Shakil Iqbal Patel
Tuesday, 1st November, 2011
2.Roles of Accounting and Finance3
3.1.Discussion of NEXT4
3.2.Finance of NEXT5
3.4.Application of roles to NEXT9
‘Accounting is the process of recording, classifying, and reporting and interpreting the financial data.’ (Johal et al, 2010:2). Accounting provides a key source of information about a business to those who need it, such as managers or owners. The framework makes cash and profit can be monitored, planned and controlled. It is essential to the running of any business or organization. (Jones, 2006:3). ‘Finance exists to help users to make better decisions and is concerned with the financing and investing activities of the business.’ (Eddie et al, 2005:21). This essay will discuss the roles of accounting and finance within an organization and include a financial analysis of NEXT, which through the following structure: the next section identifies the roles of accounting and finance to NEXT. Section three makes some financial analysis, including the discussion of NEXT, evaluation of its finance, and ratio analysis. The fourth section is to examine the application of roles to NEXT. The final section is to make conclusion.
2. Roles of Accounting and Finance
There are three main roles of accounting and finance within an organization. * Financial Accounting: Deals with the mechanistic bookkeeping progress and the preparation and interpretation of the financial accounts. For companies, it also includes the preparation of the annual report. It concludes measuring and reporting financial position, financial performance and anlaysing and interpreting financial statements. (Jones, 2006:13). * Financial Management: It is about managing the sources of finance of an organization which involves ‘managing the working capital (that is, short-term assets and liabilities) of a company or finding the cheapest form of borrowing.’ (Jones, 2006:14) * Management Accounting: Covers the internal accounting of an organization. It consists of costing, budgeting, standard costing, short-term decision making, strategic management accounting, capital investment appraisal and discounted cash flow. (IBID).
3. Financial Analysis
4.1. Discussion of NEXT
NEXT plc is a UK based retailer offering exciting, beautifully designed, excellent quality fashion and accessories for men, women and children together with home products. The company was founded by Joseph Hepworth in Leeds in 1864. The first NEXT shop opened on 12 February 1982. In 1986, Davies moved the headquarters from Leeds to Leicester, to be closer to the main garment manufacturers. In autumn 2009, NEXT plc launched an online catalogue for the United States offering clothing, shoes and accessories. It distributes through three main channels: Next Retail, a chain of more than 500 stores in the UK and Eire; NEXT Directory, a home shopping catalogue and website with nearly 3 million active customers; and NEXT International, with more than 180 stores around the world. NEXT also has a growing website capability in more than 30 countries worldwide. (Next Corporate, 2011).
In UK, there are three analogous brand companies like Top shop, Monsoon, and Aquascutum. They all operate as similar home products as NEXT, like clothing, footwear, and accessories for men, women and children and have online services and various strategies. It is obvious to increase competition to NEXT. While for NEXT, they use their influence to promote good practice and raise awareness, believe working together in partnership is the best way they can make a positive difference. Using approach to improve energy efficiency and reduce energy use, minimize waste produced and increase the quality recycled, increase...