Understanding management accounting and financial management Assignment - 1

Understanding guidance accounting and financial counsel - Assignment ExampleUnderstanding management accounting and financial managementThe specie budget presents the activity of the union over the first 12 months of its operations and assesses how much change it can generate while working in the due course of business. As it is apparent from the higher up computation that in the first month the company has negative cash flow as it is the form _or_ system of government of the company to sale goods on credit and majority of the creditor settles claims after the month of the sales. After the first few months, the cash flow of the company has changed from negative to positive and thus it continues to grow for the next months till December. In order to further increase it cash flows, the company should curtail its variable cost of production and should tell that creditors are approached in order to award the company with discounts. Another method for ensuring that the company has healthy cash flow is that the company should ask the creditors for increasing the settlement period. By doing so, the company would have ample union of cash available and thus it can invest it in the working expectant. Good working capital is essential for better functionality of the business and the company can assess the working capital requirement by looking at its cash budget. For example, since the cash flow is negative in the first two months, the company needs to manage its working capital prudently in these two months so that they can pay the rest of the operations of the year easily. A budget is a financial and a quantitative assertion prepared prior to a defined