ASS1 Draft

Step 1: Chapter 6 KCQ’s  

KCQ1: The study guide says that a manager must understand the relationship between a firm cost to various aspects of a firm’s activities. In running a business, a manager must understand all the costs of the business and how they relate to the activities of the firm. After some research into Cann Groups annual report I found that in 2024 the company spent $30,439,000 on payments to suppliers and employees and $15,185,000 of net cash used in operating activities. That is a lot of money, to ensure that all these costs are valid and to determine if the company is working at a point where they 'break-even' they must understand these costs and be able to attach them to cost objects. The study guide also says that costs can easily get 'out of control' if the manager does not understand them. This is true as I remember reading a quote once that stated that you only need to spend $27.40 a day to spend $10,000 a year. This could be on those morning coffees, or buying lunch out, or those little $5-$10 purchases that we make without thinking about. The money adds up fast, if it only takes $27.40 a day to lose $10,000 worth of 'profit' a year it is quite understandable how company's cost could become 'out of control' quickly without adequate managing of costs. They must ‘audit’ their spending and regularly review it to ensure that the company is using their money is the best way possible. I am experiencing this right now as I am saving money to go to Canada next year, this has forced me to look at all my living costs and decide what cost I need to keep and which ones can be reduced or cut out to be able to save the maximum amount of money or to gain the biggest profit out of my earnings.

KCQ2: "You want to know where you are now so you can plan where you want to be in the future" This quote means that a business manager wants to know all about the costs of the business and where they go so they are able fully analyse and understand these costs. This in turn will allow the business manager to decide where they are and where they want to be for example, they may want to reduce future costs, or they may realise that they are operating at their lowest costs. "Knowing your current cost structures well is a crucial part of knowing how things are currently going in your business." This quote supports that evidence as well. Both quotes are examples of how accounting can help run a successful business through attaching costs to cost objectives. These quotes can be used in general about many things in life. To get to where you want in life and to achieve your goals is the same in a business you must spend time knowing what you are doing now so you can figure out what is working and what isn't to help you plan your future and achieve that future. Using these methods is how I have ended up applying to university, I had to look at what I was doing in life and know my current situation to plan where I wanted to be and doing my bachelor's degree was what was going to get me to my future.

KCQ3: Managers are faced with decisions which may change their firm's profits and costs "These decisions are future orientated, so we need to estimate future costs." This looks at using previous costs and profits of the business and using this data to make calculated decisions affecting the firms future. However, no one can predict the future, we can make guesses from previous events and data but we are unable to predict the future. The decisions managers make are based on hypotheticals. In the example of the band they have had increasing numbers at their gigs but this does not mean that they will defiantly get the same numbers at the next gig due to many different reasons. This applies when running a property which is business however you have to make decisions without know what is going to happen in the future. For example where I was working we sold stock and brought lots of grain to feed the remaining stock as the land became dry and there was no sign of rain any time soon. Then it rained every day for a week. These decisions were made on predictions of the future from the past however were wrong. This also applies when selling stock and weather the market will be up or down we can all make assumptions on what will happen however no one really knows what will happen in the future and you have to make a business decision in hopes that your predictions are correct.

KCQ4: The study says that managers must understand how "cost and profits can be expected to change in the future with changes in sales or production" and that "Accounting numbers can play an important part in helping managers deeply understand these relationships." The idea that accounting and its processes can help managers understand the workings of the business and the relationship between key costs is repeated throughout chapter 6. This caught my attention as it reminded of the concept in chapter one about most people in business and high-ranking roles have an accounting background. This again shows me that accounting is much more then it seems and is used in all aspects of business and is powerful knowledge to have. These ideas are defiantly helping think about the different things I can do with my accounting degree and where it could lead me in life.

Step 2: Classifying Firms Operating and Financial Items

Consolidation Statement of Financial Position

Cash and cash equivalents – I chose this as both financial and operating activities as the cash equivalents can be equity investors, which is a part of financial assets. The cash can be apart of operating as the company needs the cash to pay suppliers and receives cash from customers.

Trade and other receivables – Looking at the footnotes of Cann Groups annual report it states that other receivables are R&D tax incentive accruals. This is money that the company expects or is owed to them so this is apart of the companies finance costs.

Prepayments – Prepayments are things that Cann Group has paid early, I would classify this as operating costs are the things that are paid in advance are need for the company to operate.

