Finance Assignment On Strategic Financial Management of Companies

Question

Task: Finance Assignment Scenario
You have recently joined Penco, a small pension fund that aims to strategically invest in low risk companies with a historically satisfactory return on investment.

Task 1 of 3 – Briefing Report
Instructions:
As a junior analyst, your first task is to review the market and select two companies listed on the London Stock Market and to access their financial statements. At the end of the report you should make recommendations to Penco to invest.

Calculations and financial ratios supporting the recommendation should be appended to the report for the board’s attention. Your report should:
• Analyse financial statements to assess the financial position of the organisations.
• Recommend organisational decisions based on evaluation of financial statements using financial ratios. • Propose managerial recommendations on the strategic portfolio of the organisations based on financial analysis.
• Apply financial appraisal methods to analyse competing investment projects for the organisations.
• Justify strategic investment decision the organisations using relevant financial information.
• Critically analyse strategic investment decisions using information.

Task 2 of 3 – Report
Scenario:
The Board of Penco approved your recommendations and decided to purchase stock in the two organisations you recommended. In fact, based on your recommendations, they decided to invest more than anticipated. The previous budget was £2,000,000 but the board wants to invest £1,500,000 in each of the two organisations you recommended which means that an extra £1,000,000 is required.

Instructions:
Write a short report containing:
• An introduction discussing the need for short term working capital and long-term funds.
• A main body comparing the sources of funding, including their pros and cons.
• A justified recommendation of your choices of funding for the additional £1,000,000 using a range of criteria related to cost and risk.

Task 3 of 3 – Management Report
Scenario:
Penco is excited by the results of your previous work and has asked you to review operations at Exciteco where it is an institutional investor. Exciteco manufactures electronic components for export worldwide, from factories in Finland, for use in smartphones and hand-held gaming devices. These two markets are supplied with similar components by two divisions, Phones Division (P) and Gaming Division (G). Each division has its own selling, purchasing, IT and research and development functions, but separate IT systems. Some manufacturing facilities, however, are shared between the two divisions. Exciteco's corporate objective is to maximise shareholder wealth through innovation and continuous technological improvement in its products. The manufacturers of smartphones and gaming devices, who use Exciteco's components, update their products frequently and constantly compete with each other to launch models which are technically superior. Exciteco has a well-established incremental budgeting process. Divisional managers forecast sales volumes and costs months in advance of the budget year. These divisional budgets are then scrutinised by the main board and revised significantly by them in line with targets they have set for the business. The finalised budgets are often approved after the start of the accounting year. Under pressure to deliver consistent returns to institutional shareholders such as Penco, the board does not tolerate failure by either division to achieve the planned net profit for the year once the budget is approved. Last year's results were poor compared to the annual budget. Divisional managers, who are appraised on the financial performance of their own division, have complained about the length of time that the budgeting process takes and that the performance of their divisions could have been better but was constrained by the budgets which were set for them.

In P Division, manager had failed to anticipate the high popularity of a new smartphone model incorporating a large screen designed for playing games and had not made the necessary technical modifications to the division's own components. This was due to the high costs of doing so, which had not been budgeted for. Based on the original sales forecast, P Division had already committed to manufacturing large quantities of the existing version of the component and so had to heavily discount these in order to achieve the planned sales volumes.

A critical material in the manufacture of Exciteco's products is silver, which is a commodity which changes materially in price according to worldwide supply and demand. During the year supplies of silver were reduced significantly for a short period of time and G Division paid high prices to ensure continued supply. Managers of G Division were unaware that P Division held large inventories of silver which they had purchased when the price was much lower. Initially, G Division accurately forecasted demand for its components based on the previous years' sales volumes plus the historic annual growth rate of 5%. However, overall sales volumes were much lower than budgeted. This was due to a fire at the factory of their main customer, which was then closed for part of the year. Reacting to this news, managers at G Division took action to reduce costs, including closing one of the three R&D facilities in the division.

