemented by the Breedon group. One of the major aspects and difficulties faced by the organisation during the implementation of the budgeting plan is that if the organisation or any of the department within the organisation is unable to meet the targets provided according to the budget plan, they would eventually and the blaming the other departments that helps in providing services to wait for not being able to provide the necessary support which would unnecessarily be the reason to raise a conflict within the company (Matsoso et al., 2021). This also results in creating unnecessary tension as the company might be affected internally and it may not be able to run effectively and efficiently.

The allocation of all the expenditures between the different functional departments of the company is generally the responsibility of the senior management. The managers of some departments might have issues in the utilisation of these methods for allocation of the expenses which may end up creating controversies. It is not for the organisation to take into consideration all the suggestions from the various departments regarding the methods of budgeting and allocation of expenses. There is one major limitation faced by the organisation of a Breedon group while implementing a continuous budgeting process. There are times when an experienced manager may deliberately inflate his expenses along with trying to reduce the targets of the revenue to be set in the budget (Heydari et al., 2018). This is one of the ways in which we can easily get an opportunity to get the favourable variances against the numbers that have been budgeted which results in increasing the lower cost than the budget cost along with helping the organisation in achieving higher revenue than the budgeted revenue. This might eventually mislead the stakeholders and discourage the employees.

The usefulness of capital investment appraisal techniques in making a choice between investment opportunities: Investment tools

The financial evaluation or financial appraisal for Breedon Construction Company for a construction program is one of the most significant and initial phases of the construction operation planning method. The objective of a financial evaluation or financial appraisal for the Breedon Construction Company is to deduce whether a program is beneficial or not, correlating its expenses to its anticipated advantages. It is a crucial characteristic in agreeing on whether to continue with a construction operation and any general project. In expansion, it is furthermore a fundamental characteristic in selecting between alternative construction operations. Financial appraisal or evaluation is not merely about the sufficiency of budgets or funds, but moreover about the economic viability of the accomplishment, ultimately calculating whether and when the program will repay earnings (Hsiao and Kelly, 2018).

First, the employees of Breedon Construction Company must be knowledgeable with the components of a construction program, construction expenses, and all-around expenses and advantages to comprehend the expenditures to assess when administering a financial appraisal of a construction project in the Breedon Construction Company. Then, some financial valuation techniques should be inaugurated, with intensity on net present value, one of the vast commonly utilized standards for project judgment formulating and selection. The objective of the financial appraisal in this Breedon Construction Company is to ascertain that the recovery will outperform the approximate construction expense of the program. After ascertaining hypotheses about the utility and advantages of the asset, this protocol enables a conclusion of the investment capital or reserves compelled for the construction of the project in Breedon Construction Company (Hamel et al.,2021).

Investment appraisal evaluation procedures of Breedon Construction Company comprise payback duration, interior rate of return, net present value, accounting ratio of retrieval, and index of profitability. They are primarily utilized to assess the achievement of recent projects in Breedon Construction Company. Before commencing any modern program, the first issue that appears to our psyche is it reasonable or efficient? These methods answer this issue well. Each method assesses programs from several standpoints and furnishes several understandings. Investment evaluation or investment appraisal is significant to the employees in Breedon Construction Company because it is an aspect of important analysis and as such, it is prepared to indicate dealers whether a commodity or corporation has long-term capacity founded on the profitability of its prospect programs and undertakings (Bateman and Mace, 2020). There is furthermore a tremendous hazard that revenue, expenses, and money ebb may be jeopardized if the construction corporations pertained to are in the Breedon Construction Company long-term enterprise programs. Here's the administrator's requirement to contemplate before putting up with a stance in the Breedon Construction Company stock.

Investing is a crucial fraction of assembling a construction company of Breedon Construction Company's new assets such as machinery can increase their productivity, curtail expenses and provide them with an active benefit. Investments in product development of Breedon Construction Company, aptitude, and new demands can open up fascinating growth alternatives. At the same time, the employees of Breedon Construction Company desire to resist overexposure to limited financial reserves or to maintain other choices. Agreeing on where to subsidize is a significant part of knowing the enormous capability. This guide accentuates crucial economic and non-financial components to contemplate when deeming an investment in Breedon Construction Company. It furthermore opinions investment appraisal employment (Burritt et al.,2019).

Investment appraisal or evaluation of Breedon Construction Company is at the essence of option examination and industry case improvement. This is where we examine the expenses of putting up with a particular lesson of litigation and the advantages of accomplishing so. It is a demanding but concerning business that expects the aptitude and rational abilities of the people pertained to. Expenses and advantages have this in widespread, they are either substantial or supernatural, they transpire or celebrate instantly, so should be classified accordingly. Utilizing one or more of these strategies will provide judges and senior administrators in Breedon Construction Company a decent awareness of the financial significance of each alternative in the industry case and whether it is worth seeking. Investment appraisal is repeatedly the absolute level in cobbling together an industry prosecution. Some may contemplate it as additional complexity than cost-benefit analysis, but it enables deducing the best choice based on financial advantages. The subsequent phases should be conducted before an investment appraisal of Breedon Construction Company. Several alternatives require to be inferred. The production of their gap examination will furnish feedback on this.

