Accounting and Finance

Business Report

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 CONTENTS
Introduction..............................................................................................................................3
Continuous Budgeting and Capital structure of the company............................................5
Investment Appraisal tools......................................................................................................7
Corporate governance.............................................................................................................9
Conclusion...............................................................................................................................11
References...............................................................................................................................12

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Introduction

The company Whites Transport Ltd must be considered one of the most famous and
sustained companies. The company has been stable for over 60 years, which is very
incredible for the current day companies in this competitive world. As we could see day by
day there is an abundance of competitors arising. But Whites Transport Ltd has persisted in
its business without any halts in these years. Whites Transport Ltd has remained as a family
and continues to deliver high-standard transport of warehousing, along with good quality,
reliability, and affordable price systems. the three warehousing sites in Kent and
Northampton shire, and more than thirty vehicles, plus articulated curt insiders and flatbeds,
low loaders, and HIABs. Whites Transport Ltd owns the 140,000 SQFT Warehousing, along
with 24/7 coverage available in the company. The company has received many winning
awards and owns 60 years of experience.

The company was established by J. D. White in 1954 in the village of Minster which
is near Ramsgate. The initial step of the company was transporting fresh vegetables to the
markets in Landon and Southeast England. The company has offered customers a high level
of its services. Gradually, as time passes, the company has rapidly grown its reputation and
has owned the seat of the largest operator in a certain area. In addition, currently, also Whites
Transport Ltd provides the same customer services without any lack and finally has gained a
wide amount of success. The company offers all the required and necessary transport and
warehousing solution, that aids in fetching the success of the company.

The updated use of technology has fetched an important level of customer service
in the current competitive and demanding market. The company was functionally very well in
all its circumstances and reached the customers' expectations as well. The company was
tagged that, it delivers a gold standard service. The company has explored many countries
such as Landon, the UK, etc. In the market and supermarkets of the specific companies have
delivered in time and offered customers delivery in highest standards. As the company offers
the best services to the customers, the company has owned much of its growth due to the
valuable feedback received from the customers. The company aims to bring success and keep
remained a trusted company in the sector. The company adapts to take in use of technology
and innovation along with iconic plans based on the customers' requirements, which has led
to occupy the separate and distinct position of Whites Transport Ltd in comparison with the
other companies.
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 Along with the success of the company, there were jerks seen in the company. the
company has gradually started facing a few challenges and issues. The company has faced up
many management issues and has faced in meeting its objectives in its market. Further, it was
depicted that, the company was not preparing the budgeted financial statements, and the
management was facing problems regarding the financial performance analysis. The
company has displayed a few key issues such as the company has failure in controlling its
expenditures, the company was not aware of its accurate progress, and in this case, the
management has lost its expectations in the business. The company entirely failed in
recollecting the profits from the business. The company has seen improper management of
financial resources upsurge the level of complexity in functional activities. Therefore, the
actual growth of the company cannot be determined and predicted, as the company has no
proper management and financial planning leftover. Further study will discuss and provides
the report on the continuous budgeting system along with the challenges faced in the
company while implementing the system. The study also depicts the annual report on the
company's performances and functions and provides specific improvements and suggestions
for certain problems. Therefore, the company must also work on such issues mentioned
above, the business is not only run by only satisficing the customers but also the proper
maintenance of business finance records is also necessary.

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Continuous Budgeting and Capital structure of the company

Budgeting is the primary planning and controlling tool of every organization.

Liquidity or wealthiness of organization can be analysed by its capital structure. White’s
Transportation Limited is currently having equity shares capital under its capital structure and
it only include retained earnings in the form of Profit and Loss account.

The financial position of company and its market size provides that company was
exempting from audit under section 477 of companies act 2006. So, the market size of the
company is small, directors were only preparing budgeted financial statements on annual
basis. The same budgeted documents are considering by company for investment planning
and making any expenditure regarding the performance of the company.

Although the company is earning profit continuously from its transportation services
and declare dividends to shareholders every year. Till now, company’s performance is
measuring with annual budgeted financial statement. Managers were not considering the
changes, risks, new obligations arise during the year in the budgeted statement, however,
these changes have affected the actual current performance of the company. There is need of
Continuous budgeting.

