Discuss about the Concept of Conceptual Framework in an Organization.
This report has been prepared to analyze the concept of conceptual framework in an organization. This report depicts the user about the importance of accounting theory concepts in an organization. It has been evaluated in this report that how a conceptual framework helps an organization to manage the accounting and monetary figures and also help the organization to make a better decision about the operations of the company and all the financial matters. It has been analyzed through this study that how conceptual framework helps an organization to meet its goals. For conducting this study, JB HI FI has been taken into consideration. Further, it has been analyzed that how the operations and business functioning of the company get affected due to conceptual framework.
The main business functioning of JB HI FI is in the music industry. Company is operating its business from several decades. This company has been originated in 1974 by Mr. John Barbuto. This firm has begun with its first store in Victoria at East Keilor. This organization has listed on the ASX (Australian stock exchange) itself and currently, it is in the top list in the industry in terms of market share and revenue. It offers its clients a huge range of games, music, DVD movies, music and TV shows. Currently, this company has made many changes into its strategies and financial policies to enhance the operations and for business growth (JB HI FI, 2017).
Conceptual framework is a framework which has been set by IASB and FASB to manage the financial and accounting reporting of an organization. Conceptual frameworks are basically a theory which assists the professionals to prepare the accounting reports. Conceptual framework always deals with many issues related to fundamental financial reporting (IASB, 2006). Firstly, the concept of conceptual framework has been taken into 1970. Basically, this concept has taken place with a mutual concern of IASB and FASB. The main objective of conceptual framework was establishing the understanding of final financial reports among the internal and external stakeholders of the company (ISAB Framework, 2001). This framework guides the accountant to prepare the final financial report.
JB HI FI is in the top companies in the market of Australia. It has been found through this study that JB HI FI’s annual report has been prepared and presented according to the conceptual framework of IASB and FASB (FASB, 2007). It has been found that entire details of conceptual framework have been considered by the professionals while preparing the final financial reports of the company (IFRS, 2008). The framework has enhanced the effectiveness of the financial statements of the company. Financial statement of the company is as follows:
|
JB HI FI LTD (JBH) INCOME STATEMENT |
|
|
Fiscal year ends in June. AUD in millions except per share data. |
2016-06 |
|
Revenue |
3954 |
|
Cost of revenue |
3089 |
|
Gross profit |
865 |
|
Operating expenses |
|
|
Sales, General and administrative |
1006 |
|
Other operating expenses |
-361 |
|
Total operating expenses |
644 |
|
Operating income |
221 |
|
Interest Expense |
4 |
|
Other income (expense) |
1 |
|
Income before income taxes |
218 |
|
Provision for income taxes |
66 |
|
Minority interest |
|
|
Other income |
|
|
Net income from continuing operations |
152 |
|
Other |
|
|
Net income |
152 |
|
Net income available to common shareholders |
152 |
|
Earnings per share |
|
|
Basic |
1.51 |
|
Diluted |
1.5 |
|
Weighted average shares outstanding |
|
|
Basic |
100 |
|
Diluted |
101 |
|
EBITDA |
263 |
|
JB HI FI LTD (JBH) BALANCE SHEET |
|
|
Fiscal year ends in June. AUD in millions except per share data. |
2016-06 |
|
Assets |
|
|
Current assets |
|
|
Cash |
|
|
Cash and cash equivalents |
52 |
|
Total cash |
52 |
|
Receivables |
98 |
|
Inventories |
546 |
|
Prepaid expenses |
|
|
Other current assets |
6 |
|
Total current assets |
703 |
|
Non-current assets |
|
|
Property, plant and equipment |
|
|
Other properties |
419 |
|
Property and equipment, at cost |
419 |
|
Accumulated Depreciation |
-236 |
|
Property, plant and equipment, net |
184 |
|
Equity and other investments |
|
|
Goodwill |
37 |
|
Intangible assets |
49 |
|
Deferred income taxes |
21 |
|
Total non-current assets |
290 |
|
Total assets |
992 |
|
Liabilities and stockholders’ equity |
|
|
Liabilities |
|
|
Current liabilities |
|
|
Accounts payable |
302 |
|
Deferred income taxes |
11 |
|
Deferred revenues |
|
|
Other current liabilities |
134 |
|
Total current liabilities |
447 |
|
Non-current liabilities |
|
|
Long-term debt |
110 |
|
Other long-term liabilities |
