Accounting for Decision Making

Accounting for Decision Making

Costa Company

Costa Company, like any other organization seeks to expand and grow its presence. Indeed, growth of the company would be measured by its presence in various markets, together with profit margins. It must be noted that the profits that were realized by the company had greatly reduced as compared to the previous financial year. Decision-making is an important aspect in management in that it affects all functions of management. This will range from staffing, coordinating, planning and direction. However, all these functions would have to be done in consideration of the existing economic situation. Costa's financial statements are very important in that they inform the management on decisional king, with regard to resource allocation and generation of revenue.

Looking at the figure provided, it is clear that the company did spend so much money into new investments. This was the reason behind the decline in the profit margin. In order to incre4ase the profit margin, the company ought to reduce its expenditure on capital investments. Reduction in capital investment by about 50% will see the company increasing its profits a margin by a whopping 25%. However this will depend with the demands developed by other sectors of its operation. This may include recruitment of staff and increased investments in marketing (Bonner, 2007).

Costa's financial statements provide a situation where the company has to utilize the already made investments in transforming and growing the company. Indeed, the company has the advantage of already established infrastructures as it seeks to grow bigger in the market. So far, the operational costs of the company are relatively high as compared to the output developed by the company. The company has therefore to make substantive cuts in order to widen the profit margins of the company. The company has also dedicated 67% of the capital investments in the financial year into technology. So as to taker advantage of this development, the company can seek to reduce the workforce per unit space. This may not in any way imply that the organization has to cut down on its employees. Rather, the company can restructure and send some of the employees to new centers. This will overly reduce the overhead costs of the organization.

As much as the terms parameter and statistic have a number of similarities, there are differences between them. A parameter is any existent characteristic of a certain population, whereas a statistic is a characteristic of a sample. Additionally, a statistic is often used to give estimations about a value or values of a given parameter (Ingram, 2005). Significantly to note is that the value of a statistic often would change when different samples were used, and this often leads to the process of sampling statistic distribution. This is because, when a researcher has