Continuous budgeting involves budgeting for 12 months continuously instead of

getting plans for entire year. Monthly budgets consider the contemporary trends in the
market, risk which may come before company (Borad, 2022). In other words, continuous
budget can be defined as new and revised set of financial plans for the upcoming month or
quarter.

Company was not preparing budgeted financial statements on monthly basis and its
management was facing problems regarding financial performance analysis on continuous
basis. External environment is quite changing, company can notify with the changes in
political, technical, economical, and legal environment through continuous budgeting and can
set new targets for the specified budgeted time (Bragg, 2022). In the absence of continuous
budgeting company is facing issues like:

-Failure in controlling expenditures: Sometimes, new, and innovative technology

introduced in the market, which may affect the working procedures of the company, with old
technology company may earn profit but as compared to market, its productivity and

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potentiality got reduces. In the absence of continuous budgeting, if company adopt modern
technology than it loses control over expenditure.

- Fail in retaining profits from the business: If management considers financial statements
only on annual basis and does not set small targets than sometimes, they fail in earning more
profit even they have enough resources available. Continuous budgeting is making aware
about the slight changes in external market, competitor’s move and actual position in the
market and help business in changing its profit margin from low to high.

- Management has zero expectation from business, they are unaware of actual progress
of the company: Annualized budget put full stop on changing expectation from business,
because staff of the company will work for a single target which was decided by management
on annual basis. Management loses the chance of adopt change, expansion and make the
expectation high. If we review the financial reports of the company (White’s Transport Ltd)
of previous two years, it has been analysed that company did not make new plans and only
manages funds with traditional manner.

- Improper management of financial resources increases complexity in functional

activities: Continuous budgeting helps management in setting new targets to work on. It
helps in managing available financial resources on regular basis. In the absence of continuous
budgeting, complexity in financial resource management may increases. As the White’s
Transportation Limited is small size company but it continuously working for expansion in
the market and increasing its market share.

- Actual growth cannot be determine: Continuous budgeting considers every element of

financial and non-financial resources on regular basis, but currently company is not adopting
the same so management does not have any recent update or change in the overall growth of
the company.

Considering all these issues, it become compulsory for the company to make changes in the
budgeting methods and adopt continuous budgeting. The reason behind adopting this method
includes rolling budgets acquire less time because it involves extension of existing budget, so
some modifications are needed only in existing performance. The budgeting process also
shares better insights, objectives, and responsibility for the employees of the company. It is
also helpful for White Transportation Limited to highlights the present weakness and

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opportunities from the market. Company can easily make plan to cope with weaknesses. And
work along with strength to grab the market opportunities.

When any change has accepted by company it takes sometimes to adopt the same. So,
White’s transportation Limited may face some challenges:

Lack of skilled personal: Though it is a company, but it requires efficient staff who can
handle the continuous budgeting process, implement it on specified cycle and make control
over the management of the company (Dubey, 2022).

Confusion in staff: Continuous changes in management may arise conflict and confusion to
employees and they fail in concentrating their current task and perform their job roles.

Hard to achieve targets: Continuous changes in resource management may increase

complexities and it becomes extremely hard to achieve the present goals and objectives of the
company.

Increase in expenses: Adopting continuous budgeting may be expensive step for the
company. Accounting professional need to involve or present all the time in collecting
information and implementing the change budget cycle to put control over actual
performance.

Thus, the company can face these challenges after adopting continuous budgeting process but
all over this it always up to date with the current changes in the market so that resources can
utilize effectively.

Investment Appraisal tools

To increasing wealth maximisation and meeting the current needs of the business cash inflow
and return at the present period is crucial for the business to grow. The cash inflow is very
prominent solution for overall operational barrier within the business. If the cash inflow is
weak of the company, it shows that company has poor liquidity margin and proposition to
convert the sales into the cash. The big reason behind receiving cash in future due to offering
credit, unusual crisis within the business and poor market strategical framework regarding
collection of cash (Belobo and Pelser (2014). The cash is most important current assets of the
business it is considered as the backbone and fuel to run the business efficiently and
effectively. If the company is failing to generate adequate cashflow within their business,

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they supposed to losing their market strength and leaning themselves toward loss and poor
growth margin. However, in this section the thorough analysis regarding cash inflow
importance in the business is being discussed in reference to white transport ltd.