31 |
|
Total non-current liabilities |
141 |
|
Total liabilities |
588 |
|
Stockholders’ equity |
|
|
Common stock |
49 |
|
Retained earnings |
328 |
|
Accumulated other comprehensive income |
27 |
|
Total stockholders’ equity |
405 |
|
Total liabilities and stockholders’ equity |
992 |
|
JB HI FI LTD (JBH) Statement of CASH FLOW |
|
|
Fiscal year ends in June. AUD in millions except per share data. |
2016-06 |
|
Cash Flows From Operating Activities |
|
|
Other non-cash items |
185 |
|
Net cash provided by operating activities |
185 |
|
Cash Flows From Investing Activities |
|
|
Investments in property, plant, and equipment |
-52 |
|
Property, plant, and equipment reductions |
0 |
|
Acquisitions, net |
|
|
Net cash used for investing activities |
-52 |
|
Cash Flows From Financing Activities |
|
|
Long-term debt issued |
|
|
Long-term debt repayment |
-30 |
|
Common stock issued |
6 |
|
Repurchases of treasury stock |
-13 |
|
Cash dividends paid |
-93 |
|
Other financing activities |
0 |
|
Net cash provided by (used for) financing activities |
-131 |
|
Effect of exchange rate changes |
0 |
|
Net change in cash |
3 |
|
Cash at beginning of period |
49 |
|
Cash at end of period |
52 |
|
Free Cash Flow |
|
|
Operating cash flow |
185 |
|
Capital expenditure |
-52 |
|
Free cash flow |
133 |
|
Supplemental schedule of cash flow data |
|
|
Cash paid for income taxes |
-66 |
|
Cash paid for interest |
-4 |
(Bloomberg, 2017)
It has been analyzed through study over these reports, it has been found that the effectiveness of the final financial report of the company has been enhanced. Company has followed every guideline of conceptual framework to attempt the best presentation and preparation of final financial reports (IASB, 2006 and IASB 2007 b). These reports depict the best information about the company’s performance to every user. It has enhanced the understanding of every user about the financial figures of the company. Company has followed all the conditions of IASB and FASB and prepared the reports accordingly. (Jones and Wolnizer, 2003).
The depreciation technique, format of income statement, format of balance sheet, cash flow statement format etc has been prepared by the company itself to manage the financial figures of the company (ICAEW, 2006). It has been found that the reports of the company are now depicting a performance of the company due to the better utilization of the factors and figures of the accounting and financial terms.
It has been found that due to the conceptual framework, the performance of the company has been enhanced and due to a good performance in terms of revenue, profits and return to the shareholders, investment in the company has been enhanced and the goodwill of the company has been enhanced (Deloitte, 2008). Further, customers are also able to understand the final reports of the company and they are also making the decisions according to their capability to either remain the loyal customer or switch the brand (Jones, 2006).
Analysis over many articles and book, it has been found that these companies are supposed to make the reports according to the conceptual framework as the main motto of conceptual framework is to make it easier for the internal and external users to understand the final reports and make decision accordingly (Brigham and Ehrhardntt, 2013). It has been analyzed through this reports that conceptual frameworks are quite crucial for an organization to enhance its performance and make it more effectual to survive in the market. Through the help of these conceptual frameworks, company has managed to enhance its performance. Further, many other related aspects have also been studied and it has been found that these are the best policies which must be followed by the company to get a better outcome in terms of the profitability and growth of the company.
It has been analyzed through conducting a study over the conceptual framework guidelines of JB HI FI that the performance of the company has been enhanced and due to a good performance in terms of revenue, profits and return to the shareholders, investment in the company has been enhanced and the goodwill of the company has been enhanced. Further, customers are also able to understand the final reports of the company and they are also making the decisions according to their capability to either remain the loyal customer or switch the brand (kim, 2011). Further, many other related aspects have also been studied and it has been found that these are the best policies which must be followed by the company to get a better outcome in terms of the profitability and growth of the company (Evangelinos, Nikolaou and Leal Filho, 2015).