However, when the customer's factory reopened, G Division was unwilling to recruit extra staff to cope with increased demand; nor would P Division re-allocate shared manufacturing facilities to them, in case demand increased for its own products later in the year. As a result, Exciteco lost the prestigious preferred supplier status from their main customer who was unhappy with G Division's failure to effectively respond to the additional demand. The customer had been forced to purchase a more expensive, though technically superior, component from an alternative manufacturer. Penco’s institutional shareholders' representative, recently appointed to the board, has asked you as a Performance Management Expert for your advice: 'We need to know whether Exciteco's budgeting process is appropriate for the business, and how this contributed to last year's poor performance.' However, the shareholder representative did also acknowledge that external factors had contributed to Exciteco's poor performance in the last year and suggested that it would be useful if Exciteco's performance reports distinguished between variances which had resulted from its own operational performance as opposed to external circumstances which could not have been anticipated when the budgets were produced.

You noted that many organisations address this issue by analysing variances into planning and operational elements. Prepare a report that deals with the following:
• Critically discuss key concepts, features and importance of cost accounting,
• Evaluate the weaknesses in Exciteco's current budgeting system and whether it is suitable for the environment in which Exciteco operates.
• Evaluate the extent to which Exciteco's poor performance for the last year can be attributed to external factors.
• Discuss the potential benefits to Exciteco of analysing variances into planning and operational elements.

Answer

TASK 1
Financial Ratios Of Tesco Plc Evaluated In The Finance Assignment

Table 1: Showing Financial Ratios of Tesco Plc Of 2020

Table 2: Showing Financial Ratios of Barclays Plc Of 2020

1.1 Analysis of the company
1.1.1 Current Ratio
The current ratio of an organization measures the ability of the organization to pay the short-term obligation of the company to the lenders in a year. Therefore, to make the payment in de team the current assets of the company have to be greater than the current liabilities of the company. As the more the value of tea sets of the company the better it will be for the company to initiate the payment to all the lenders. Hence, the stable ratio of the current ratio that the organization wants to have is 1. in Tesco plc the current ratio of the company is 1. On the other hand, the current ratio of the company of Barclays plc is 0.234. this shows that the current ratio of the Barclays plc is less than the Tesco lc. Hence, Penco limited could be at risk if the company invests in Barclays plc. Since the value of the current liabilities of Barclays plc is greater than the Tesco plc (Irman and Purwati, 2021).

1.1.2 Debt Ratio
The debt ratio states the percentage of the assets of the company that is purchased by undertaking debt. Therefore, it is considered that the lower the debt ratio of the company, the better it will be for an organization. as purchasing any assets with the help of a loan could be risky for any organization. The debt ratio of Tesco plc is 0.27 however, the debt ratio for Barclays’s plc is 0.012. therefore, this states that the debt ratio of the company is less in the Barclays plc. Hence according to this ratio, Tesco plc is risky in terms of the debt ratio than Barclays plc. This shows that for the debt ratio it is considered that the Tesco plc the Penco plc will be less likely to come at any risk because of the debt. As the debt ratio of Tesco plc is less in the year 2020 (Nuryani and Sunarsi, 2021).

1.1.3 Net Profit Ratio
The next profit ratio assists the company in understanding the percentage of profit that has been earned by the company. As after earning the revenue the company has to deduct multiple expenses to identify the net profit margin with the help of the net profit ratio. The net profit ratio of Tesco plc is 10%. On the other hand, the ratio of the Barclays plc is 86.02%. hence, this demonstrates that the net profit is earned maximum by Barclays’s plc than the Tesco plc. Therefore, based on the net profit ratio the Penco company needs to invest in Barclays plc. Since the company can retain more of the earning than Tesco plc (Mulyadi and Sihabudin, 2021).

1.1.4 Asset Turnover Ratio
This ratio shows the efficient use of the assets of the company that helps the organization in the generation of sales. According to this ratio, Tesco plc has an asset turnover ratio of 1. but in Barclays’s plc, the ratio is 0.004. therefore, it can be said that the ratio in both of the organizations is performing averagely. However, it can be still said that Tesco plc is performing is still better than Barclays plc. Therefore, based on this, the Penco company can invest in Barclays’s plc for the asset turnover ratio (Nofiana and Sunarsi, 2021).

1.2 Recommendations of Organizational Decisions Based on Financial Ratios
According to the financial ratio of both Tesco plc and Barclays’s plc, both the companies are performing similarly. As if the two of the ratios of Tesco plc are working favorably then such two ratios are working adversely and vice versa. Therefore, the Penco company has to make decisions based on the risk appetite. However, it is better for that company to invest in Barclays plc. Since the net profit ratio and the debt ratio of the company. As both the ratios indicate that the company will be able to stay in the market for long terms.