Inventories – Inventories are all the stocks that the company has stored, for Cann Group these are finished goods and cultivation materials and work in progress. These stocks are things that Cann Group need to operate and create revenue therefore they are operating items.

Biological Assets - Biological assets are living organisms such as the marijuana plants that Cann Group use to create their medicinal marijuana products so they are a part of operating.

Non-current assets classified as held for sale – These assets are ones in which Cann Group is holding from sale and is not planning to use with-in the next 12 months. These assets are operating as they will eventually be used in the operation of the business.

Non-current

Property, Plant and equipment – Property, plant and equipment are the buildings, machines and technology a company uses to run their business therefore they are operating costs. Examples of these for Cann group are buildings, rent, freehold, computers and machinery.

Intangible Assets - Intangible assets are assets that do not have a physical form for example a brand, trademarks and copyrights that are used within the business. These can be classified as operating activities.

Trade and other receivables - Looking at the footnotes of Cann Groups annual report it states that other receivables are R&D tax incentive accruals. This is money that the company expects or is owed to them so this is a part of the company’s finance costs.

Financial assets at fair value through profit or loss – These are the company’s financial assets therefore they are a part of the financial activities.

Prepayments - Prepayments are things that Cann Group has paid early, I would classify this as operating costs are the things that are paid in advance are need for the company to operate. These ones are ones that Cann Group don’t plan to use in the next 12 months.

Rights of use assets – Rights of use assets are things such as land or building leases that Cann Group has which they are more then 12 months as they are non – current. These are apart of operating costs as they leases are needed for the company to create their products.

Current liabilities

Trade and other payables – Trade and other payables is what the company owes to others. Cann Groups trade and other payables are to the Mildura construction, contract manufacturing, cultivation vendors, accrued expenses, research and development and other vendors. These are a part of the financial activities as they are credits that the company has.

Contract Liabilities – Contract liabilities is goods or services that Cann group is contracted to transfer to a person who has already paid for it. This is an operating cost as includes the goods and services that are from the company’s operating activities.

Employee Entitlements – Employee entitlements refers to things such as the minimum that Cann Group must pay employees, all the leave they must allow them to take both paid and unpaid and superannuation. This is an operating cost as it is for employees who are a part of making the business operate.

Borrowings – Borrowings are what Cann group has borrowed from others therefore they are a financial activity. Cann Groups borrowings include NAB working capital facility, construction facility, chattel mortgages and short term loans.

Convertible Notes – Convertible notes are either equity or debt investors where they are can get their money back when they want and Cann Group has to pay the money or convert it into shares. As it is related to equity and debt investors it is a financial activity.

Lease Liability – Lease liabilities are the payments that a company must pay for leases they have for the whole duration of the lease. These leases are places where the company operates there for this is a part of operating costs.

Non – current Liabilities

Employee Entitlements - Employee entitlements refer to things such as the minimum that Cann Group must pay employees, all the leave they must allow them to take both paid and unpaid and superannuation. This is an operating cost as it is for employees who are a part of making the business operate.

Borrowings - Borrowings are what Cann group has borrowed from others therefore they are a financial activity. Cann Groups borrowings include NAB working capital facility, construction facility, chattel mortgages and short-term loans.

Lease liability - Lease liabilities are the payments that a company must pay for leases they have for the whole duration of the lease. These leases are places where the company operates there for this is a part of operating costs. These ones being non -current assets are the ones that are to continue for over 12 months.

Administration and corporate costs – Cann groups administration and corporate costs including vesting charge for share-based payments, corporate and administrative expense, insurance, impairment of goodwill, legal and consultancy expenses and impairment of investment at faie value through profit or loss. These expenses all result in the business being able to operate therefore I have classified them as operating costs.

Direct Production costs – Direct production costs are costs that are specifically related to the production of Cann groups goods. Due to them being related to the goods that are produced they are operating costs.

Employee Costs – These costs are operating costs as the employees are ‘suppliers’ as they supply their labour to the company. The employee costs include wages, super, taxes and benefits.

Research and development costs – These costs relate to the cost incurred by the research and development that the Cann group undertakes such as employees to undertake the experiments, materials for experiments, plant and equipment to develop the company. This research and company developments are to improve the operation of the business therefore they are operating costs.

Depreciation and amortisation expenses – These are expenses of both physical and intangible assets of the business, these assets are used in the operating of the business, so I have defined them as operating costs.

