College of Banking and Financial Studies

Qualification - BTEC Higher National Diploma in Business

Unit Number and Title - Unit 14 Advanced Management Accounting

Assignment Title - Analyze the purpose for developing and presenting financial information

Unit Learning Outcomes:

L.O:1: Analyze the purpose for developing and presenting financial information

Assignment Brief and Guidance:

Task Summary

Job Description
You are the Assistant Accountant of Fast Cars Limited, an automobile manufacturing company based in Sultanate of Oman.Your responsibility is to oversee the management accounting function for Fast Cars Limited and assist Mr. Chris Paul the Finance Manager in drawing up costs and advising on new and existing projects, as required.

Company background

Fast Cars Limited was established in 2003 by automobile engineer, Dr. Robert with 50 employees and 1 factory in Oman. The objective was to engineer and build Oman's first truly home-grown automobile and the result was the launch of ‘Pride' which was completely designed and made in Oman.

The first National Automobile was thus launched in 2003 winning an international patent for its unique design. The demand and acceptance for 'Pride' amazed the country but the production constraints deprived Fast Cars Limited of meeting the escalating demand.

The company developed a low-cost manufacturing and assembly operation that could produce high quality vehicles utilizing the resources and labour force of Oman. Today Fast Cars Limited remains the only national car manufacturer, assembling a full range of vehicles, from Compact Cars and Vans to Luxury SUV's, Buses and Prime Movers.

Fast Cars tied up with a well-known automobile giant in 2010 and began to manufacture SUV to cater to local and international markets. This led the company to compete shoulder to shoulder with other leading global brands

Fast Cars ventured into overseas market by exporting vehicles into most of the neighbouring countries. And further opened the after-sales service centres in Oman and Qatar to cater the demand of the ever-expanding market share.

The automotive industry is also one that relies heavily on supply chains and procurement. Fast Cars Limited relies on third party manufacturers locally and internationally to supply small components like rubber bushings and spark plugs to complicated devices like touchscreen infotainment systems and anti-lock braking systems, and a huge variety of other components.

Business Opportunities.

During the management meeting held on 09th March 2019 the chairman had informed that
• due to the increasing demand the company should look in to the feasibility of setting up two more manufacturing plants in overseas.
• Recruiting of efficient marketing team to cater to each region and recruiting of skilled labour force to work on proposed manufacturing plants.

Mr. Chirs Paul, the Finance Manager requested the management to look in to the recruitment of staff to finance department. But the chairman was reluctant to provide priority to finance team and he further added that ‘finance department and financial information is secondary to the development of Fast Cars Limited'.

Financial Data


 OMR 000

Land & building (NBV)


Cash & cash equivalent


Total sales revenue


Account receivables


Account payable


Cost of goods sold


Closing stock


Tax payable


Administration expenses


Distribution expenses


Interest expenses


Tax expenses


Accrued wages


Bank overdraft


Additional paid in capital


Retain earning as at 01/01/2018


Pre-paid expenses and other current assets


Machinery and equipment (NBV)


Motor vehicles (NBV)


Time deposits


Long term debt


Other accrued expenses payable


Common stock


After the management meeting the Finance Manager approached you and discussed the viewpoint of the chairman about finance department and accounting information. Requested you to help him in constructing a report discussing the critical importance of accounting information to the Fast Cars Limited's various types of stakeholders.


As the Assistant Accountant of Fast Cars Limited, you are required to prepare a report addressing to Financial Manager by,

Critically evaluating the purpose and presentation of financial information from the perspective of different stakeholders of Fast Cars Limited by addressing the reason for the development and appropriate presentation of financial information to support financial planning and decision-making.


Learning Outcomes and Assessment Criteria

Learning Outcome




LO1 Analyse the purpose for developing and presenting financial information

P1 Analyse the purpose and presentation of financial information from the perspective of different stakeholders.


M1 Evaluate how and why financial information should be developed and appropriately presented to support financial planning and decision-making.


D1 Critically evaluate financial information supported by effective and appropriate judgements'.







Are You Looking for Unit 14 Advanced Management Accounting Assignment Help - Higher National Diploma in Business (Level 5)?




Analysis of financial statements is an extremely important task that is undertaken by the financial department of the company including the auditor. The purpose of analyzing the financial statements is to evaluate the past and existing financial data of the organization and according assess the performance of the entity in terms of estimated risks and returns. It reflects major details about the organization's potential to generate revenue, establish certain trends as opposed to the industry, its profitability margins and its strengths and weaknesses.

Financial analysis means carefully assessing the financial statements of the organization and then drawing conclusion there from. It includes the income statement, cash flow statement, balance sheet and notes to the above financial statements. It is also accompanied with the auditor's report that conforms whether the financial statements have been prepared in accordance with the generally accepted auditing standards. The report also concludes on how fairly the financial statements reflect the true position of the company. (Khot, 2016)

Financial statements play an extensive role in providing relevant information to the users of such information. The users are generally termed as the stakeholders of the organization. They are the ones who are likely to get affected by the organization and its activities on the whole whether directly or indirectly. It provides utility for satisfaction of the varied interests of certain parties like the following:

1. INVESTORS: the investors are persons who the owners of the organization. They invest their funds into the company. They cannot participate in the day to day activities of the organization directly. Hence, it becomes imperative for them to be aware of ongoing operations within the organization. The information is thus reported to them through the preparation and presentation of financial statements. The shareholders of Fast cars are interested to know what profits the organization is making and whether its operations are stable enough to survive and commence with its expansion projects. The statements presented above reflect the degree of efficiency and effectiveness of the ongoing processes and thus make relevant decisions about future prospects. (Biery, 2013)

2. SUPPLIERS: the financial report is an important guidance to the lenders as well. Through deep rooted analysis of the business situation and financial performance of the organization, the lenders both current and prospective, become aware of its liquidity and profitability ratios. They come to know about the current payment policy adopted by the organization and its sound financial status. Since the balance sheet of Fats Cars shows an account of creditors, i.e., accounts payables; it is clear the company adopts a policy of credit purchases which is repaid within twelve months. (kumaran, 2015)

3. MANAGEMENT: the management team of any financial entity requires updated information about the operations and relevant requirements of the organization to ensure their duties are discharged with full responsibility and complete specifications. According to the results of the financial position of the entity, the management is able to formulate necessary policies and developments for its betterment and growth. Through the presentation of financial statements, the management is able to work for the organization and its stakeholders in a diligent manner with utmost professionalism undertaken necessary steps for the same.

4. GOVERNMENT: any organization is attracted to pay taxes and certain penalties in case of nay breach to the rules and regulations made to the law presently in enforcement.

5. EMPLOYEES: employees are another important section in the stakeholder group that uses financial information as a safeguard tool for their ongoing employment status and negotiation. Their bonus largely depends upon the quantum of profits the organization is likely to have made. The balance reflects wages payables with a considerable amount. This means that Fast cars have not fully paid their employees with their wages. (Quyen, 2011)

6. SOCIETY: any organization that works for their profit making objective is likely to affect the society and the national economy at large. With the kind of industry Fast cars operates in, it is likely to generate pollution in the form harmful gas emissions and waste products. Thus, environment gets affected if the company fails to undertake sustainable measures for the protection of the society and its local community

The analysis of financial statements is thus important to every stakeholder of the company and adds to their value either directly or indirectly. Though the responsibility of its preparation lie on the shoulders of the management, its authenticity is generally checked by the auditor appointed by the organization.