Managing Finance - Research Proposal Example

Managing Finance Managing Finance Company Profile Wal-Mart is the leading American multinational retailing and merchandising company. It operates more than 5,200 stores across the globe and ranks 1st among all the retailing companies (Anon., 2014). The present report aims to highlight financial and management accounting aspects of the company. Budgeting Process and ProceduresThe budgeting process and procedures of the Wal-Mart are focused lower business cost of capital for the company. It is because the volatile in the retailing market is relatively high.

The budgets of the company are developed using Real Option Techniques, NPV and IRR for forecasting its decisions. it mainly emphasizes on the projecting the demands (De-Almeida & William, 2014). Therefore, Wal-Mart mainly use of the flexible and static budgeting process and procedures. It is dependent on the forecasted demands that are based on the past sales and projections of the new products, season, consumer behavior and perception for developing budgeting processes. Management Accounting SystemThe management accounting system of Wal-Mart have been constantly changed and upgraded according to the advancement in the information technology and business environment.

Currently, the company emphasizes on Just In Time, Inventory management and Economic Quantity Order techniques used in its management accounting system (Anon., 2014). However, these management accounting systems of the company has been amended with the passage of time. Wal-mart is focused on the low costing strategies. Hence, the adoption and changes in the management accounting systems of the company has been taken place time to time. The determinant to prevailing changes in the management accounting system is dependent on the external factors that the company aims to anticipate.

Costing ProcessThe costing processes of Wal-Mart are very well maintained and are done by professional auditors all over the globe. The practices carried out in the factories are analyzed and are further characterized so that better check and balance can be made. The requirement standards of Wal-Mart, Labor policies, the payroll of the workforce, the rules and regulations provided by the Law are being followed within the factory or not? And the health and safety conditions are the essential of the “Audit Reviews”.

After the examination of the practices of the factories Wal-Mart takes the decision to work with the factories or not (Bandy, 2013). Capital Decision MakingThe Wal-Mart is working in three major businesses. The priority of the organization is to improve the financial organization; this is due to the drastic changes in the financial sector. The Organization is providing the finance internally and also through some external sources. The policy that the organization is following is to improve and strengthen the “Return on Invested Capital” that will help make the organization appealing to the “Portfolio Managers”.

The external expansion relates to the “Industrial Loan” they are obtaining that will help in minimizing the costs. The use of Debit and Credit cards by the customers will help the organization to pay itself in the future (Harris & Mongiello, 2006). Evaluation of the CriteriaThe company is considered to be a giant in the market. The current situation illustrates that the company is backed by Equity financing largely, the proportion of the debt financing lies in 65:35 ratio respectively. The company gathers the Equity by selling the Common Stocks to the public and the executives as well.

List of ReferencesAnon., 2014. Annual Report: Wal-Mart. New York: Wal-Mart.Bandy, G., 2013. Financial Management and Accounting in the Public Sector. New York: Routledge.De-Almeida, J.R. & William, E., 2014. Access to finance, working capital management and company value: Evidences from Brazilian companies listed on BM&FBOVESPA. Journal of Business Research, 67(5), pp.924-34.Harris, P.J. & Mongiello, M., 2006. Accounting and Financial Management: Developments in the International Hospitality Industry.

New York: Routledg.