At this juncture, Breedon Construction Company should be operating on finalizing the industry case. It is crucial to recollect for a construction company like them that not every industry litigation encompasses all company calculation methods. The quantity and behaviour of the project will deduce which tools or procedures they will utilize to create the business lawsuit (Dudin et al.,2018). Once they have their business prosecution, fulfil it to the senior management squad for authorization. Once an alternative is ratified, they can commence constructing regulations for the approved modification or improvement program in Breedon Construction Company.

Whether the board of your chosen company met these two requirements, and make recommendations for improvements in the process: Corporate Governance

Breedon Construction meets the requirement of offering appropriate time to the non-executive directors for meeting the board’s responsibilities

The board of Breedon Construction is highly responsible for the success of the organisation inlong term.The Non-executive directorsof the company offer various strategic guidance to its group of Executive Directors (Breedon, 2022). Moreover, they monitor the performances of the Executive directors and the organisational management.

The UK-based organisations need to obey the Corporate Governance codes and offer sufficient time to the Non-Executive Directions of the companies to effectively carry out their responsibilities. The Non-Executive Directors are required as the Board members of a company as they have broader perspectives due to their various experiences and enhanced personal qualities (IOT, 2018, pp.17-58). Breedon Construction offers its Non-Executive Directors to focus mainly on the matters of the Board, without thinking about the executive administrations. This gives them the scope to independently and impartially do the decision-making process of the company. However, the company, Breedon Construction, need to offer sufficient time to its Non-executive Directors to carry out its several duties and responsibilities that are illustrated below.

Performance monitoring:The Non-executive directors need to monitor the performances of the executive management to efficiently meet the organisational goals. They also possess the power to appoint or dismiss any executive directors from the company.

Directing strategies:Being the outsiders, the Non-executive directors can help from the impacts of the external factors that can affect both the work process and work environment of the company.

Networking: Another important responsibility of the Non-executive directors is to establish a good networking system of the outside contacts with the company’s internal management, for the growth of the company.

Remuneration: The Non-executive directors set the remuneration of the executive directors and other workforce of the organisation, Breedon Construction.

Audit:All Board members including the Non-executive directors need to take care of the audit that is the cash flow of the company (Bencomo, 2021).

Breedon Construction meets the requirement of skills, knowledge and experience by the board and committee members

The Board members of Breedon Construction include a group of independent Non-executive Directors along with a group of Executive Directors. They work and conferences together as the unitary board that takes care of the workplace values and cultures. Alongside this, they decide the operations of the management by implementing the suitable leadership style for the efficient work process in the business. The committee members include the other internal stakeholders of the company. Both the Board of Directors and the committee members prominently display the values of the work environment along with their knowledge and skills through their handling of the management (Breedon, 2022).

The knowledge and skilfulness of the board and the committee members also get reflected by their decision-making processes for the operations and growth of the company.To be precise, the requirements of the UK’s Corporate Governance regarding the knowledge, skills and experiences of the Board members and committee members,can be understood by knowing the duties performed by them, which are stated below.

  • The committee members need to agree with the Board members on the remuneration policies of the non-executive directors and executive directors of the company, to get the shareholders’ approval.
  • They need to set the remunerations of the high-officials of the management group as well.
  • They review and offers incentives to the individual workforce from their experiences, depending on the workforces’ organisational performances and achievements.
  • The committee members can also review the time of the Non-Executive Directors from their experiences and knowledge so that these directors get sufficient time to complete perform their duties and responsibilities.
  • The Board and committee members together discuss and decide the candidates suitable as the Executive Directors and Non-Executive Directors for Breedon Construction from their skills, previous experiences and knowledge(Breedon, 2022).
  • They together work to review the performances of the organisations and presents an AnnualReport on the business at the end of the financial year.

These functions of the Board and the Committee members show that the company, Breedon Construction, comprises enough capable members who can efficiently utilise their skills, knowledge and experiences for the company’s development. Thus, the company fulfils the UK’s Corporate Governance codes.

Recommendations for improvement

Recommendation 1- Good governance in the organisation:

The Board of Breedon Construction needs to maintain a balance between its conformances like regulations, legislation along with the works of the board such as decision-making and enhancing the organisational operations. The Board need to clearly understand their duties which differ from other sectors of the management. Knowing the appropriate roles of governance will build up a positive relationship between the management and the Board of Breedon Construction.