The major three reason cash at present is important are as follows-

 It increases the time value of money

It has analysed that with the effective flow of the cash within business the value of the
present time money will increases with effectiveness of the future consideration. The cash
inflow margin is required for maintaining the inflation rate and meeting the current market
propaganda. The major effect of the time value of money is that it helps in managing the
current task and strategical framework in association with the project and they can also accept
the offered project if the flow of money is consistently at present value (Rahman 2017).

According to the Rahman (2017) the investment money that received at current pace would
be beneficial rather than receiving money at future date. The main point that evaluated by the
researcher is that future money supply is surrounded with the uncertain challenges and
problem. On the other hand, if the corporate received money at present, they would get
benefit of saving their uncertain deals and manage the current flow of cash within subsequent
project that deliver greater return.

 It enhances the liquidity growth

The cash flow at present also helps in meeting liquidity margin of the company. It not only
supports the business operation but also aligned the planned task on time. With the delay in
the cash flow and supply of money it led to poor strategical advantage and decline the
productivity margin (Noor, et al 2012). The viable availability of the cash helps in attracting
more investors to the business and strengthen the business asset proportion. Henceforth, it is
especially important to receive cash at present and debtor receivable at present because it
supports business to stand for future competitiveness.

According to Noor, et al (2012) liquidity percentage is amazingly effective for business to

exercise effective operational flow. If the cash inflow in very frequently at present it may lead
to sustain the growth percentage and leads the business to meet the future aspect and

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objective of the business. Thus, it can be ascertained that change in the liquidity margin is
highly influenced with the cash supply within the business.

 It attracts higher return to the investors

The one of the crucial aspects of the receiving cash at present would increasing the investors
attention toward the corporation. If the company has been prominent and sustained business
liquidity ratio, then it would help the investor to take steady decision because it ensure that
they would get better and steady return in future. Thus, it can be said that effective present
value of cash would leads to acquire a better deal at present period.

After evaluating the overall reason behind cash inflow in present and time value of money. It
is suggesting to White transport ltd that they should planned and take a project with the
minimum payback period. Because it ensures company that steady pay would scale up the
project as well as business growth. It also shows the efficiency and effective commitment
toward project management and investment appraisal (Belobo and Pelser (2014). Thus, it
assimilates a company should choose the project with the minimum payback competency as
it led to attract higher return and reduce the risk associated with project.

Corporate governance

According to Al-Baidhani, 2014 the audit committee are engaging in the development of the
corporate governance within the business. The strong corporate governance would tend to
enhance the success of the business as well as leads to sustain their position in the stock
exchange margin. The main reason behind appoints an audit committee is to rectify the error
from the accounts, embed internal control and emphasis on the regular financial curriculum
within the business. They are also appointed to review the IFRS reporting standard that mee
the legislation compliance standard as beautifully illustrated subsequent section and
amendment within the business.

The main functions of the audit committee in White transport ltd are as follows-

 Reporting financial compliance standard

According to the annual report of white transport ltd the main function of the audit committee
is to rectify the error within the accounts. They implement necessary notes to account in
relevance to certain article and accounting standard. It engages in evaluating and enhancing

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the transparency of the business. They mend all accounting transaction in reference to IFRS
standard and accounting principle. Thus, these are the subsequent matter of facts that
assessed from the annual report of White transport ltd.

 Witnessing error within accounts

The audit committee and members are involving in instigating the problem associated with
the financial deliverable and mentioned all the drawback regarding the company financial
functions. They altered the accounts as per the requirement and inform manager about the
issues that examine within the firm financial reporting system.

