Accounting and Finance for the Decision Making of Kingfisher Group

In this report “Accounting and Finance for the Decision Making of Kingfisher Group” we discuss, Kingfisher is a public limited company that acts as a British multinational retailing company headquartered in London. As a public company, the retail operations are followed to build valuable progress and manage the business core processes. It is an international home improvement company with over 2000 stores supported by a team of over 78,000 colleagues.

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Report’s purpose: Accounting and Finance for the Decision Making of Kingfisher Group

The main purpose of the report is to build the entire analysis of COVID-19 on the performance of the business and address the familiar activities. Due to the large intensive growth and building the higher positions, organizational performance has a vital impact. The evaluation of the financial analysis of the Kingfisher PLC helps to investigate the key financial resources.

Analysis and discussion:

From the calculation of the payback period, NPV, and the accounting rate or return are the reliable operations that addressed the business positions through the specific era of the business processes. Kingfisher PLC is a British company that has a -75,784 Net Present Value to accomplish the organizational responses. The difference between the present value of cash outflows and the cash inflows throughout time helps to boost budgeting or investment resources through capital planning for analyzing the overall project investment.

Suggestions:

Kingfisher PLC should take loans from the banks, build the angel investment, and use the venture capital sources to improve the overall investment as initiating the business operations. Choosing stocks over bonds, investing the small-cap companies, investing the low-fee funds, and diversifying the portfolio, the current strategies will be addressed towards the strategic positioning.

Proposed investment’s motivation:

Purpose:

Real problem:

The pandemic of COVID-19 has affected the businesses and economy dramatically. The board of directors of the Kingfisher company is currently considering the diversification of the business risk and plans to make the key investments that would help the business to grow in the long-term planning.

Importance:

As the chief financial officer, I analyzed that it is necessary to resolve the problem because increasing the financial performance of the company helps to raise the organizational growth and boost the business practices towards the cleared and valuable changes.

Kingfisher PLC can maintain strong financial performance by leading the business plans and managing the greater planning in the board activities.

Process:

Problem being caused:

By seeing or analyzing the fluctuation of the cash flows over the years, the entire problem of impacting the business position to the reliable strengths is affected.

It is one of the core activities that address the business responses and lead the stable repositions of the business. In this pandemic situation, the evaluation of the organizational strong capabilities is important for making effective decisions.

Casual drivers of problem change:

The evaluation of changes in the political situation, fluctuations in the economy, and social phenomena are the proceed terms that are the causal drivers of the business roles through the addressing era of the business success regarding the greater and the valuable forms in the future.

Proposition:

Capabilities enable necessary changes in drivers:

With the change of trends, the entire demands of the consumers related to the improvement of the homes become change. It is the capability that relates to the social, technological, and cultural drivers to implement the new practices in the boundary of the business.

Certain practices can be addressed to take the vital era of the business process as doing the higher proceeded actions.

Conduct the investment appraisal:

Payback Period:

Year	Initial investment	Net cash flow from each year.	Payback Period.
1	850,000	120,100	7
2	850000	450,200	2
3	850000	92,100	9
4	850000	115,400	7
5	850000	265,000	3

Accounting Rate of Returns

Years.	Net income (2022).	Proposed or initial investment.	ARR
1	843	120,100	0.01
2	843	450,200	0.00
3	843	92,100	0.01
4	843	115,400	0.01
5	843	265,000	0.00

Net Present Values:

Year	Investment.	Annual cash flows.	Total cash flows.	11%	PV.
0	–                    850,000		–                    850,000		–                    850,000
1		120,100			108,198.20
2		450,200			365,392.42
3		92,100			67,342.73
4		115,400			76,017.55
5		265,000			157,264.60
NPV					–                      75,784

Comments:

The Net Present Value of the Kingfisher PLC is negative in the value so, there is a properly addressed situation introduced to obtain the core strategy of the business process and maintain the cleared changes.

To build the organizational practices and manage the higher plans, the business roles can be addressed toward the change. The company should develop the proper investment proposal that helps to increase the business operations and manage the operational plans.

The evaluation of the data and managing the greater responses, the business functional are addressed. At Kingfisher PLC, the decisions of investment are critical for the growth as well as the overall profitability that impacts the cash flows.

The business has a long-term impact on the particular decisions and taking the irrecoverable interactions. To create the proper planning and managing the greater response, the business roles are added.

The investment serves as a major boost to the financial success of the business, generating growth, innovation, and long-term stability. Building the organizational changes and taking the cleared changes, the organizational values will be addressed in the particular situation.

There are almost 9 years required for the Kingfisher to retain the investment and recover the capital budgeting. It has been a long time that taken by the company addressed the possible solutions and observed the entire discipline areas.