Recommendation 2- Creating and maintaining accurate governance infrastructure:

The Board of Breedon Construction needs to have good policies to effectively look after the operations of the organisation and its workplace environment. The members of the board need to efficiently create and maintain delegation policies to differentiate between the responsibilities of the Boards and the management.

Conclusion

The completion of this assignment is done by me through a number of steps. At first, I carefully learnt about my assignment title. The reading of the assignment brief provided me with the clarity to plan and organise my steps for successfully completing this assignment with relevant pieces of information. The first activity undertaken by me to do my assignment is to find the relevant resources regarding the subject matter of this assignment, that is, about the accounting and finance of the leading UK-based company, Breedon Construction. I have done ample research using the internet, to retrieve the relevant information regarding this topic. Secondly, I pointed down those important points and keywords related and essential for my topic. At this step, alongside, noting down the important information, I have also done my planning to organise those data to write up my assignment and give it a compact look, full of significant information. Finally, I have constructed this assignment according to my plan of positioning the points to give it a proper and complete look. Even I made it sure to use authentic web pages and journals and stated them as Harvard referencing and in-texting to show the authenticity in my writing of the assignment.

While doing the research and collecting the relevant information about Breedon Construction, it offered me a great scope to effectively learn and understand the financial position of the company in the UK and also in the global marketplace. Moreover, it also provided me with the opportunity to know about the working process of this organisation with the details of the company’s meeting the UK’s Corporate Guidance codes. Being a student of business school, a few recommendations are also stated by me in the last part of this assignment for the company, Breedon Construction, to efficiently meet the requirements of the Corporate Guidance codes.

References

Bencomo, R.Q. (2021) The Role of Independent Non-Executive Directors in Resolving Corporate Governance Disputes: A Framework of Conciliation for Effectively Addressing Controversies Within Shareholders, Stakeholders and the Board of Directors?. Trento Student Law Review3(1), pp.17-58.

Breedongroup.com, (2022).About Breedon Aggregates | Breedon Group. [online] Breedongroup.com. Available at: <https://www.breedongroup.com/about-us> [Accessed 07 March 2022].

Saleh, Z., Isa, C.R. and Hasan, H.A., (2021). 7 Implementation of Outcomes-Based Budgeting System in the Malaysian Government.Public Sector Reform and Performance Management in Emerging Economies: Outcomes-Based Approaches in Practice, 155.

Bodrova, T.V., Morozova, N.B., Andreeva, L.V., Kryatova, L.A. and Darinskaya, V.V., (2022). Forecasted Budgeting Capabilities for Continuous Consumer Business Cooperation. In ?ooperation and Sustainable Development (pp. 273-278). Springer, Cham.

Kashkimbayev, S.B. and Zhakupov, A.N., (2021). Effective budgeting as a priority of the company› s development.?????????: ????????? ? ????????, 16(2), pp.46-53.

Matsoso, M.L., Nyathi, M. and Nakpodia, F.A., (2021). An assessment of budgeting and budgetary controls among small and medium-sized enterprises: evidence from a developing economy. Journal of Accounting in Emerging Economies.

Heydari, A., Amiri, M. and Jamour, H., (2018). The role of internal organizational factors in implementing the budgeting system based on performance: an interpretative structural modeling approach (case: Tehran Municipality). Journal of Urban Economics and Management, 6(24), pp.117-133.

Breedon (2022)Division of Responsibility. Available at: https://www.breedongroup.com/division-of-responsibility [Accessed: 05March 2022]

Breedon (2022)Directors.Available at: https://www.breedongroup.com/investors/directors [Accessed: 05 March 2022]

Bateman, I.J. and Mace, G.M., 2020. The natural capital framework for sustainably efficient and equitable decision-making.Nature Sustainability, 3(10), pp.776-783.

Burritt, R.L., Herzig, C., Schaltegger, S. and Viere, T., 2019. Diffusion of environmental management accounting for cleaner production: Evidence from some case studies. Journal of Cleaner Production, 224, pp.479-491.

Dudin, M.N., Lyasnikov, N.V., Reshetov, K.Y., Smirnova, O.O. and Vysotskaya, N.V., 2018.Economic profit as an indicator of food retailing enterprises' performance.

Hamel, P., Guerry, A.D., Polasky, S., Han, B., Douglass, J.A., Hamann, M., Janke, B., Kuiper, J.J., Levrel, H., Liu, H. and Lonsdorf, E., 2021. Mapping the benefits of nature in cities with the InVEST software.Npj Urban Sustainability, 1(1), pp.1-9.

Hsiao, P.C.K. and Kelly, M., 2018. Investment considerations and impressions of integrated reporting: Evidence from Taiwan. Sustainability Accounting, Management and Policy Journal.

IOT (2018) What is the role of the Non-Executive Director? Available at: https://www.iod.com/services/information-and-advice/resources-and-factsheets/details/What-is-the-role-of-the-NonExecutive-Director[Accessed: 05 Marcg 2022]

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