FINANCIAN ANALYSIS AND COMMUUNICATION

Financial Analysis and Communication

Financial Analysis and Communication

Background

Vista Investors is structured as a partnership designed to capitalize on industry research performed by one of the founding entrepreneurs, Michael Douglas. This company is unique because it differs substantially from the way most existing investment management firms originated. Most of the firms created in the last 25 years were started by the departure of portfolio managers from the nation's largest banks, insurance companies, and brokerage firms. Generally, these individuals were deep in investment research talent but novice as it concerns the business and operating side of running an organization. The business plan for Vista Investors is different. Vista Investors is to be created by someone deep in knowledge of all aspects concerning investment management organizations. Investment talent will be acquired and retained by offering key individuals competitive compensation to include equity stakes. Biographies for individuals selected for the management team are enclosed.

Vista Investors believes the goal of U.K. equity portfolios should be to outperform the broad market, as measured by the Wilshire 5000 or Russell 3000. Exposure to economic sectors will roughly approximate those of the benchmark.

The view is that any deviation from the benchmark represents a bet, or in our case, a calculated risk that will determine over or under performance. Portfolios will also maintain market cap exposure to large cap (>£10 billion), mid cap (£2 billion to £10 billion), and small cap (<£2 billion) securities. Like weightings to economic sectors, the weight of the portfolio allocated to large, medium, or small stocks represents a bet relative to the benchmark. On average, our portfolios will hold roughly 2/3 of their value in large cap stocks, and 1/3 of their value in mid and small cap stocks.

Review of Management Accounting

The objectives of Management Accounting are the computation of plans and budgets covering all aspects of the business like production, selling, distribution, research and finance and the systematic allocation of responsibilities for implementation of plans and budgets the organization for providing opportunities and facilities for performing responsibilities, also the analysis of all transactions, financial and physical, to enable effective comparison to be made between the forecasts and actual performance (Dyson, 2004, 58). The presentations of up to date information, at frequent intervals, to management in the form of operating statements, statistical interpretation of such statements in a manner which will be of utmost assistance to management in planning future policy and operation (Ongkrutaraksa, 2006, 62).

Techniques

Financial Accounting

This includes recording of external transactions covering receipts and payments of cash, recording of inventory and sales and recognition of liabilities and setting up of receivables. It also covers preparation of regular financial statements without a property designed accounting system management cannot obtain full control and co-ordination.

Cost Accounting

It acts as a supplement to financial accounting; it is concerned with the application of cost to job, product, process and operation. It plays an important role in assisting the creation of policy and the operation of undertaking (Proctor, 2009, ...