Concept and Importance of Financial Management in Business

BSc (Hons) Business Management with
Foundation
BMP3005
Applied Business Finance
The concept and importance of financial
management and the processes
businesses might use to improve their
financial performance
Submitted by:
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Contents
Introduction p
0

Section 1: Definition and discussion of the concept and
importance of financial management p
Section 2: Description and discussion of the main
financial statements and explain the use of ratios in
financial management
p
Section 3: Using the template provided p-p
i. Completing the Information on the ‘Business Review Template
(Ensure that you display your calculations for this detail)
p
ii. Using Excel producing an Income Statement for the Sample
Organisation (see Case Study). This should be included within
your appendices p
iii. Using Excel completing the Balance Sheet p
iv. Using the Case study information describing the profitability,
liquidity and efficiency of the company based on the results of
ratio analysis p
Section 4: Using examples from the case study describing
and discussing the processes this business might use to
improve their financial performance p
Conclusion p
References
Appendix p
1

Introduction
Financial management of the organisation will deal with all the financial resources in the
business organisation such that a smooth floor is carry forward in business operations
with the minimum utilisation of resources. This is a much needed part because in order to
attain the desired objectives of the organisation the company will have to get the limited
availability of capital. The report will defeat the importance of financial management in a
business entity and the financial statement with methods and ratio analysis that are
portrayed.
Section 1: Definition and discussion of the concept and
importance of financial management
The most essential component in every organisation is the financial management.
The area of the functions of the organisation will depend upon how far the
management is able to evaluate the profitability expenses cash and credit that are
related to the organisation. These objectives will be identified by proper allocation as
well as the acquisition criteria that is dealt by the management (Bulturbayevich and
et.al, 2020). The financial management will also define the operational efficiency of
the organisation. A proper financial planning organising directing and controlling
organisational funds will have to be inhibited by the organisation such that their goals
and objectives will properly analysed. It is entirely the duty of financial manager to
manage the resources in the organisation based on the key decisions that are being
adopted by the planning department of the organisation. When it is a good financial
manager then he will inculcate himself into planning as well as organising the
resources in a most prominent manner that will contribute for the maximization of
organisational value. In our company is there will be different processes that are
related to planning funds organising as well as controlling financial activities. This
process will be dealt by the financial management and the decisions that are to be
made on the investment as well as the finances will probably vary from capital to the
budgeting. Financing will indicate the entire performance of the organisation right
from the standard till the onset of time cost of financing will be evaluated. The gain of
profits or the losses will be included in the management is performing that financial
duties. A proper monitoring of financial activities will have to be carry forwarded such
that the details that are included and are to be understood will therefore be process.
The different functions of financial department are as follows:
Estimate required capital: it is the duty of financial managers in order to evaluate the
amount that is required to be the capital. There are several areas in the
organisations which require financial planning and based on this the implementation
criteria will be carry forwarded. Upon all the implementation plans there will be
established mint and based on that the expansion of the company can be known. In
this modernized business environment where investment is fixed and the assets are
decided upon the investment and therefore the financing should be properly
estimated today arrived the capital.
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