Financial Analysis Of The Qeiicc

Financial Analysis Of The Qeiicc

By (Author)

Name of the Class (Course)

Professor (Tutor)

Name of the School (University)

City

Date

Overview of the QEIICC AccountsThe functions of the QEIICC are spelt out in the statutory instrument 933. They are to provide conferencing and any other related services regarding conference. The main objectives, responsibilities, and goals are set out in a framework document and are issued by the secretary of state. The accounts of the conference are prepared in accruals basis and must be approved by the treasury. The accountants are required to prepare the accounts statement as per the going concern basis.

The chief executive is the accounting officer and has the responsibility to provide a governance statement that highlights internal control system within the conference. The statement shows how the conference centre has achieved its responsibilities and policies that it is mandated to carry out. It must give guidelines on how it will protect and safeguard public resources. The chief executive must give conclusive report pertaining to the financial base of the conference and the report should be timely in every period.

The QEIICC has an audit committee that is made up of three non -executive directors and the chief executive officer who is always in attendance. The main tasks of the committee is to oversee the risk management process within the conference center and are to continuously review the centre of the risk register. The chief executive has to chair monthly meetings where agenda of the meeting are taken by the secretary to the committee. Major reasons for the monthly meetings are to review monthly management accounts presented by the finance officer.

The middle managers or operational manager meet once a month throughout the year to discuss all matters relating to operational activities of the conference. The risk management department has directors and managers whose work is to provide a regular report on the management of risks in their areas of operations and responsibilities. They also give a summary report on key projects the conference centre intends to carry out. The work of the risk management team is cross checked and assessed by the management working group and internal auditors.

There is a system of internal control that is designed to manage risk in areas that are prone to business risk and also to eliminate any failures that can accrue during business operations. Internal control system enables the centre to attain its goals by providing adequate policy guard lines to be followed during risk management. However, the system can only provide reasonable and not absolute risk assurance.

Introduction to the Financial Accounts

The meetings and conference market for many years has remained depressed with clients being cost conscious and this has led to fall in the ratio of rooms hired for conferences. The trend has led to cancelation of many bookings fees that have reached the peak of the year. However, reduced revenue opportunities have prompted a proportionate reduction in cost of doing business.

The major reason for the conference is to promote the business enterprises forward in the ever dynamic environment and also to increase business occupancy to get more revenue. The conference was to address weighty issues relating to business activities in London. The matters include a proportionate drop from reduced government bookings, how significant efficiency savings have been achieved and the viability of the business.

QEIICC Corporate Plan

Since business environment is ever dynamic in the whole world, an inclusive corporate plan will be a major boost to many institutions with elaborate corporate plan. In London during the QEIICC the corporate plan were designed to address various business ideals that include ; how to achieve major savings, to address the challenging times in the business cycles, how to share the dividends paid over the period, to maximize future financial returns and, to restructure fixed cost based in London.

The plan was to tackle strategic goals and objectives to be achieved in the near future. The core corporate plans were to; meet the financial objective of the trading fund order as spelled out in the treasury minutes, maintain the interior of the building brand its services and maximize the revenue generated. Improving services available to customers through continuous upgrading of facilities also was capture in the corporate plan. This was to go hand in hand with improving the standard of services delivered to customers and ensuring that all staff are properly trained, motivated and have the opportunities to develop their skills. Finally maximizing the net surplus from trading activities and property disposal to achieve the best value for the taxpayer and the government was to be capture in the corporate plan.

Revenue Breaks Down

From the revenue breakdown analysis, it can be pointed out that the revenue collected in the financial year of 2012/2013 was relative higher than the previous period of 2011/2012. The following items contributed towards the net increase in the revenue of the QEIICC; room hire, catering commission, other minor income, conference activity and, other rental income. However, there was a slight reduction in revenue from audio visual services and information technology services.

The revenue breakdown shows less improvement in the revenue collected in the current year compared to the previous period and hence stringent measure should be put in place to widen the revenue collection. Nevertheless it should be noted that the revenue collected for the 2012/2013 financial period was below the budgeted one. This can be attributed to the unanticipated reduction in room occupancy during the Olympic Games as several organizations failed to place their orders.

Financial Case Study of the QEIICC

The case study shows that there has been a significant increase in the hotel approximated to be at 70 percent. This was attained through vigorously marketing the conference rooms both internationally and locally. The QEIICC benefited from an extensive booking with the National Organizing Committee from Italy contributing a lot towards it. This enables the projected revenue to exceed the budgeted one hence leading to a net surplus, and the credit for the good work goes to the Centre team members who an aggressively collected marketed the conference.