1.3 Managerial Recommendation on The Strategic Portfolio Of The Organization
The strategic portfolio manager of the Penco company has to understand how the company can be able to understand the ways to meet the strategic objectives of the Penco organization easily. Therefore, for making a strategic portfolio, the organization of the company has to analyze the current scenario of the organization as based on that the company has to make the investment plans to understand its risk adaptability. Without knowing this the Penco company might end up bringing losses, as for strategic portfolio it requires to know this. After getting the information the Penco company can start to understand the asset allocation for the investment.

1.4 Financial Appraisal Methods to Analyze Competing Investment Projects for The Organizations
The appropriate methods for analyzing the competing investment projects for the company are
Net present value
Payback period
Internal rate of return
Profitability index

1.5 Justification of Strategic Investment Decisions
The Penco organization has to make strategic decisions based on the financial goals of the company. As the company needs to be comfortable enough with the amount that will be invested in the companies either in Tesco plc or in Barclays plc. If the company spends the maximum amount without knowing the goal of the company this might impact the company in the long and short term.

1.6 Critical analysis of the strategic investment decisions
Once the Penco organization starts to understand the financial goals it will help the company in proper allocation of the assets in both the companies. This way the Penco will be able to gain an adequate return on the investment since both Tesco lc ad Barclays’s plc are from different sectors. Therefore, if one sector performs averagely then the chances are high that the risk of it will be mitigated from another sector.

TASK 2
2.1 Need of Short-Term Working Capital and Long-Term Funds
2.1.1 Need for Short-Term Working Capital Are as Follows
The short-term working capital is beneficial to meet the daily requirements of the business. Since every day, an organization requires a certain amount of cash to initiate the payment of the routine payment, meet with the unexpected costs also, for procurement of the basic materials or finished goods that are necessary for continuing the business of the organization (Booc and Anton, 2021).
Having efficient short-term working capital management assists the company in maintaining and improving the profitability and earnings of the Penco. Therefore, the ultimate objective of the short-term working capital is to maintain the operating cycle of the working capital also in minimizing tec sot of the capital that is spent n the working capital. Therefore, this would lead to maximizing the potential return from the investments in the current assets. Short-term working capital works as an accounting strategy that emphasizes the maintenance of the adequate balance between the current asset of the company and the current liabilities. The short-term working capital of a company assists the Penco in covering the financial obligation of the organization since it boosts the earnings of the same (Kliestik et al., 2021).
Managing the short-term working capital of an organization means managing the cash, inventories, accounts receivables, and accounts payable. This assists the Penco to emphasize the areas that are highly important to maintain the profitability and liquidity of the organization (Hakim and Kasenda, 2021). Short-term working capital also works as a metric to check the liquidity, efficiency, and overall health of the company. Since it works as a reflection of the outcomes of the other multiple activities of the Penco. The requirements of the working capital are highly varied from the different industries. Therefore, the requirement of the short-term working capital also depends on that. It is because there is a difference in the collection period and the policies of the payment and some more (Godswill et al., 2021).

Need of the long-term fund are as follows
The long-term funds of an organization help the company in aligning the capital structure of the organization with its goals that are long term and strategic. This helps the organization in taking more time to make the proper planning for attaining the target of earning an adequate return on the investment (Sachs et al., 2021).

The planning with the long-term funds helps the company to coordinate the decision for the purchasing of the assets. Purchasing the expensive machinery that will help the Penco to grow requires a huge investment. Therefore, precise planning for the investment on the assets to make them workable in favor of the business (Salvioni and Gennari, 2021).

When a company has long-term funds, it helps them in building sustainable relationships with the investors. Having the appropriate investor will help the Penco in creating furthermore partnerships and relationships with the existing shareholders and the other investors. Since such a company is financing for such a long-term prospect, the organization will not be required to identify the prospect repeatedly by themselves. Since the potential investors will reach out to the company by themselves (Stachová et al., 2021).

A company that holds the long-term funds minimizes itself from the risk from financial risk that arises due to the fixed interest rates, debts. Since the existence of such factors can immediately impact the balance sheet of the organization. therefore, it protects the company from any losses. As if the Penco encounters any losses, then the organization will be able to pay off the long-term funds (Krizanova et al., 2021). The long-term funds of a company provide it greater resources and the flexibility for the funding of the multiple capital needs of the organization. therefore, this gives the company another source for the utilization of the funds and the company does not have to rely on a single capital source. Furthermore, it assists the company to spread out all the debt in different areas of the Penco (Krueger et al., 2021).