Finance costs – Finance costs are fees related to borrowing money with either equity or debt investors placing them into the financial activities.

Loss on fair value of investment – This is the difference between the price assets were purchased and their current market value such as shares. This occurs when the market value is less than the original cost therefore there is a loss. I believe that these are a part of the finance costs of the Cann Group.

Impairment of property, plant and equipment – This cost is an operating cost as it relates to the property, plant and equipment that is used to create Cann Groups goods to be sold.

Fair value adjustment on biological assets - Biological assets are living organisms such as the marijuana plants that Cann Group use to create their medicinal marijuana products so they are a part of operating.

Loss before finance costs, investment loss and income tax expense – This is a financial cost as it relates to the Cann Group's original profits of equity investors

Finance costs - Finance costs are fees related to borrowing money with either equity or debt investors placing them into the financial activities.

Loss on fair value of investment - This is the difference between the price assets were purchased and their current market value, such as shares. This occurs when the market value is less than the original cost therefore, there is a loss. I believe that these are part of the finance costs of the Cann Group.

Loss before income tax expense—This is the loss the company has before income tax, which is part of the financial cost.

Income tax expense – This is the amount of income tax that the company owes at any time, this makes it a financial cost.

Foreign currency translation – When a company has companies in different countries, the money is in different currencies. When the financial statements are curated, the different currencies are all converted to the same currency using the current exchange rate on that date. This includes both operating and financial as both types of costs are being converted.  

Other Comprehensive income for the year, net of tax – This is all the items which affect the company’s finances but are not included in the financial statements already. These are both financial and operating costs.

Step 3: Contribution Margins

To calculate the contribution margin, I found the sales price and variable cost and then used the equation sales price minus variable cost. When calculating the contribution margins and researching the Cann Groups products I found that they do not disclose the specific products that they produce, and they do not sell directly to the customer they sell to businesses to then distribute the medical cannabis. This made it difficult to identify three products that the company produces and what kind of price range they should be in. My calculations are based of average prices of medical cannabis products of Australia.

CBD oil

1 litre of CBD oil sells for around $300 and has a variable cost of $150. Therefor the contribution margin is $300 minus $150 which equals $150.

1 litre CBD oil - $300

Variable cost - $150

Contribution margin = $150

CBD flower

100 grams of CBD flower sells on average for $1,500 and has a variable cost of $1,000. $1,500 minus $1,000 equals a contribution margin of $500

100 grams CBD flower - $1,500

Variable cost - $1,000

Contribution Margin = $500

CBD capsules

100 CBD capsules sell on average for $485 with a variable cost of $400. The contribution margin equals $485 minus $400 which is $85.

100 grams CBD flower - $485

Variable cost - $400

Contribution Margin = $85

The contribution margins for each product are not similar at all. The contribution margin changes due to the amount of labour that is put into the product and how much of the product is produced. This is evident for Cann Group as the CBD flower requires minimal preparation to become a finished product compared to the CBD oil and capsules, therefore it has a larger margin of $500.

Cann Group may produce a range of products/services with different contribution margins as this gives consumers a larger range of choice when buying their products. Also, when one product has a large contribution margin, this can allow for a smaller margin for a different product.

If the Cann group were to only sell a product or service with the highest contribution margin, they would be ‘placing all their eggs in one basket’, reducing variety of choice for customers and limiting their sources of income. If they were to only sell the CBD flower however, there was a change in consumer preference, and consumers wanted the CBD oil then their sales would dramatically decrease as consumers would buy from other brands. However, if the Cann group produced other products that have a smaller contribution margin, then they will be able to keep those customers and continue to generate sales.

I believe that the contribution margin is a very valuable statistic as it allows management teams to identify how much profit the company is making. If we look at the sales price and how much a company makes it will be difficult to compare different products as they are all different prices. When the contribution margin is calculated this also allows Cann Groups management to identify how many units of a product they are able to produce to generate the largest profit off of that product.

A resource constraint for Cann Group is the amount of space that Cann Group has to grow and harvest the marijuana plants. Cann Groups cultivating facility in Mildura can only produce a certain number of marijuana plants, limiting the number of products they are able to produce. This will influence the firm’s decisions on the number of products they produce and the amount of each product.

