Prepare a written assignment to address the following objectives : 1. Explain through a real world example of how accounting and budgeting information can contribute to, and support , effective...

Accounting and Finance
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ACCOUNTING AND FINANCE
Accounting and Finance
Name
Institution
Executive Summary
Accounting and Finance makes up the most critical departments in various business entities. Different companies incorporate accounting principles in establishing and developing strategic decisions for development of their institutions. The following report highlights benefits and weaknesses of the use of accounting and budgeting in strategic planning. It also outlines advantages and disadvantages of financial leverage and issuing of bonds by different companies. An analysis of a publicity listed financial institution by the report further outlines uses of financial statements in regards to company transactions.
Table of Contents
2Executive Summary
4Introduction
4Contributions and Support of Accounting and Budgeting
4Better Planning and Forecasting Mechanisms
5Useful for Performance Appraisal
5Providing useful Communication Channels
6Essential in Writing a Business Plan
6Benefits of Using Financial Leverage
6High Yield on Returns
7Sustainable Operation Profits
7Operation under High Risks
8Weakness of Using Financial Leverage
8Increased Company Liabilities
8Maintenance of Shareholder Control
9Periodic Payment of Interest
10Bankruptcy of Corporation
10Cash Flow Statements
10Description
11Financial Statement Analysis on a Publicity Listed Company
11Conclusion
11Recommendations
13References
Accounting and Finance
Introduction
Accounting and Budgeting refers to the entire process of developing and passing information on financial trends within a specific business entity to its subsequent users. It involves the use of financial and accounting statements, which show inflows, and outflow s of economic resources in regards to different institutional transactions. The use of accounting and budgeting in management of business entities has more benefits than disadvantages. Through accountancy, business owners are able to keep track of cash flow projections in relation to its activities. Other benefits attached to accounting and budgeting include proper planning and forecasting, enhanced performance appraisal mechanisms, clear-cut communication systems among others. Through accounting and budgeting, cash flow statements are often made available for company analysis and publicity (Tracy, 2008, p. 26).
Contributions and Support of Accounting and Budgeting
Better Planning and Forecasting Mechanisms
Accounting and Budgeting, forms a crucial part in the development of effective strategic decisions. These include all decisions made within business corporations geared towards producing efficient and sustainable products. Through accounting and budgeting, business entities are able to identify and develop better planning and forecasting mechanisms. Provision of financial statements on company operations enables managers to project feasible plans for their operations. Statements of financial records provide asset values of different business entities. This is useful in calculating the net worth of companies needed for future expansion and planning. Through budgeting, mangers are capable of classifying company needs and transactions according to their priority. Use of budgeting in management thus enables managers to avoid unnecessary and uncalculated risks (Tracy, 2008, p. 26). A real world example includes the use of financial statements by JP Morgan Chase & Co. in strategic development. This mechanism enabled the Chase Company to incur more income amidst a financial crisis (Vardi, 2012, p. 26).
Useful for Performance Appraisal
Use of accounting and budgeting in company management helps in providing useful platform in evaluation and appraisal of previous performance. Availability of an efficient performance appraisal mechanism helps managers identify loopholes within company operations (Tracy, 2008, p. 26). Through accounting and budgeting, managers are able to establish highly calculated risks geared towards improving the financial position of the company. Use of highly calculated risks makes up some of the effective strategic decisions companies often have to make. Availability of financial records on the other hand enables efficient performance evaluation needed for future projection of risky transactions (Tracy, 2008, p.26). Using financial statements, the Coca Cola Company was able to conduct a conclusive company evaluation geared towards restructuring the beverage company strategy (“Company Evaluations: The Coca-Cola Company,” 2003, pp. 221-223).
Providing useful Communication Channels
Use of accounting and budgeting records is essential for company planning and communication. Through financial statements, different heads of departments are able to use a united voice in supporting certain strategies. Accounting records is often used in providing evidence over previous transactions. Use of written records consequently improves professionalism in handling strategic management of company transactions. Efficient communication between mangers
ought about through accounting and budgeting usually develops coherent systems of decision-making. This is usually beneficial in strategic planning since it lowers emergence of opposition amongst certain employees (Tracy, 2008, p. 26). Using accounting and budgeting records, the Coca Cola Company was able to provide efficient...