2.2 Sources of Funding
The different sources of the funding are as follows

2.2.1 Short Term Sources of Finance
Pros
Short-term sources of finance give a quick payout to avail the cash whenever it is needed. Therefore, it is highly helpful during any emergency. Such a source of finance does not require going through the lengthy process for approval. Besides, it allows the borrowers who have had bad credit in the past. Moreover, having a short-term loan allows the borrower to build or improve good credit history (Kliestik et al., 202).

Cons
In the short-term sources of funds, the interest rates that are charged are high. Offer it is seen to be higher than the long-term sources of funds. Therefore, the interest amount gets high that has to be paid every month. Besides, not paying the loan amount at a time according to the schedule can damage the credit score too. Furthermore, for the borrowers, the chances are high they get into the debt cycle. It is because the borrowers start to increase the purchase of expensive products. Therefore, it puts them into the perpetuity cycle to rely on the debt (Weng et al., 2021).

2.2.2 Medium-Term Sources of Finance
Pros
The medium-term sources of finance have a fixed rate of interest. Having a fixed rate of interest also the owners of the business in knowing the exact costing that has to be paid overtime. This source of finance requires making the payment regularly. However, there are some weeks spaced in-between months or in every fortnight. This is beneficial for the businesses that are maintaining a budget to cover the fixed cost expenses (Horvathova and Mokrisova, 2021).

Cons
The medium-term sources of finance need a longer application process. It is because it requires more paperwork than the short-term sources of finance. However, the application process takes lesser time in comparison to long-term loans. Moreover, if the borrower does not have a good cash flow or credit score, then it will be tough for the borrower to qualify for this type of loan. Furthermore, for taking this loan one has to require collateral (Bui, 2021).

2.2.3 Long Term Sources of Finance
Pros
According to the borrowers, debt is the less costly source of financing. The reason for the long-term loan to be cost-effective is the interest on the debt is a tax-deductible expense. Besides, the creditors and the bondholders assume this debt to be as the relatively has less risk for the investment. Furthermore, it needs lower returns. Long-term financing provides adequate elasticity in the financial structure or the capital structure of the company (Nieuwenhuijsen et al., 2021).

Cons
It is a permanent burden for the company t pay the interest on the debt. Since the company has to make the payment to the creditors or the bondholders at a fixed rate even if the organization does not earn profit or makes losses from the investment. However, for paying the debt there is a fixed maturity period. Therefore, debt is considered as the source of finance that is risky. As the organization has to initiate the payment for the principal amount and the interest at a specific time. Since if the organization does not make the payment of the principal and the interest amount on time the company might lead to bankruptcy (Wijburg et al., 2021).

2.3 Justification for Selecting the Sources of Funding for An Additional £1,000,000 Related to Cost and Risk
Now after understanding the Penco and the company in which the Penco will invest the sum in those companies, therefore it is better to take the long-term source of the funds for making the payment of the additional £1,000,000. Since this will help the company in minimizing the cost and the risk. Besides, the company will have enough time to initiate the payment to reduce the risk burden of the cost. Therefore, the Penco will be able to put the main focus on the return on the investment (Nyikos et al., 2021).

Since Penco can manage to invest the majority of the amount by the retained earnings of the firm of the overall years according to the assumption, hence £1,000,000 the Penco will be easily be able to pay all the debts when the time will come for paying the investment. Also taking the investment opportunity now will be effective since the probability is high that duties to the presence of inflation it will be difficult to invest in the year to come. As the interest rate for taking the loan will increase. Furthermore, the financial institution does not have many obligations for taking the land from them. However, in the future, the financial institutions might increase their rules and regulations for the lenders for taking the long-term source of finance (Brylev et al., 2021).

Both the companies where Penco will invest its amount will get an adequate return from anyone of them. Hence opting for the long-term source of finance will help the firm in understanding the different streams of income for initiating the entire payment. Also, in that duration, Penco will be able to understand whether the investment is giving any return to the company. Hence, the company gets another way for making the payment is through the return which the company will earn from the investment (Nikbakht, 2021).

