← Internal operations of a large business
Financial reports managers actually use (every paper)
Name the report, then the decision it enables.| Report | What it shows | The decision it enables |
|---|---|---|
| Budget | The plan for revenue and costs ahead | Allocate resources; set targets |
| Variance analysis | Actual against budget, and the gap | Investigate and correct the exception |
| Monthly revenue & cost reports | Trends month to month | Catch a rising cost line early |
| Cash flow forecast | Expected cash in and out | Arrange finance before a shortfall bites |
Correcting an unfavourable COST variance: renegotiate with suppliers, cut waste, substitute inputs, improve process efficiency — or revise the budget if the original assumption was simply wrong.
The three-step ladder, applied to financial reports
- Achieved: name the report, and the decision it enables.
- Merit: explain a cause of an unfavourable result and how to correct it.
- Excellence (part c switch-business only): apply a Māori business concept, or justify against two named criteria.
Practice for this standard covers the whole topic — flashcards and quiz.