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Management accounting undergraduate Background (words 2500) You were recently employed as a management accountant in a listed firm on the ASX (freedom oil gas). The Managing Director of your company...

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Management accounting undergraduate
Background (words 2500)
You were recently employed as a management accountant in a listed firm on the ASX (freedom oil gas). The Managing Director of your company has formed a small taskforce to explore the possibility of implementing a Balanced Score Card (BSC) system in the company. You are assigned to work with others in the taskforce due to your management accounting background.
Required
You are required to prepare a report to provide advice on the suitability of the BSC for an ASX listed company (freedom oil gas).,..
The report must cover the following key points:
a) A description of your company.
b) Calculation of Return on Investment (using net profit divided by total assets) and a discussion of the ways to improve ROI.
c) A description of the Balanced Scorecard (BSC) and its key components.
d) A description of the ways the implementation of the BSC can improve the competitive advantage(s) of your company.
e) A discussion and conclusion of the overall suitability of BSC to your selected company..
Assignment Structure The report should include the following components:
• Assignment cover page clearly stating your name and student number (Use Holmes Template)
• An executive summary and table of contents (note executive summary must be before the table of contents)
• A
ief Introduction or overview of what the report is about.
• Body of the report with sections to answer the above issues and with appropriate section headings
• Conclusion
• List of References based on the Harvard referencing style
• Appendix including your supporting material
NOT - The report should be grounded on relevant academic literature and all references must be properly cited and included in the reference list
Answered Same Day Jun 03, 2021

Solution

Harshit answered on Jun 05 2021
146 Votes
MANAGEMENT ACCOUNTING
EXECUTIVE SUMMARY
The project report prepared is about the Balanced Scorecard. In this report, an analysis has been done on the Freedom Oil & Gas Company, a company that is listed on the Australian Stock exchange (ASX). In this report a discussion is made on various components of Balanced Scorecard, Calculation of ROI of the Freedom Oil and Gas company, and various factors on which ROI depends and how to improve it. Being a Management Accountant of Freedom Oil & Gas company, an analysis has been done with a task force formed by the Board of Directors to explore the possibilities of implementing the Balanced Scorecard in the company.
Table of Content
    Serial Numbe
    Contents
    Page Numbe
    1.
    Introduction
    
    2.
    Calculation of ROI of the Company
    
    3.
    Balanced Scorecard & its components
    
    4.
    Ways by which implementing BSC help gain a competitive advantage
    
    5.
    Overall suitability of BSC in the company
    
    6.
    Conclusion
    
    7.
    
    
Introduction to the project report
This report is about Balanced Scorecard a performance measurement tool which includes the following topics covered:
1. Introduction of the company – Freedom Oil & Gas.
2. Calculation of Return on Investment of the Company.
3. Balanced Scorecard Introduction and its Components.
4. Ways by which implementing Balanced Scorecard to have competitive advantage
5. Overall Suitability of Balanced Scorecard to the company.
6. Conclusion
7.
INTRODUCTION
Freedom Oil & Gas company having its headquarters in Houston, Texas has established an acreage position in the oil-rich portion of Eagle Ford shale in South Texas, in Dimmit Country. It was established in 2007. The mission of the company is to build a growth-oriented, Investment grade oil and Gas company. The goal is to build a profitable growth-oriented oil and gas production company with a portfolio of quality assets. The company is listed on the Australian Stock Exchange (ASX) under the ticker symbol ("FDM").
The Objectives of the Company are to earn strong revenues at a lower cost of development and achieving the economies at a larger scale. The leadership team of the Company includes Russell Porter as the Executive Chairman and Chief Executive Officer, Mark Mabile as the Vice President, Operations, and Stephen W.Mullican as the Vice President, Engineering. The company follows a strong Code of Conduct to achieve strong excellence in work. The management seeks to build a strong trust among the investors to increase the shareholder value by following strict guidelines. Safety is the foremost priority at Freedom Oil and Gas Company and so it takes all the necessary measures to communicate and train all the employees of the risks present, encourage reporting of near-miss, investigate risks and take co
ective actions. Along with that company also seeks to ensure the safety of the environment in which it operates.
Thus, the management of the Freedom Oil and Gas Company aims that achieving financial objectives considering all the non-financial perspectives and helping the company to achieve its long-term objectives and goals.
CALCULATION OF RETURN ON INVESTMENT (ROI) OF THE COMPANY
Return on Investment is a financial ratio that is used to calculate the benefits an investor will receive about their investment cost. The formula for ROI is:
Return on Investment (ROI) = Net Profit/Income
Total assets of the company
This ratio is very simple and easy to calculate. It can be easily understood by anyone and can help them in the decision-making process. But one of the limitations of this ratio is that it does not take into consideration the factor of time.
The ROI of the Freedom Oil & Gas Company based on the Annual Report of the Company as on 31st December 2018 is as follows:
Total Assets of the company = 1,00,960
(in $’000)
Net income of the company = 1,543
(in $’000)
Therefore, The Return on Investment = 1,543 /1,00,960 = 0.01528
This indicates that the Return on Investment of Freedom Oil & gas company is 1.528% (approx.). By adopting various steps, the company can improve its ROI and build trust and confidence among the shareholders.
The two parameters involved in calculating ROI is Net profits and total assets. For the ROI of the company to increase we need to increase the net profits which can be achieved by either reducing costs or increasing the revenues (Amado, C.A., Santos, S.P. and Marques, P.M., 2012). Therefore, the various ways of Increasing the ROI of the company are as follows:
1. Reducing the costs: The general and administrative expenses of the company can be reduced by making use of the available resources effectively. If the cost gets reduced, the savings can be used in other different areas which will help the company to earn more return on investments.
2.Increasing revenues: This requires ways by which the company can market and sell its product and capture a larger share of the market. If the revenue from operations are increases and the cost is reduced, both occu
ing simultaneously, it can help
ing more return on investments.
3. Knowing and studying Customer needs: This helps in knowing what the customers want and how can the company help in...
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