TASK 3
3.1 Critical Discussion of The Key Concepts, Features, And the Importance of The Cost Accounting
3.1.1 Concept of Cost Accounting
Cost accounting is an approach of accounting where the cost that the company has enquired for the performance of any business processes. The cost accounting assists the management of Exciteco in making better strategic decisions. In cost accounting, there are prime three elements are present as without them the cost accounting will not be calculated. They are the materials, other expenses, and labor. Furthermore, for analyzing the costs accounting in a precise manner the names of the different types of costs are the variable cost, fixed costs, sunk cost, and opportunity cost. Moreover, in cost accounting there are different techniques of costing are present. As such techniques help to take any managerial decisions effectively. They are marginal costing, direct costing, standard costing, historical costing, absorption costing, and uniform costing (Yagi and Kokubu, 2021).

3.1.2 Features of Cost Accounting
The cost accounting will assist Exciteco to make decision-making for the systems of the budgeting for the future.

The cost accounting will provide with help the Exciteco is fixing the proper price of the goods and the services. This will also assist Exciteco to analyze the cost of the different operations and the process of Exciteco. If there are nay ways in the company where the wastages of the materials, time or expenses are taking place for the finished products it can be controlled. As the cost accounting through the making of the reports will be able to identify such areas in the Exciteco. It can figure out the profitability that has been earned by Exciteco from the products y using the cost accounting. This will assist the management of Exciteco in taking strategic steps to maximize profits.
It gives a bigger insight as to how to minimize the total capital in the products and services of Exciteco through cost accounting. The overall data that the cost accounting of the Exciteco will present will help in interpreting the information of the planning, control, and decision making.

Cost accounting helps to price the budgets of the company. Thus, this will help Exciteco in the implementation of better budgetary control.

3.1.3 Importance of Cost Accounting
Monitoring costs
The cost accounting will assist Exciteco in forecasting the cost price and the selling price of the products of the company. This will assist Exciteco in formulating the plans of the business and also its policies. For instance, considering the cost value of the product of Exciteco will assist the management of the company in developing the different techniques that will reduce the cost to maximize profitability (Biancone et al., 2021).

Identifying the per-unit cost
The different techniques of cost accounting will help Exciteco in identifying the per-unit cost of the product. By having proper knowledge of the per-unit cost the Exciteco will be able to set an adequate price for selling the product (Dekamin and Barmaki, 2021).

Detecting nonprofitable and profitable activities
Knowing such activities will help the management to put a halt to the activities that do not assist the company in giving profits to the organization. therefore, Exciteco can put more emphasis on the activities that generate profits for Exciteco (Huang et al., 2021).

Comparison of costs
The data that the company shows through the cost accounting will assist Exciteco in the evaluation and comparing the costs multiple times. Therefore, the company will be able to make changes in the cost of the products. Hence, Exciteco will be able to set the prices that will be preferred by the buyers to purchase it (Ulupui et al., 2021).

3.2 Evaluation of The Weaknesses Of The Current Budgeting System Of The Exciteco’s And Whether It Is Suitable For The Environment Of Exciteco’s
3.2.1 Time
Once the budget of the weaknesses of the current budgeting system is prepared it has to be approved by the board before the next accounting period starts. Since this helps the organization to make some changes to the budget. here, as the budget is getting approved by the board after the starting of the accounting will create difficult for the organization in following the budget. It is because once they may have entered in the new financial year the majority of the activities are gets started hence, to change everything from the middle of the quarter will disrupt the year of the company. Besides, once the budget is clear at the beginning of the year create a goal for the entire members of the organization to focus on the specific goals that Exciteco will have to achieve at the end (Nikulina et al., 2021).

3.2.2 Budget Planning
The planning of the budget has to do with a realistic approach. Since in the last year the budget was poor. Therefore, this states that Exciteco has to make a budget that the company will be able to achieve in the given financial year. Therefore, for making the budget the Exciteco will have to consider the internal factors and the external factors of the organization. this will assist the budget planner to consider all the elements that qi lame sure for the Exciteco to achieve the target of the budget easily. Besides, this will help the different sub-departments of the Exciteco to make their respective strategies adhere to the annual budget (Muslih, 2021).

3.2.3 Budget Accuracy
While preparing the under the manager needs to follow a specific model. So that the mistake of the overlong will not arise in the future years while preparing the budget. By preparing a budget model for one time will ensure that Exciteco adheres to all the elements of the budget. Once the model of the budget is prepared y the organization, the company can follow the budget every year. However, in the initial time of the preparation of the model, it could be time-consuming. However, dedicating such time will ensure that the mistakes for not considering an element will not be repeated. As creating of such mistakes creates an impact on the overall volume of the sales of the products of Exciteco (Arsani and Sihombing, 2021).