Step 4: Ratios Explanations 

Profitability Ratios

Gross Profit Margins – I used revenue from customer contracts for sales and then added direct production costs for gross profit and then the revenue from customer contracts again for the sales. The Gross profit Margin means that there is only 20 cents left in every dollar of sales left for costs in 2024 which has increased from 2022 where there were only 0.96 cents left in every dollar. This tells me that the firm does not have much money left from the products to go towards the rest of the company’s costs.

Net Profit Margins—This ratio tells us the profit each sale is making for the company. The Cann Group's net profit margins are negative, which suggests that the company is running at a loss. For 2021 the company was running at -584.7% and has improved this to -333.3% in 2024.

Return On Assets – When calculating the equation, I used loss after income tax expense for the year as Cann Group is running at a loss instead of net profit after tax for this equation. Return on assets ratio is the money that the company makes from their assets, however Cann group is making a loss on their assets rather than a return therefor this ratio is a negative figure. This loss has continuously increased over the years from -24.7% in 2021 to -55.2% in 2024 which should encourage management to look at this figure and create ways on how to generate more money form the company’s assets.

Efficiency (asset management) Ratios

Days of Inventory – When calculating this ratio, I used the direct production cost and then divided that by 365 (number of days in the year) to calculate the average cost of daily goods. I then divided the inventory number by the value I previously found. When calculating this I was unable to calculate values for years 2022 and 2021 as there was no value for direct production cost in these years. You cannot use 0 as a denominator in a equation therefor making these years invalid. The days of inventory ration measures the amount of inventory the company has each day of the year, this can be used as an indicator if the company holds too much inventory or not enough to continue the business to run at a profit.

Total Asset Turnover Ratio – To calculate this ratio I used the revenue from customer contracts for the sales and then divided that by the total assets. The total assets turnover ratio measures the turnover a company creates from their assets. The Cann Group are making a small turnover form their assets at 17 cents in a dollar in 2024. This is a positive sign for the Cann Group however, they could work towards increasing this value in the future.

Liquidity Ratios

Current Ratio – This ratio was straightforward to calculate as Cann Groups financial statements had both current assets and current liabilities in them. This ratio measures if they have more assets or liabilities. The ratio of 0.21 suggests that the company has more assets than liabilities but not by much. To improve this ration Cann Group can work to either increase their assets or decrease their liabilities.

Quick Ratio 1 – The Quick Ratio 1 is the current ratio however without the inventory and prepayments. Cann Group only has a ratio of 0.09 in 2024 which has gradually decreased over the years from 0.86 in 2021. This means that Cann Groups assets have decreased over time, or the liabilities have increased or both simultaneously.

Quick Ratio 2 – The Quick Ratio 2 is also the same as the current ration however it is calculated without the inventory, repayments or receivables. Cann Group does not have a receivables section however it does include trade and other receivables in their financial statements, I used this figure in replacement of receivables. This figure has also gradually declined over the years from 0.42 in 2021 to 0.04 in 2024. The Cann Group should evaluate their previous strategies and decide what works and what does not work so they can work towards increasing their assets and decreasing their liabilities. This will result in an increase in their current ration, quick ratio 1 and quick ratio 2.

Financial Structure Ratios

Debt/Equity Ratio – When calculating this ratio, there was no debt items in the finacual statements so I used the total liabilities as the debt because debit can also be considered the borrowings of a company, which is also the liabilities. I then divided this by the total equity. This ratio shows how much Cann Group relies on borrowed money or investments to fund its company. In 2024 it was at 562.1%. This high value indicates that they heavily rely in debt funding (borrowed money) rather than equity funding (liabilities). This ratio was reasonably low at 41.2 in the previous year of 2023, indicating that Cann Group has only recently started to rely on debt funding for the company. I believe that this is high increase is due to the costs of starting the new cultivation centre in Mildura, Victoria which was only built in 2023.  

Equity Ratio – The equity ratio represents the amount of assets which are from equity or investments. In 2024 15% of the assets were made up of investments. This has dropped from 45.8% in 2023. This significant drop in equity of assets from 2023 to 2024 explains the high increase in the debt/equity ratio from 2023 to 2024.

Times Interest Earned – To calculate the earnings before interest and tax I added the loss before income tax expense and loss before finance cost, investment loss and income tax expense. I then divide this figure by the finance cost which I used as the interest. There were no values for 2023 and 2024 as there was no finance cost for these years which meant the values could not be calculated. This ratio relates to the Cann Group’s ability to pay interest on their debts. Cann Group have a times interest earned ratio is 13.48 for 2022 and 5.05 for 2021 which means they increased their ability to pay interest on debts within those two years.