 Suggesting progression and integration advice to the financial statement

Another function of the audit committee is meet the integration and progression of the
business accounting standard based on the arrived changed. The audit committee always
aware with the legal conscience and amendment so that it helps in implementation of latest
preview of the market. They assimilate taxation functions, financial framework as well as
review the account payable and receivable cycle to understand company consistency and
matching principle.

 Limitation in audit committee portfolio in White transport ltd annual report

It has suggested that White transport ltd should develop their annual report in a more
standardised format. They should also prepare a separate section regarding audit committee
review to make public understand more precisely about the company workings.

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Conclusion

The business was primarily built up with financial reports and management merely. In
every organization, the base of the business relays on the budgets, profits, and all its certain
reports merely. All such systems and reports aid us in the future planning of the business.
But, in absence of these shake the entire company and lower the growth of the business as
well. The company has a good reputation for its services and success, but a lack of proper
management fetched major losses in company.

Thus, this assignment has helped me in understanding that every business requires
proper financial performance along with perfect reports. In absence of such requirements
fetches an enormous loss for the company. there ought to be appropriate management plans
also, which aid the company in the correct direction to success. Hence, the business does not
receive success by just only satisfying the customers, but also through other efforts like
budget planning, accurate finance reports, profits, and many other financial positions and
performances that are incredibly significant to the business growth. Corporate governance
views that along with putting efforts into upsurging management and efficiency in the
business, it ought to enhance corporate value and attain sustained development with the help
of business activities and ethical practices. The company must establish a highly transparent
corporate governance system, that aids in fetching the proper ideas and functions in the
business.

Held meetings on the company issues and faced challenges, along with discussions on
the material subjects which gas brought impacts on the company. in addition, planning of the
financial report, proper budget system, etc. subjects need to be discussed. Following up the
Corporate Governance Guidelines provides the basic views, framework, and accurate
guidance to be followed in business planning. There ought to be a proper corporate
governance system of policies, processes, and rules & regulations in the company. It also
defines the relationship between the shareholders and management. Corporate governance
policies need to be enforceable properly and applied reliably to eradicate the ussies raised in
Whites Transport Ltd. The company owns the innovation thesis along with the portfolio
management. But, to bring sustained growth and success in any organization, the financial
report and planning are very mandatory.

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References

 About | White’s Transport Ltd | UK & International Transport. (n.d.). White’s

Transport Ltd. Retrieved September 8, 2022, from
https://www.whitestransport.co.uk/about/
 Al-Baidhani, A.M., 2014. The role of audit committee in corporate governance:
descriptive study. SSRN Electronic Journal, 5(11), pp.250-260.
 Belobo, A.B. and Pelser, F., 2014. Cash flow management: Assessing its impact on
the operational performance of small and medium size enterprises at the Mafikeng
local municipality in South Africa prior to the global financial crisis. Mediterranean
Journal of Social Sciences, 5(27 P1), pp.226-226.
 Borad, S. B. (2022, June 25). Rolling Budgets. eFinanceManagement. Retrieved
September 8, 2022, from https://efinancemanagement.com/budgeting/rolling-budget
 Bragg, S. 2022. Continuous budgeting definition. AccountingTools. Retrieved
September 8, 2022, from https://www.accountingtools.com/articles/what-is-
continuous-budgeting.html
 Dubey, H. 2022. Rolling Budget. EDUCBA. Retrieved September 8, 2022, from
https://www.educba.com/rolling-budget/
 Henttu-Aho, T. 2018. The role of rolling forecasting in budgetary control systems:
reactive and initiative-taking types of planning. SpringerLink. Retrieved September 8,
2022, from https://link.springer.com/article/10.1007/s00187-018-00273-6?
error=cookies_not_supported&code=d08cf163-56c9-490e-9580-1c6be270184b
 Noor, M.I., Nour, A., Musa, S. and Zorqan, S., 2012. The role of cash flow in
explaining the change in company liquidity. Journal of Advanced Social
Research, 2(4), pp.231-243.
 Rahman, M., 2017. Time value of money: A case study on its concepts and its
application in real life problems. International Journal of Research in Finance and
Management, pp.18-23.

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