Abstract
Excel Academy is an Educational Institute provides K-12 Level Education in Qatar. The Academy found high devoted in enhancing the level of education within the region. The computation of financial and non-financial aspect is showing that the company will be having a tough time in the upcoming section of two to three years in the future; however the company can overcome on all of the problems soon with the help of perfect strategies and recommendations mentioned in the assignment.
Introduction
Budgeting is an important and valuable thing that associated with the core economic and financial position of an organization (Kippenberg, Kuiper & Sanders, 1990). The concept of budgeting is highly in use in the field of ‘Finance’ and ‘Investment’, and it should be taken with zeal and critical observations. Budgeting is an alternative name of Planning, in which organizations plan for their future needs and recognition. There are two parts of ‘Budgeting’, known as Budget Deficit and Budget Surplus (Nugus, 1997).
The budget that has the tendency to recognize and reported the revenue higher than the actual budgeted amount, then it will be referred as Budget Surplus, while it will be referred as a Budget Deficit, if the actual amount of the revenue is lower than the budgeted amount. Planning comes at the first quadrant of management, and no entity can make a strong difference in their planning process without having the things in the right manner (Nugus, 2009).
This particular analysis has been divided into two different parts, specifically referred as financial part and non-financial part. It is the analysis of the SWOT of the Excel Academy, along with analysis of the revised budget for this working place. The Academy recently replaced Dr. Khalid from the leadership position and hired Mr. Hazan to help the academy to grow substantially. It is important to cover both of the financial and non-financial part of the report, to make it perfect and highly effective.
Analysis and Findings
As discussed in the introduction, there are two important parts of this assignment that required being complete accordingly in the report.
In Strategic Management, the model that used to assess the level of different elements is known as SWOT Analysis. It usually covered the elements and courses of actions mentioned in the below mentioned diagram (Nugus, 2009)
Strengths
Participation of Highly Qualified Teachers
One of the major strengths highlighted in the case of Excel Academy is having highly qualified teachers within the academy who have the required ability to manage the educational environment in a perfect manner that supports the core realization of the potential of every student.
High Capability of the Teachers
The teachers that hired specifically by the Excel Academy has remarkable capability and compatibility in terms of analyzing and realizing the full potential of the students that can foster them with their intellectual, spiritual, emotional and physical growth. All of these things are extremely helpful for a student to gaining a high percentage of success in the market with complete confidence particularly.
Providing Perfect Learning Environment
Excel Academy is in the favor of providing and educated, powerful and perfect learning environment to their students that develops the key aspects of Cultural, Self Confidence and Intercultural understandings among the students which will be using by them in their core future.
Effective Leadership
The chain of command of the Academy is in the hands of some of the effective leaders and founders Mr. Khalid, which is an effective sign for the Academy in the near future particularly. Leadership is an important aspect that associated with an organization in terms of managing their employees as well as the operations of the company in an organized manner, Excel Academy is very lucky to have intelligent and effective people at the top management team.
Weaknesses
Conflict among the Management
According to the case study, the management of Excel Academy is highly effective and mobilizes in terms of managing their workforce and the entire operations of the Academy, however there is a sign of problems and conflicts found among them. Mr. Khalid, the founder of the Academy had some issues with the other managerial authority of the company. The conflicting is increasing in the Academy, and the company had fired its Leader from the company and hired a new leader for their effectiveness.
Deficit in the Budget
Excel Academy is having problems with their current budget characteristics in which the company has found a pure deficit in their current revenue recognition and expense recognition system which are having different problems for them. This particular problem needs to be decreased accordingly, otherwise it will create definite problem within the core operations of the company.
Opportunities
Increasing Wealth in the Region
Qatar has recently emerged as the wealthiest region of the world, and the power of wealth and financial effectiveness is increasing substantially well for the country, creating effectiveness for them in particular. The increment in the local wealthy citizenship in the Qatar region is increasing the probability of K-12 Education in the region, which will be equally beneficial for the region particularly.
Effective and Wealthy Foundation
The Academy has been founded and invested from the different parts particularly. The people who are investing in the Academy are wealthy people, and they don’t want or need any sort of return from this investment. Their core mantra is to establish school in the region to make the level of education perfect within the city, or the country.
Increasing Tourism
Qatar after getting the Football World Cup hostage of 2022, gaining an immense appreciation in different parts of the world, which is creating effectiveness for the tourism in the country. The level of tourism within the country has been increasing heavily which will be creating number of income and consumption opportunities for them in the future. With this high level and escalating tourism, the level of education would also increase accordingly for the company having effectiveness in the future aspects.
