MODULE PROJECT PROPOSAL

Introduction

In the context of this project proposal, the author shall be looking at the scope,

aims and objectives of the module project in a fast food chain in Nigeria, which for

obvious reasons shall be called X-Treat.

X-Treat is one of the major players in Nigeria’s fast growing fast food industry,

with its core focus on the offshore catering and restaurant management of

outsourced restaurants.

The company from its humble beginnings has now become a household name

particularly in southern Nigeria. The company specializes in local cuisines and has

adopted an adaptive strategy is its field of operations.

While chapter one shall be looking at the accounting function in X-Treat, in the

context of the company’s background, size and other organizational characteristics,

with issues relating to the effectiveness and efficiency of deliverables both in the

accounting and social domain, particularly with an emphasis on the nature and

dynamics of financial and managerial accounting. Chapter two, in the context of

the review of related literature shall be x-raying the practical applications of the

gamut of accounting theories and practices in the analysis of the financial metrics

of X-Treat.

The focus of chapter three is mainly the internal use of accounting information i.e.

management accounting analysis of X-Treat’s operations, with a view to enabling

X-Treat’s management engage in both strategic, tactical and operational planning,

decision making and control. This will be principally viewed from the information

generated by the management and financial accounting system (in use in X-Treat).

Meanwhile, it is important to state that, X-Treat uses both a restaurant management

software and Peachtree accounting software to manage its operations and finances.

Chapter four shall be involved in the review of the financial management strategies

ranging from budgeting decisions, capital allocation methodologies and the general

issues concerning the financial structure of X-Treat and the ways and means of

leveraging on existing strategies so as to improve performance.

Our final chapter shall deal with issues bordering on corporate governance,

corporate social responsibilities, and futuristic permutations in the context of a

SWOT ANALYSIS of X-Treat in the universe of Nigeria’s fast food industry. The

chapter shall be closed with recommendations and conclusions.

Dimensions of Literature Review

A literature review is an evaluative report of information found in the literature

related to your selected area of study. To this end, our module project, shall

involve the author reviewing literature related to the topic of interest particularly

management accounting in relation to financial accounting in the operations of X-

Treat.

Theories and Concepts such as break-even, management accounting, financial

accounting, marginal costing, full costing, financial statements (income statements,

balance sheet, cash flow statement), working capital, capital structure, costs

classification etc

It must be understood that, the aforementioned concepts and theories do not stand

alone, rather the literature review shall be looking at the dynamic relationships that

define these concepts and theories and their applications in the operations and

management of X-Treat.

For instance, management accounting seeks to meet the needs of users while

financial accounting seeks to meet the accounting needs of all the other users

(Atrill, P. & McLaney, E. 2011) of both X-Treat and other parties interested in X-

Treat’s operations and finances. In this dimension, management decision making

revolves around information supplied by the management accounting reports.

Moving further in this direction, the issue of assessing the financial health of X-

Treat shall surely involve understanding concepts relating to solvency, liquidity

and profitability and the computation and interpretations of financial ratios.

Pandey, I.M. (1999) asserts that “ a company should earn profits to survive and

grow over a long period of time”… and that “profit is the difference between

revenues and expenses over time (usually one year). In this context, finance

literature recognizes two major types of profitability: profitability in relation to

sales and profitability in relation to investments (Pandey, I.M). These two related

concepts shall be measured and reviewed in the context of X-Treat’s sales volume

and investments in assets and other areas.

Pandey, I.M. (1999),is of the view that “ in a free market economy, profit is a

guide for allocating resources efficiently”. The cost-volume-profit (CVP) model

assists managers in the determination of profit planning and control. To this end,

the break-even concept (point of no gain no loss) offers alternatives to

management in the mix of costs (fixed and variable), production volume and

feasible profit window in ensuring returns on investments and sales.

However, the income statement needs to be differentiated from the cash flow

statement in the literature. (Atrill, P. & McLaney, E. 2011), maintains that the

purpose of the income statement is to measure and report how much profit (wealth)

the business has generated over time. (Reddy, R.J. 2010) is of the opinion that, “an

income statement shows the business revenue and expenses for a specific period of

time”.

Liquidity as the ability to meet cash obligations as they arise, as a measure of

viability is related to the concept of cash flow and cash flow management .while

cash flow is a statement of cash inflows and cash outflows, the related idea of cash

management, according to Reddy, R.J. (2010) is the management of cash balances

so as to maximize the availability of cash not invested in fixed assets or inventories

and to avoid risk.

Another underlying issue is the concept of costs classification in the analysis of

internal management report. Costs are broadly categorized into fixed costs (when

the costs do not vary with the volume of activity) and variable costs (costs that

vary with the level of activity). In the CVP analysis, the identification and

allocation of costs is helpful in the measurement of financial metrics.

In the literature, costs classification is related to the concept of operational gearing,

a situation where fixed costs are relative higher than variable costs. To this end

therefore, the seeking of a dynamic relationship between both managerial and

financial accounting is a harbinger of good things.

Research Methodology

The research is an ongoing effort aimed at integrating the concepts and theories

learnt so far in the module, as applied to the management and operations of X-

Treat Inc.

In the road to concluding the research, the author believes in the disciplined use of

time, collation of necessary financial statements where available, and the adhering

to a structured time frame for completing all aspects of the module research by the

end of week seven.

References

Atrill, P. & McLaney, E. (2011), Finance and accounting for managers. Laureate

Online Education custom ed. Harlow, UK: Pearson Custom Publishing.

Pandey, I.M. (1999) Financial Management, 8th ed. New Delhi: Vikas Publishing

House Pvt Ltd

Pandey, I.M. (2007) Finance: A Management Guide for Managing Company

Funds and Profits. New Delhi: Prentice –Hall of India