The summary of performance against targeted shows that payment of two million, two hundred and fifty pounds was made to the exchequer, and that met the financial target. The occupancy level attained that period rose to fifty eight point four percent and was below the targeted one which stood at sixty four percent. It further shows that the accounts were audited and certified by the auditor. The auditor statement reads,” I certify that I have audited the financial statement of the Queen Elizabeth II Conference Centre for the year ended 31 March 2013 under the Government Trading Act 1973”. The auditor opinion shows that the financial statements were prepared according to the accounting standards, principles and practices. Further, the auditor’s opinion shows that all material facts in respect to the expenditure and income recorded in the financial statements have been adhered to and that the statements conform to the authorities that govern income and expenditure.

The statement of financial position of the Conference Centre for the period ended 2012/2013 shows that the total non-current assets sum up to £1,642,000 and the current assets were at £11,867,000, and that leads to a total of £13,509,000 for the value of the assets. The value of property, plant and equipment for the year 2012/2013 was less than those in the year 2011/2012 by a margin of £580,000. Intangible assets also reduced from £7,000 to £2,000 in the same year and that consequently to a reduction in the value of non-current assets compared to the previous period. However, there was an improvement in the value of current assets for the year 2012/2013 compared to the year 2011/2012. This increase in the current asset was attributed to the increase in the value of cash and cash equivalent which increase from £9,127,000 to £10,749,000 for the current period.

The total current liabilities for the year 2012/2013 were less than that of the year 2011/2012 with a margin of £606,000. This was attributed to the reduction in the value of trade and other current payables. There was also a reduction in the value of total non-current liabilities for the period 2012/2013. From this revelation, it is clear that the current assets both in the previous year and current year are higher than the current liabilities in those periods. This means that the conference can meet its current debts efficiently by paying their liabilities off without borrowing money from other external sources. The Conference Centre is safe and cannot be liquidated since it can use the available current assets to offset the current liabilities. The comparison between the non-current assets and non-current liabilities for the two periods indicate that the non-current assets are higher than the values of the non-current liabilities hence the Conference Centre cannot be placed under receivership as it can pay all its debts as they accrue.

The statement of the financial position shows that the total value of non-current assets for the current period is relatively lower than the previous period, and this can be attributed to either depreciation of the current assets or disposal of the current assets. The current assets for the year 2012/2013 is higher than the value of current assets in the year 2011/20112, and this makes the Conference Centre at a better place to settled its immediate debts in the current year and also to purchase equipment with the extra cash at hand.

The Conference Centre, in the current year has reduced their current liabilities compared to the previous year, and this is commendable for the Conference Centre since current liabilities are treated like current expenses, and a reduction in expenses means an improvement in the firm’s profitability. The non-current liabilities for the current period have also decreased in value from £144,000 to £123,000. The whole summary of the financial position of the Conference Centre indicate fine financial progress in managing the available resources.

Comprehensive Net Income Statement

The statement of net income indicates that there is an increase in the revenue collected in the year2012/2013 compared to the year 2011/2012. The revenue base Conference Centre has improved, and this can be attributed to sound investment policies laid down by the management. However, the depreciation and amortization for the current period has increased from £801,000 to £810,000 implying that more assets had depreciated in the current year than the previous year. The overhead costs and expenditure for the current year has gone down. Both the staff cost and other expenditure has relatively reduced, and this increases the operating profits for the conference centre. Reduction in staff cost could have been cost by the introduction of information technology where on few workers may be required to do the job. Retrenchment of staff can also leads to reduction in the staff cost.

Both the operating surplus for the year 2012/2013 and interest receivables have increased, and that has led to increase in the value of operating surplus for the year after interest. The same period show a reduction in the amount of money paid to the exchequer and retained surplus deficit too was reduced. Therefore, the statement shows a positive net income for the year ended 2013 since there was an improvement in the total revenue collected a couple with a reduction in the major in expenses incurred by the Conference Centre.

Statement of the Cash Flows

There is a general increase of cash flow in the year 2012/2013 compared to the year2011/2012. The cash flow generated from operating activities like operating surplus after interest rose from £2454,000 to £3510,000 posting a positive value. In overall, net cash flow from operating activities in the year 2012/2013 was £4,071,000 compared to £3,748,000, and this is a clear indication that more funds came in into the organization. There was also an increase in the value of cash flow from financing activities, for example, payment to the exchequer rose from £1,200,000 to £2,250,000 in the current period.

Statement of Changes in Taxpayers’ Equity

The statement for the period ended 31 March 2013 shows that the compressive net income for the year the balance as at April 2011 was -£1,254,000, and that in March was £9,617,000 indicating sustainable value for the taxpayers’ equity. In summary, the financial statement of QEIICC has shown sound financial accountability and transparency. The fact can be proven by how the accounts are prepared to use the accounting principles and how the management is held accountable for their work.