Global Journal of Management and Business Research, A: Administration and Management, Volume 23 Issue 1

− Comparison between planned and actual figures determined for the entire company; − Comparison between planned and final analytical cost and revenue figures to identify individual causes of deviation. As far as the first type of comparison is concerned (analysis of the "variations" between planned and actual global company data), it is necessary to recall the considerations made in the first part of this book. The analysis of income and financial/asset values must be carried out through indices and financial flows. Absolute values can be misleading if not compared with correlated data. For this reason, it must develop an initial study concerning the comparison between planned and actual data through the static and dynamic analysis schemes illustrated above. The operational phases of this study are as follows: a) Technical Operations to be Carried out on Planned Data − Drafting of the general company budget, consisting of an economical budget, an asset budget and a financial budget balance sheet and financial budget; − Reclassification of the economic and asset budgets according to the schemes adopted in the integrated analysis/programming system; − Determination of all the financial, income and asset ratios illustrated in the first part of this text; − Drafting of the planned financial statement (the final stage in the drafting of the financial budget) structured according to the structure proposed in the integrated analysis/planning system. b) Technical Operations to be Carried out on the Final Data at the End of the Financial Year − Preparation of financial reporting for the financial year ; − Reclassification of the profit and loss account and balance sheet according to the schemes mentioned in the previous points; − Calculation of all financial, income and asset ratios; − Preparation of the cash flow statement using the structure mentioned above. c) Comparison of Actual and Planned Figures − Direct comparison of the individual financial ratios, planned and actual (e.g. planned liquidity ratio with exact liquidity ratio, planned availability ratio with the corresponding ratio determined on real data, etc.); − Direct comparison of all income ratios, both planned and actual (e.g. planned ROE with existing ROE, planned ROI with real ROI, etc.); − Direct comparison between the results shown by the final financial statement and values identifiable in the financial planning output document. From the comparison between the various quotients and the multiple dynamic financial data, it is possible to draw valuable observations on the achievement, expressed in global terms, of the overall corporate results set in the planning phase. The analysis of the variations between the single programmed indicators/flows and the corresponding indexes/flows realised provides essential information on the company's capacity, interpreted as a single entity, to achieve the financial, income and asset objectives set. If, on the one hand, this comparison is beneficial as it allows us to understand the ability of the entire company to achieve the global objectives, on the other hand, it provides few clues on the identification of both the potential causes of any discrepancies between actual data and objectives values and possible solutions to overcome any management problems. To learn, for example, that the ROI, instead of reaching the programmed value of 15.5%, stopped at 4.3% is helpful but does not explain the analytical causes that may have caused this debacle. This is true for any profitability index. The comparison between the planned economic quotient and the index determined on actual data offers limited information if carried out on income values. The considerations are partially different if the focus is on financial ratios and balance sheet data expressed in terms of cash flows. For these types of comparisons, the variation between planned and actual figures provides a sufficiently clear picture of the causes of any deviations. Therefore, as far as the comparison between financial ratios and cash flow statement values is concerned, it is possible to state that the variation deducible from the comparison between forecast data and actual values is sufficiently clarifying of the analytical causes of any differences between planned ratios/flows and actual dynamic financial ratios/values. On the contrary, the income side of comparing planned ratios/flows and actual realised ratios/flows appears very poor. While it is true that one must determine this variation to understand the company's overall situation, it is equally valid that such a comparison is not conclusive. This information gap cannot be filled by a further analysis of the global data of the profit and loss account/budget and balance sheet/budget. The intrinsic and, consequently, unavoidable limitation of the financial reporting/general budget is precisely identifiable in its most peculiar characteristic: the documents in question are summarised schemes that consider the company as a single entity: it is in this specificity that the reason why the analysis of the variations between planned income ratios and financial ratios determined on actual financial reporting values, is, by definition, deficient and in need of in-depth analysis The Implementation of an Integrated Information System in the Company: From Option to Obligation for Efficient and Effective Management 15 Global Journal of Management and Business Research Volume XXIII Issue I Version I Year 2023 ( ) A © 2023 Global Journals