Threats
Increasing Competition
The level of competition is increasing in almost every part of the world, and it is also forcing the Qatar region as well. With the current increment in the economic growth of this country, the level of competition of opening businesses is also increasing, and it will be creating problems for Excel Academy in the future. Therefore, timely action is required to overcome all of the challenges.
Environment is not Educated
The current environment of Qatar is not educated, as almost 90% of the citizens of the country having a Royal Life. Therefore it will be a great challenge for Excel Academy to educate the people regarding the importance of education in their life within the country. It wills require high cost to them.
Budgeting Analysis
This particular part will be looking forward to have a differentiated analysis of the budgeting aspect particularly (Rajasekaran, 2011). This will employ matching different things found in both of the budgeting techniques in particular.
The aforementioned table and graph is showing that there is a clear difference found among the revenue generation capability of Original Budget and Updated Budget particularly. The revenue in the updated budget is decreased by 7.62% in the year 2012-13, and it will have a core difference of 28% and 14.13% in 2014-15 and 2015-16 respectively. The main different among this original and updated budget found due to the changing in the amount of students and teachers
The next important thing found in the budget is the proportion of Expenses to Revenue of the Academy. Generally, it should be on a lower level for the betterment of the company in terms of their financial and strategic structure in particular.
It is clearly seen from this particular analysis that the expense to revenue function of the Excel Academy is 56% in both of the terms, while it shows high proportion in three consecutive years. The updated proportion of expense to revenue function of the Excel Academy in the updated Budget is higher than that of the Original Budget. However the proportion of expense to revenue ratio decreases in the updated budget than the original budget, showing a proportion of 58% as compared to 64% for the Original Budget.
Total material and Equipment proportionate cost with the revenue is comparatively higher in the Updated Budget as compared to the Original Budget that should be requiring some sort of changing in the analysis, otherwise it will create problems for the company in the near future. The proportion of total material cost to revenue in the budgeted year of 2015-16 is higher in the analysis of the Updated budget which is 9%, while it is only 7% in the Original Budgeting Analysis.
Total Balance which have been found in the end of the financial year’s analysis are as follows
It is clear from the analysis that the new updated budget works wonderfully well for the Excel Academy as far as having high balance at the end of the financial year is concerned. From 2012-13 to 2015-16, the updated balance has an incremental figure as compared to the original budget particularly, creating new opportunities and effectiveness for the company in the future. The Balance will be on the highest place in the budgeted year 2015-2016 as compared to the Original Balance.
The Issue with the Budget
The core issue found in the Original Budget is its incompatibility as far as managing the operational cost and expenses of the company. Though, the revenue recognition figure in the Original Budget is comparatively higher than the Updated Budget, but the company is unable to manage the level of expense accordingly. In the updated budget, the amounts of teachers and salaries have been decreased accordingly for the betterment and eradicating this particular issue from the market in an organized and perfect manner. This particular issue should be needed into account by the Excel Academy for their future aspect and effectiveness. There are certain recommendations that can work perfectly for Excel Academy for their future
Recommendations
- Firstly, there is a need of proper monitoring from the company’s complying department regarding the original and updated budget, and any discrepancy should be reported to the higher management.
- The compliance department should be in the direct connection with the financial department regarding any incremental cost that will be encountering by the Academy in the future.
- The amount allocated with renovation and maintenance is very high, which will be incurring every year. The Academy has to make sure that the amount should be on a lower level particularly to have their effectiveness
- Proper Check and Balance is required in the payments
- The Academy has to make sure that there will be no conflict will be arising in the future among the management
Conclusion
Development and effectiveness are some of the major things that associated with an organization, and it can be done by taking timely and effective measures for them. Excel Academy has introduced in this assignment which is having difficulties in their financial and non-financial structure. There are certain problems have been identified in the non-financial structure of the company, along with having difficulties in budgeted section as well. Simultaneously, both of these sections have been completed in an organized and perfect manner. Excel Academy is required to complete the things with proper compliance with adhering with the proposed recommendations for their long run benefits and effectiveness.
References
Kippenberg, H., Kuiper, Y., & Sanders, A. (1990). Concepts of person in religion and thought. Berlin: Monton de Gruyter.
Nugus, S. (1997). Financial planning using spreadsheets. London: Kogan Page.
Nugus, S. (2009). Financial planning using Excel. Amsterdam: CIMA.
Rajasekaran, V. (2011). Corporate Accounting. Pearson.
Rajasekaran, V., & Lalitha, R. (2010). Cost accounting. Delhi: Pearson.