Market Ratios

Earnings per share – To find the number of issued shares I went to Cann Groups annual report, I found the balance sheet, the issued capital and the footnote that matched that. I then was able to find number of ordinary shares – fully paid. I wrote these numbers in the bottom of my ratio page and divided each by 1,000 so they then matched the same format as the rest of my work. I also used the loss after income tax expense rather than net profit after tax to calculate the earnings per share ratio. This ratio represents the earnings the company makes off each share so in 2024 Cann Group made 11 cents from each share.

Dividends per share- This ration relates to the dividends that a company pays compared to the number of shares there is. I was unable to calculate a value for this ratio as Cann Group does not pay dividends because they are working at a loss.

Dividend yield ratio - This ratio is the amount a company pays in dividends compared with their current market price. I was unable to calculate a value for this ratio as Cann Group does not pay dividends because they are working at a loss.

Net Asset Backing per Share Ratio – To calculate this ratio I divided the total assets by the number of ordinary shares which were calculated for the earnings per share ratio, this gave me the ratio. This ratio represents the worth of each share to the company. The value of the shares for Cann Group is low at 0.21 in 2024, 0.33 in 2023, 0.40 in 2022 and 0.37 in 2021.

Market/Book Ratio – To find the market price of the shares for each year I found a stock prices website and then found the market price of the shares on the 30th of June or the closest date for each year as this is the date that the financial statements are created. I then divided these numbers by the net asset backing per share which I calculated in the previous ratio. This represents the market value of the shares compared to the company books values of the share. All values are less than one which indicates that the market share is higher than the companies value. This can mean that people are anticipating for the company to have future growth.

Step 5: Capital Investment Decision

	Build a new cultivation centre	Extend the existing cultivation centre
Original cost	$120m	$11.7m
Estimated life1	9 years	7 years
Residual value2	$200m	$150m
Estimated future cash flows3
2025	$9.0m	$3.0m
2026	$9.0m	$3.5m
2027	$10.5m	$4.5m
2028	$11.5m	$6.5m
2029	$13.0m	$8.0m
2030	$15.0m	$10.0m
2031	$20.0m	$12.0m
2032	$27.0m
2033	$32.0m

advise your company which option it should invest capital in. Include detailed reasons for your advice.

Discuss your thought processes in coming to your recommendation. Also, discuss the strengths and weaknesses of your analysis.

When deciding my capital investment options, I went to my company’s consolidation statement of financial position and looked at the non-current assets. Property, plant and equipment was their largest non-current asset. I knew that they had recently built a new facility in Mildura so I decided that they may be able to expand on that, after some extra research for this step I found out that they are planning on expanding their current Mildura facility. I also decided that the reasonable and most comparable option to expanding a facility would be to build a new one. My original costs are based off Cann groups cost for the facility they just built and what they are expecting to spend on expanding the facility. The rest of the figures I guessed after some research and knowledge on what things may cost.

I would advise the Cann group to go for option 2 to extend onto their existing growing facility rather than build a new one as this option has a payback period of 3 years and 1 month and option 1 does not payback their investment within the first 9 years. The company is working at a loss so the second option is also less of a money investment but will begin to make them money quicker. The will also require less new staff to train and pay as the expansion will be smaller than the new building and there will be existing employees therefore, they will have less employee costs.

When looking at the the name of the processes it is vary clear that the second option will make a better return as it has an internal rate of return of 38.4% while first options internal rate of return is only at 3.4%. Both options seem to have negative net present values however the first option is -$107.46 million while the second options net present value is -$6.65 million which is a significant difference of $100.81 million dollars.

Discuss the strength and weaknesses of both figures – from study guide

After analysing this data and thinking considering different circumstances I would still advise Cann group to go for the capital investment decision to extend on from their current Mildura site rather than building another cultivating centre

·       An overall summary of how you have experienced learning in our unit. For example, you could include how you found the videos in the unit. Did you prefer the lecture videos ‘chunked’ into smaller videos, or did you prefer the single longer lecture videos? Ot did you not find the lecture videos very useful?

I feel that this subject has given me some basic accounting knowledge that I will be able to take further into my degree and expand on as I go into my accounting job.

·       A description of your contributions to and interactions with others in our unit.

