Ikea - Welcome Inside
Executive MBA City College/Sheffield University
Financial Reporting and Management Accounting EMBA 105
Course-work: Financial Reporting and Management Accounting – IKEA Welcome inside
Mr. I. Pasmatzis
Paul V Grech Cohort 19, Romania April 2012
IKEA
Executive Summary Accounting is divided into two distinct systems, financial accounting and management accounting. Both systems have been used to evaluate the accounting situation in IKEA. For comparison, the analysis for another two companies, Walmart and Stanley Furniture Company Inc. was also carried out. IKEA appears to be in good shape financially and improving. The long-term strategies employed by the company appear to be towards making the company more financially stable, self-reliant and sustainable.
IKEA – Welcome inside Financial Reporting & Management Accounting. (EMBA 105)
i
Table of Contents Executive Summary Table of Figure 1. Introduction 2. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i iii 1 1 2 2 2 3 3 3 4 5 6 18 20 23 24 27 29
2.1 Financial Accounting
2.2 Management Accounting . 3. Financial Statements/Reporting 3.1 Balance Sheet . 3.2 Income Statement . . . . . . . . .
3.3 Cash Flow Statement 4. Financial Analysis 5. IKEA . . . . . . .
5.1 Financial Analysis
5.2 Management Accounting . 6. Discussion 7. Conclusion 8. References . . . . . . . . . . .
Appendix A – Ratios used for financial analysis Appendix B – Data used for financial analysis
IKEA – Welcome inside Financial Reporting & Management Accounting. (EMBA 105)
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Table of Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 Figure 13 Figure 14 Sales in Euros for IKEA, SFCI and Walmart from 2008 to 2011. 6 Liquidity (Current Ratio) for IKEA, SFCI
Financial Reporting and Management Accounting EMBA 105
Course-work: Financial Reporting and Management Accounting – IKEA Welcome inside
Mr. I. Pasmatzis
Paul V Grech Cohort 19, Romania April 2012
IKEA
Executive Summary Accounting is divided into two distinct systems, financial accounting and management accounting. Both systems have been used to evaluate the accounting situation in IKEA. For comparison, the analysis for another two companies, Walmart and Stanley Furniture Company Inc. was also carried out. IKEA appears to be in good shape financially and improving. The long-term strategies employed by the company appear to be towards making the company more financially stable, self-reliant and sustainable.
IKEA – Welcome inside Financial Reporting & Management Accounting. (EMBA 105)
i
Table of Contents Executive Summary Table of Figure 1. Introduction 2. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i iii 1 1 2 2 2 3 3 3 4 5 6 18 20 23 24 27 29
2.1 Financial Accounting
2.2 Management Accounting . 3. Financial Statements/Reporting 3.1 Balance Sheet . 3.2 Income Statement . . . . . . . . .
3.3 Cash Flow Statement 4. Financial Analysis 5. IKEA . . . . . . .
5.1 Financial Analysis
5.2 Management Accounting . 6. Discussion 7. Conclusion 8. References . . . . . . . . . . .
Appendix A – Ratios used for financial analysis Appendix B – Data used for financial analysis
IKEA – Welcome inside Financial Reporting & Management Accounting. (EMBA 105)
ii
Table of Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 Figure 13 Figure 14 Sales in Euros for IKEA, SFCI and Walmart from 2008 to 2011. 6 Liquidity (Current Ratio) for IKEA, SFCI
References: Based on Das (2010) and McIsaac (2004) Current Ratio Current Assets Current Liabilities Measures short term liquidity Quick Assets* Current Liabilities *Where quick assets are Current Assets less Inventory (Mc sac, 2004) Sales Total Assets Asset Turnover Asset Management