The overall time required to retain the investment or capital is the time of the payback period in finance. In other words, it is the period at the end of which a machine facility or other investments have produced sufficient net revenue to recover the costs of investments.

To determine how the calculation of the payback period in the practice simplifies dividing the initial cash outlay of certain projects by the amount of cash inflow that the project generates each year. Kingfisher PLC has a simple payback period that has several numbers of years as saving money after the renovation will cover the investments.

Kingfisher PLC takes almost 9 years as the amount of time between the date of investment as well as the break-even point that has been reached. The current operations of the business can be addressed by the operating techniques in the business forms.

By redefining the threshold activities and producing a project that is equal to the associated costs, The business performances become reliable in the valuable activities. The net present value of Kingfisher company maintains the cleared strategic performances by investigating the yearly cash flows.

Factors affecting the potential investment in new machinery:

SWOT analysis:

Strengths: Good image of the brand among the potential customers.Favorable home improvement certainties and the public consciousness.	Weaknesses: Unfavorable financial situation of the firm.Hesitant public to move out of the post-COVID restrictions.
Opportunities:The evaluation of the scope of expansion by providing the range of related services.Community home improvement services that attract more customers in the global market.	Threats: The risk of increased competition from the new entrants.Fluctuation in the bank rates due to inflation can affect the cost of capital.

PESTEL analysis:

Here are some factors that affect the investment decisions of the Kingfisher PLC affecting the organizational planning and proceeding the valuable changes as necessary for the business success.

• P: The government’s policies, stability of the political parties, and the rate of corruption are the key political factors that affect the financial performance and investment decisions of the Kingfisher PLC. The company should propose the investment plan by following the key governed rules and regulations.
• E: The evaluation of economic growth rates and the disposal income through the activity as leading the organizational plans. Kingfisher company’s investment decisions are impacted by the disposal income gained by the people through the particular era of success.
• S: The evaluation of population growth rate, career attitudes, and the safety emphasis are the certain forces that impact the organizational directions and maintain clear processes in the future. The investment decisions of the Kingfisher PLC are impacted by the change in demographic trends.
• T: Kingfisher should proceed with the decisions of investment by using the advanced incentivized technology. Using effective technological tools and awareness of Research and Development, the organizational current activities become addressed in greater and the reliable positions.
• E: The evaluation of weather, climate, and environmental policies are the key economic forces that affect the business performance towards the valuable scenarios of the business. The investment decisions of the Kingfisher based on environmental protection affected the organizational responses and proceeded the particular change sat the given era of success.
• L: The evaluation of discrimination laws, anti-trust laws, and the copyright and patent laws the current activities of the business are addressed through the sustainable roles. Health and safety laws are the key legal policies that affect organizational interactions in business responses.

Risk and return and its potential impact on the financial performance:

Conduct the sensitivity analysis for the risk:

For the conduction of the sensitivity analysis of the Kingfisher PLC company, the entire value of the initial investment, cash flow operations, and the proceeded resources are admitted to ensure business consistency.

Establishing the scenario of cases with certain values for each variable and defining the ranges or levels for each variable help to raise the cleared operations of the business. Calculating each net present value for the combination of variable values, the entire magnitude can be observed.

Giving the additional information and managing the best opportunities, the organizational instant planning becomes valuable. The net present value of the business has the most significant impact on the net present value as requires the most attention in terms of uncertainty and the proceeded financial operations.

Using Excel and specialized financial modeling, the business strengths become applicable to the greater processes in the future.

Impact on the position and financial performance of the company:

In finance, both risk and return are fundamental principles that are used to evaluate the key opportunities and weaknesses of the business.

The payback period instantly shows that the Kingfisher required different years to recover the investment and build the; proper capital budgeting. By investigating the large plans and boosting the organizational directions, the business responses can be addressed.

Different risks faced by the business in which the risk of finance, economic changes, and the proceeded investment risks exist.

For managing the competitive positioning and the stakeholder mapping, the entire performance of the business can be addressed. It is one of the core areas that affect the business roles and takes a clear understanding.

Financial performance and stakeholder confidence both are integral eras that represent the business’s change of the key fluctuations and organize the stable applications. Kingfisher company should proceed the business planning by using the advanced areas of success and managing the greater decisions.

Foreign exchange risk and dividend policy:

Kingfisher company’s activities are affected by the change of currency as the key risk of the business. The company has an irregular dividend policy where dividends are paid based on specific events or performance milestones.

There is a one-time special dividend which is typically paid when the firm has excess cash or the profits from extraordinary events like asset sales exist.