3.2.4 Market Research
The knowledge of the present requirements of the market is important. Since this helps to understand the present demand of the goods in the market. Furthermore, it helps to ascertain the future demand for the products too. Therefore, if the P division had done better research, then it would not have created many problems in knowing the high demand for the new smartphones. As the smartphone is designed with a large screen for ease of playing video. However, there were no technical modifications have been made since there is a high cost for making such expenses. It is because for such budgets there was no budget that the company has made beforehand. Exciteco to increase the volume of the sales company started to offer heavy discounts to the customer to reach the anticipated profit margin. It is because Exciteco knows that the company has not updated the technology according to the requirements. Therefore, to make the sales of all the smart phones in that particular financial year the Exciteco has to sell them off at a minimal price to manage the fixed expenses for running the company (Hedayati et al., 2021).

3.3 Evaluation of Exciteco’s poor performance of the last year can be attributed to external factors
The Exciteco had experienced poor performance in the last year it was because the main customer of the company had experienced a fire in their company. Hence Exciteco had taken the initiative in reducing the costs of the product. So that the stock of the products that Exciteco is having can be taken care of by selling the products at a lower price. However, when the factory of the customer got opened the G division was not much willing to recruit additional staff to manage the increased demand of the product of their company. Therefore, Exciteco was not able to retain its renowned supplier for a long duration. This is how Exciteco has encountered poor performance that is related to the external factor of the organization. Since the accident that the supplier had faced is related to the external factor of the Exciteco. Moreover, as Exciteco did not work on the increased demand the supplier had to purchase the products from other places where the price of the products was high. However, the quality of the product based on the technology is technically superior to that was purchased by the alternate manufacturer (Handin, 2021).

3.4 Discussion of the potential benefits to Exciteco for analyzing the variances into planning and operational elements
The probable benefits to Exciteco for evaluating the changes into planning and operational elements are
3.4.1 Guidance
As Exciteco has started to make changes in the planning therefore it is going to give the company the desired outcome that Exciteco has targeted to achieve. Since all the future actions of the company will be coordinated with the specific outcomes based on reaching the target of the particular mission of the company. Therefore, will help the company to take it as a guide to improve the action of the company to provide the company a better future (Ismail and Suhami, 2021).

3.4.2 Utilization of Resources
To produce the products of the smartphone the Exciteco needs purchases raw material from the market. Hence for such procurement, the company has to incur expenses. Hence it is essential to take measures to utilize the resources of the company adequately. It is because even after making adequate takes of the finished product the company might end up making losses. As it will be seen that the maximum amount the company spends as the operational expenses. Therefore, having proper planning will help Exciteco in including the tactics to improve the utilization of the resources (Laird, 2021).

3.4.3 Commitment and Motivation
Every member who is associated with the organization will not feel motivated. Hence Exciteco needs to have proper planning, as proper planning shows the calker goals that the company has to target in a particular year. Planning also ensures that there is complete clarity of the respective goals that each employee of the Exciteco is supposed to achieve. There is a high likely the when the people have a targeted goal to accomplish it gives them a sense of commitment and motivation to reach the target (Shengelia, 2021).

3.4.4 Performance Standards
In the planning procedure, the performance standard of the people is also mentioned. Therefore, the employee has the proper track to follow to know the sequence of the works that they have to follow. Furthermore, this also works to identify the progression of the work. Therefore, this can be used to assess the standard of the work and also how much work has been accomplished by the individual employee to reach the target. Once the target of each employee can meet then only the Exciteco will be able to reach at the final target of the company as it was planned (Bristol-Alagbariya, 2021).

3.4.5 Flexibility
Certainly, every work of the company cannot be applied according to the planning. Since the rate multiple factors that lay a major role in accomplishing the plans that were prepared at the beginning of the financial year of the Exciteco. Therefore, having a plan makes sure that the managers have a record to maintain to find the alternate ways to monitor it. Besides, the performance of the different operational activities is also can be easily understood. Therefore, if a particular plan is not able to work in a certain manner, then some modifications have to be done in such plans (Yousuf et al., 2021).

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