Applied Business Finance: Explaining Financial Management, Financial Statements, and Ratio Analysis

Applied Business Finance

Contents
INTRODUCTION...........................................................................................................................................3
SECTION 1....................................................................................................................................................3
Explaining concept and importance of financial management................................................................3
SECTION 2....................................................................................................................................................4
Describe the financial statement and the use of the ratios used in the financial management..............4
SECTION 3....................................................................................................................................................5
(i) Complete the Business Review Template............................................................................................6
(ii) Produce the income statement using Excel........................................................................................6
(iii) Complete the Balance Sheet using Excel...........................................................................................7
SECTION 4....................................................................................................................................................7
By considering the example of the case study, calculate the ratios and analyse how can the financial
performance of the business can be improved.......................................................................................7
CONCLUSION.............................................................................................................................................10
REFERENCES..............................................................................................................................................11

INTRODUCTION
Financial management is a systematic process an association's data material in such a
manner that the business may achieve success. In today's world, there is more rivalry than ever
before, which must be fought by properly allocating, employing, and assessing a firm's assets.
The current paper will cover the notion of money planning as well as its relevance (Fan and
Chatterjee, 2019). It will focus on explaining key financial statements and how to use statistics in
financial planning. It will focus strongly on meeting the criteria of a specific example. This will
entail procedures and make changes in regions where they are missing.
SECTION 1
Financial management is the technique and practice of handling financial systems that direct
and coordinate a business's activities in order to capture overall monetary assets to achieve
organizational quality and power goals established via a strategic mindset. Financial
management, but in the other hand, is described as "the top management dealing with the
budgeting, generating, regulating, and administration of the firm's funds." Financial Management
(FM) is concerned with working with and evaluating money and investments in order to make
strategic decisions for a company. FM is critical for having a greater understanding of how a
firm operates and achieving healthy fiscal circumstances. It aids in the development of initiatives
and a lengthy strategy to ensure that goals are met (Guironnet, Attuyer and Halbert, 2016).
Importance of financial management
It is a vital activity since it aids in strategy development, organizing, coordinating, and
regulating financial endeavors in order to ensure that right principles are followed. FM is
considered vital since it helps the organisation retain a sufficient flow of cash while also
guaranteeing that investors receive a greater return on investment. Furthermore, it'll become
feasible to achieve larger profit by maximizing resource use and developing selling investment
opportunities. This has a huge impact on the quantity of investment needed. By formulating
organization’s financial laws and regulations, working capital may be correctly formed.
• Financial forecasting: Financial administration is needed to perform to organize and build
effective human finances in a corporation. It assesses a business’ needs in light of its accounting