Being an on-campus student has been so helpful for this unit. Each class I am able to communicate with the other girls in my class and Martain which helps when I am stuck on assignment questions or listening to others’ ideas can provide new ways of thinking and new ideas I can add into the assessment. I have also been able to learn more about the people I have been spending all of my time so far at University.

·       A summary of what you think students who study this unit in future should know about how to survive and flourish in this unit. Some themes you might consider writing about are: “What I know now about this unit that I wish I had known when I came in,” and “The three most important things you should make sure you do to keep your sanity in this unit”. Feel free to discard these themes and just write about whatever comes to you around the theme of survival.

Step 6: Chapter 8 KCQ’s 

"The first rule in making decisions is to focus on those aspects of a situation relevant to a decision and to ignore those aspects not relevant to the decision". When reading the study guides this quote really made me think, not so much about business and accounting but about everyday life. This quote is saying the a business manager should simplify each decision they have to make by only looking at the procedures, costs and business aspects that are relevant to it. This is true and people should remember this more in life when trying to make a decision. When we have to make difficult decisions in life then we should all step back and look at the things that are actually relevant to the situation. Also when a business manager is making these decisions they should consider the variable costs which are the costs that are going to change and disregard the sunken costs which cannot be changed and have already occurred. This again is relevant to making decisions in everyday life, we should focus on the things we can control and change and then not worry about the things in life that we cannot change. Everyone had to make difficult decisions in life and the level of difficultness is relevant to each person. Whenever we make those decisions weather they are life decisions, career decisions or business decisions we must learn to look at only the things that are relevant to those particular decisions and only the variable costs and forget about the irrelevant things and the sunken costs.

"Everything we choose to do each day with our time and energies, we are choosing not to do a whole heap of other stuff". This quote is demonstrating the opportunity cost of what we choose to do each day and how we spend our time. This is very relevant especially now with mobile phones, social media and TV many people get stuck on their phones scrolling for hours a day, this is what they are choosing to do and time simply goes by. I know I can definitely get stuck scrolling sometimes instead of doing something else which is productive, we are all just wasting time by doing this. No one has unlimited time to do whatever they want, life in short and if we spend it on our phones all the time  What have we achieved? What have we done?  If you spend 3 hours on your phone each day that adds up to 1,095 hours in a year which is around 45 days a year. 45 full 24 hour days spent on your phone, if you spent only half of that time on your phone you would have around 22 more days where you could learn a new skill, read a book, go for a walk or do whatever you want to do. Since learning how much time I spend on my phone and how much time that equates to I have been very conscious about how much I time I spend on my phone each day and when I do get stuck scrolling asking myself what could I be doing that is more productive and going to help me improve or make me happy. This is either cost or the benefit on the decision we make to be on our phones all of the time.

While reading about the Internal Rate of Return (IRR) and the Net Present Value (NPV) I understand that these are two methods of evaluating potential investment opportunities the IRR by the percentage of return and the NPV in dollars of added value. However, when reading about these they both seem to have many weaknesses.

The IRR does not take into consideration when there is more than one investment along the way and the size of the investment and how that can affect the return and the NPV makes it difficult to determine the discount rate which leave significant room for error and can largely skew the calculations. Neither discounted cash flow method are able to predict future cash flow after the investment has made its money back. Even with all of these weaknesses they are both widely accepted and used methods of evaluating investment opportunities. When looking at both of these methods I do not believe that either of them should be used by themselves to make a decision about investments as they both have many weaknesses which could change the calculation that is given and result in a wrong decisions. I wonder how business managers are using these calculations and how much do they take them into consideration when making business decisions? Can we look at these calculations and find a new one which is able to get around these disadvantages and provide more accurate calculations?

"The effects and decisions on people, can never be completely reduced to simply numbers." This idea is saying that numbers are not always the answer and should not be the only thing considered when looking at decisions that have effect on people. This is true numbers are not everything there are other activities and things that happen in businesses and in life which cannot be recorded, fixed or decided by numbers. I am learning thins right now especially in accounting as I have started working as a trainee accountant I am understanding that in accounting the decisions are not made by numbers they are made from the information and personal investigation. When completing activity statement and tax returns you are required to look and the numbers and then at all the information and details that go with them. The decisions that are made and how the work is completed is not made by the numbers it is made by all the extra information. This is because everyone is different, everyone spends their money in different ways and the work we do results in people having to either pay a bill large or small or them receiving money from the taxation office. For many people this can create a very big difference in their business.