Through an analysis over this report, it has been recommended to the user to implement the policies of conceptual framework to enhance the profitability and goodwill of the company. This report has been depicted about the importance of accounting theory concepts in JB HI FI. It has been evaluated in this report that a conceptual framework has helped the JB HI FI to manage the accounting and monetary figures and also help the organization to make a better decision about the operations of the company and all the financial matters. It has been analyzed through this study that company has managed to meet its goals due to conceptual framework. Further it has been analyzed that company has enjoyed the profitability due to conceptual framework guidelines.
It is a study that is performed by the organizations to manage entire internal and external factors related to the performance of the company. SWOT analysis assists the company to administer the strategy and policy in a better manner. It is also helpful for the company to implement some changes into existing strategies and policies to improve the growth and performance of the company.
A SWOT Analysis study provides a pervasive imminent into the history of the company, business structure, financial structure, operations, corporate strategy and company’s management. This report includes a SWOT analysis on the services and products of the company and on the financial information. SWOT analysis of the company is as follows:
Strength puts for the uniqueness of the operation of the company which offers significance to the company. Strength of the company is as follows:
Weakness puts for the uniqueness of the operation of the company which offers cons to the company. Weakness of the company is as follows:
Opportunity puts for the elements of the operation of the company which offers utilization of significance to the company. Opportunity of the company is as follows:
Threats puts for the uniqueness of the operation of the company which offers trouble to the company. Threat of the company is as follows:
Brand positioning is a kind of activity which is referred to the target customers to make an image into their mind about the brand positioning of the company. It is quite common that every brand activity have a normal goal and aim which is directed, guided and delivered by the reasons and benefits of the brand to purchase and it also focuses over entire points which have a contact with the clients (Hollensen, 2015).
Brand positioning could be defined as an activity of making a brand which provides in such a manner that a distinctive place is occupied and a value could be created in customer’s mind. It has been analyzed through conducting a research over the JB HI FI that this company has positioned its brand image through its logo and its tag line. More, the logo of the company is recognized by every client and it creates a value for the JB HI FI
References:
Blommberg. 2017. JB HI FI. Retrieved as on 18 June 2017 https://www.bloomberg.com/quote/JBH:LN
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice. Cengage Learning.
Decision, vol. 39, no. 3, pp. 205-217.
Deloitte. 2008. Summary of International Accounting Standards. Available from: https://www.iasplus.com/standard/ias16.htm (Accessed 2 September 2008).
Doyle, P., & Stern, P. 2006. Marketing management and strategy. Pearson Education.
Elmuti, D. & Kathawala, Y. 2010“An overview of strategic alliances”. Management
Evangelinos, K., Nikolaou, I., and Leal Filho, W., 2015. The Effects of Climate Change Policy on the Business Community: A Corporate Environmental Accounting Perspective. Corporate Social Responsibility and Environmental Management, 22(5), 257-270.
FASB. 2007. FASB Statements of Financial Accounting Concepts. Chichester: John Wiley & Sons
Glasson, J., Therivel, R., and Chadwick, A., 2013. Introduction to environmental impact assessment. Routledge.
Hollensen, S. 2015. Marketing management: A relationship approach. Pearson Education.
IASB. 2006. Summary of International Accounting Standards. International Accounting Standard Boards. Retrieved 20 January 2007 fromhttps://www.iasb.org/Home.htm
IASB. 2007 b. Fair Value Measurement. Part 2: SFA’s 157 Fair Value Measurements: Comments to be submitted. London: IASB
ICAEW. 2006. Measurement in Financial Reporting. London: Institute of Chartered Accountants in England and Wales
IFRS. 2008. International Financial Reporting Standards. London: IASB
ISAB Framework. 2001. Framework for the preparation and presentation of Financial Statements. International Standards Accounting Board
JB HI FI. 2017. Annual Reports and Financial Statements 2016. Retrieved as on 18 June 2017 file:///C:/Users/lenovo/Downloads/12501june07_725425761_jbhifireport.pdf
JB HI FI. 2017. Home. Retrieved as on 14 August 2017 https://www.jbhifi.com/
Jones, M. 2006. Financial Accounting. Chichester: John Wiley & Sons
Jones, S., and Wolnizer, P. W., 2003. Harmonization and the conceptual framework: an international perspective. Abacus, 39(3), 375-387.
Kim, Y., 2011. The contribution of social network sites to exposure to political difference: The relationships among SNSs, online political messaging, and exposure to cross-cutting perspectives. Computers in Human Behavior, 27(2), 971-977
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download