Optimizing Nashville Consulting Group: Principles for Proper Accounting - Essay Sample

Paper Type:  Essay
Pages:  7
Wordcount:  1831 Words
Date:  2023-02-07


I will rely on several principles to ensure that Nashville Consulting Group sets up operates optimally and is sustainable. The first aspect that I will consider to set up and manage the company successfully will be to ensure proper accounting (Drucker, 2018). Through proper accounting, I will organize and summarize the financial records of the Nashville Consulting Group. The organization and summary will help me to trace the cash flow, to set up an accountable business, and to realize transparency in the business. I will, therefore, need to incorporate two accounting aspects in the operation of the business to ensure that its accounts are in order. First, I will ensure that Nashville Consulting Group has proper bookkeeping. This will mean that I record and summarize its financial information for easy communication of financial position. This will entail summarizing the expenses, including sales and purchases, and presenting the data in financial statements. I will then apply these statements to make decisions on the operations of the business (Drucker, 2018). Using managerial accounting principles, I will present, I will plan and control its operations.

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In addition to setting up the accounting aspect, I will establish Nashville Consulting Group's financial structures. I will set up tools that capture Nashville's income, how the income is managed, and cash flow. These tools will also capture its investments and liabilities, as well as the elements that make up its financial system (Drucker, 2018). When setting up and operating Nashville Consulting Group, I will be aware that it operates in a competitive industry. Therefore, I will ensure that I am constantly aware of market price trends for the services offered by the business. Through proper services pricing, I will ensure that the services are attractive to the target customers. I will constantly follow business-related elements such as bank interest rates, inflation rates, and the performance of commercial marketing to ensure that the decisions I make for the company are relevant. Further, I will ensure that Nashville's assets, liabilities, revenues, taxes, and debt are captured in a manner that enables easy engagement with financial partners (Drucker, 2018).

The third thing that I will do for Nashville Consulting Group is to clarify the processes that lead to its service production, the supply chain and the point at which the client consumes the service (Drucker, 2018). They are two critical aspects of economics which I will incorporate in Nashville Consulting Group to ensure that it provides competitive services. First, I will outline the performance of businesses operating in the same industry as Nashville at the global level. Using this information, I will predict how scalable and profitable Nashville is likely to be if it expands, and the potential risks that the various factors would have in its expansion. Using this information, also, I will explore broader issues such as the growth of production, the rate of inflation and government deficits, unemployment, exports and imports and how they are likely to affect the performance of the business in the long term (Drucker, 2018). Secondly, I will outline how various factors compete at the domestic level to sustain the business that Nashville will be running. The elements that I will be interested in will include workers, households, business premises, individual companies. I will explore what is likely to happen when I make certain choices or alter the factors of service production based on these factors.

Corporate Consulting and Coaching

I will ensure that Nashville Consulting Group, as a modern business, adopts an approach to service delivery which promotes value co-creation. This approach, I will realize by ensuring that clients play a central role in the decisions that solve their problems. I will ensure that Nashville Consulting Group adopts two approaches in its service delivery. Foremost, I will ensure that it offers corporate consulting. Nashville will provide professional assistance to clients, and help them solve problems that arise, realize value addition, and minimize loss while expanding growth as entities. Since this approach to service delivery will be useful for improving the overall performance of the business, I will ensure that Nashville Consulting Group develops expertise and applies the expertise to execute client assignments by first studying the client's business strategy (Block, 2011). After such study, Nashville will consider the structure and management of client organizations to identify a range of options that the client can consider to effectively and efficiently achieve various positive objectives and desired results.

The second approach to service delivery that I will ensure Nashville Consulting Group offers is coaching. I will ensure that Nashville structures its regular engagements and conversations with clients. In so doing, I will ensure that the broader goal of these continuous interactions is to empower clients, not only for short-term success but also to enhance the chances of survival of the client businesses. Hence, I will ensure that Nashville Consulting Group empowers its clients to be more aware of their business environments and to develop the right sets of attitudes and behaviors to achieve the objectives that grow the scope of the client business and that of Nashville (Block, 2011). Further, I will orient all the employees of Nashville with the view that they internalize the right attitudes, which influence them to be adaptable to the dynamics, improve their efficiency. I will also build internal capacity building structures that aim to improve the competence of Nashville's staff.

