Accounting Principles and Procedures Flashcards
What type of company is MSC/MSG?
Morgan Sindall Group is a PLC. A plc is a public limited company. This means that shares in the company are publicly traded
What are the contents of PLC accounts?
- Chairmans statement
- Auditors report
- Income statement (profit and loss)
- Statement of financial position (balance sheet)
- Corporate governance report
- Renumeration report
- Other statutory information
Why do we need to understand and interpret company accounts?
- To be able to review your own company accounts
- Assess the financial strength you or a client has
- For assessing competitors
- To set up alone
- Assess the financial strength of subcontractors tendering for projects
What is the difference between a profit and loss account and a balance sheet and a cash flow?
A profit and loss account shows the income and expenditures of a company and the resulting profit and loss. A balance sheet shoes what a company owns (assets) and owes (liabilities) at a given point in time. A cashflow statement refers to all the actual receipts and expenditure to include VAT.
What is a balance sheet?
A balance sheet is what a company owns (assets), what a company owes (liabilities) and stockholders equity at a specific moment in time.
Assets might be cash, property, other investments
Liabilities may be debt, overdraft, borrowings
What is an income statement?
An income statement is a summary of the business’ income and expenditure transactions, typically prepared within a year.
What is a cashflow?
A cashflow statement refers to all the actual receipts and expenditure to include VAT.
What are management accounts?
Management accounts are prepared by businesses for internal use and are not audited.
What is included in a consolidated financial statement?
A consolidated set of accounts comprises of a number of individual subsidiary accounts for a company within a single set of accounts
- Auditors report
- Directors report
- Consolidated income statement
- Consolidated balance sheet
- Consolidated cash flow statement
- Statements of changes in equity
- Notes to financial statements
What is the difference between company and management accounts?
Company accounts have an external focus, they are audited, refer to a snapshot in time, have external users like shareholders, typically summarised
Management accounts have an internal focus, they can be rolling (e.g weekly) for internal employees. They are detailed
Why is it important to assess the financial health of MSC?
Understand the strength of the company in the current market
What is MSG’s financial performance?
MSG have had two standout financial years in 2022 and 2023. The actual YE Net cash for 2023 was £251m – significant growth from £198m in 2022. Total is £2.1bn for 2024 pipeline. We did have £12-13m in defects in 2023. This is all presented to the City by MSG
How do you oversee financial records for the ICCE project?
Ayming originally submitted the spend profile. This included daily rates, labour, overhead, other costs, travel, etc. Then I worked closely with our financial controller. We created a cost code and a timesheet which included daily rates and overheads to calculate the cost spent for the project.
How do you manage the spend profile for the ICCE project?
Originally created by Ayming then managed by myself and our financial controller. This included daily rates, labour, overhead, other costs, travel, etc. Then I worked closely with our financial controller. We created a cost code and a timesheet which included daily rates and overheads to calculate the cost spent for the project. This morphed into a forecast once the project was live.
I updated this by submitting a PCR whilst things changed on the project.
I informed all relevant employees to fill out a timesheet and submit expenses to the cost code.
What is a spend profile?
This is a table on the IFS portal which breaks down major expense categories (labour, subcontracting, materials, capital expenses, travel and subsistence, overheads and other) for each month of your project.
