MMB Plc’s Issues and Financial Information

Subject: Finance
Pages: 2
Words: 528
Reading time:
2 min

The five main issues regarding the interpretation of financial data by MMB Plc include legislative framework, historical data, type of profit, costing technique, and industry performance.

The Interpretation of Financial Data by MMB Plc.
The Interpretation of Financial Data by MMB Plc.

To know the type of profit highlighted in the financial statement, it is important for the company to provide its profit and loss statement as an additional piece of financial information that would be instrumental in determining whether SB would be a good candidate for outsourcing or not. To address the issue surrounding the legislation of financial practices, the corporate tax paid to the government would be an additional and useful piece of financial data that would help users to disseminate and analyze the financial statement clearly. Indeed, taxes paid to the government reflect the legislative framework governing the firm’s operations. Therefore, by providing such details, it would not only be easier for information users to know which legislative framework to use but also to understand how these payments affect the firm’s profitability.

Additionally, to address the issue of historical data, it is similarly important for SB to provide financial information relating to the company’s records of expenses in the past ten years. This information can be obtained from its annual report and income statement. If such information were placed alongside the available data, it would be easier for data users to compare and contrast the current performance with historical data to have an in-depth understanding of the overall financial performance of the company. It is also important for the firm to provide additional financial information relating to its balance sheet performance to address costing methods as an issue affecting the overall performance of the company.

Such data would be instrumental in understating the production and decision environments that affect claims management processes at SB. Moreover, industry performance issues can be addressed by providing reports on the insurance claims management sector. This type of data is not specific to MMB’s operations alone because it averages the performance of several firms in the sector to understand how environmental factors influence the efficiency of operational performance. The information would be useful in comparing the company’s performance with those of other firms in the industry to get a contextual understanding of the financial information presented by the proposed outsourcing firm.

Overall, these additional pieces of financial data would be instrumental in providing valuable information needed to make a decision regarding the outsourcing of MMB’s claims management processes. Particularly, they would be instrumental in providing qualitative and quantitative data that are needed to make such important decisions. This statement is consistent with the views of Kleindienst, which suggest that qualitative and quantitative data are needed in making decisions regarding the merit and demerits of companies that want to be prospective candidates for outsourcing. So far, the information provided on the firm’s financial reports only highlights the quantitative aspect of managing outsourcing decisions, but the additional information for review would help to provide additional qualitative data.