Balance Sheet, P&L, Statement of Cash Flows, and Ratios

In setting up and running the Nashville Consulting Group, I will incorporate several accounting tools. The first of these tools will be the balance sheet. I will use the balance sheet to capture Nashville's assets, liabilities, and shareholder equity. Using this tool, I will be able to compute Nashville Consulting Group's rate of returns and evaluate its capital structure. Further, I will employ this tool to summarize what Nashville owns, what it owns, and the amount invested (Drucker, 2018). This information will be important to clarify Nashville's ownership. Besides capturing the company ownership details, it will equally be important to determine the company's profitability to help in the decision- making. For this purpose, I will apply additional financial statements besides the balance sheet. I will apply the statement of cash flow, and the income statement to calculate relevant financial ratios, which will help to assess Nashville's profitability.

The first important profitability ratio that I will calculate for Nashville will be its working capital. This ratio will help me to determine Nashville's capacity to meet its financial obligations, especially when there are debts incurred in its running. So, using this ratio, I will be able to understand Nashville's financial position better. I will also use the capital ratio anytime a decision is needed on finance sourcing for the management of Nashville. Another financial ratio that I will calculate from Nashville's balance sheet will be the current ratio. This ratio will help me to determine the relationship between Nashville's current assets and current liabilities. Knowing this relationship will help me to monitor the balance on Nashville's capital structure on a continuous basis and to determine if Nashville is profitable.

Besides knowing how much of Nashville's capital structure is derived from debt, I will need to have a summary of Nashville's expenses, costs, and revenue for each financial year. This information will make up the profit and loss (P&L) statement for Nashville. The records that I will capture in Nashville's P&L statement will reflect its capacity to become more profitable by studying indicating whether there is revenue increase or a cost reduction, or whether the two occur simultaneously within the year that Nashville will have operated. I will ensure that Nashville publishes these financial statements each fiscal year to communicate its financial position to shareholders and other relevant entities. The P&L statement will be meaningful to Nashville when considered over a long period. Therefore, I will ensure that Nashville publishes its P&L statement each financial year and use them to review its progress in relation to the investment that will be made.

I will derive several ratios from Nashville's income statement to study its profitability continuously. I will calculate the gross margin to determine how much of Nashville's sales revenue, after the deduction of direct costs used for the production of services result. I will also determine Nashville's profit margin. Calculating Nashville's profit per sale after the deduction of all the expenses will help visualize Nashville's growth over time. The calculation of the operating margin will help to capture how Nashville's operating income performance in relation to its net sales. Further, in calculating Nashville's earnings per share, I will determine the relationship between its dividends and the average outstanding shares each year. This information will be useful to determine if the company's value appreciates over time.

Using the statement of cash flow, I will summarize the amount of cash and the cash equivalents that correspond to Nashville's cash inflows and outflows (Drucker, 2018). I will use the resulting values to measure if Nashville successfully manages its cash position. From this value, I will be able to determine whether Nashville has the potential to meet its debt obligations. The statement of cash flow will also serve to complement Nashville's income statement and balance sheet. I will use the statement of cash flow to calculate Nashville's free cash flow, which will help to determine the amount of cash left after Nashville has paid its capital expenditure.

Financing From Savings and Small Business Loans and Risks

For the initial capital to set up Nashville Consulting Group, I will set aside a portion of my current income and flow of resources over a given period. My savings will be in the form of bank deposits and increased cash holding. Having a healthy balance in my savings account will help to establish a stable consulting business from the outset. Therefore, I will need to address certain issues to ensure that this mode of financing becomes successful. First, I will prepare a rough estimate of the amount needed to set up the business. This information will capture the amounts that I will need to purchase assets that I will need for the business. Secondly, I will determine how much of the business I intend to finance from my pocket. The advantage of this approach for the business will be that; it will enable me to effectively communicate to potential lenders that I am personally assuming some risk, and that I am committed to the success of the business. I will then ensure that at least a quarter of Nashville's capital structure is derived from my personal investment. This approach will help to solidify my equity position in the business.

There will be risks associated with this capital financing approach. First, there will be a risk of savings not being enough. For instance, Nashville may operate for a while before realizing any profitable service delivery. However, it will need to continue operating and hope to build itself with time. If the savings are minimal, Nashville's operations will be ham...

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Optimizing Nashville Consulting Group: Principles for Proper Accounting - Essay Sample. (2023, Feb 07). Retrieved from https://midtermguru.com/essays/optimizing-nashville-consulting-group-principles-for-proper-accounting-essay-sample

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