Importance of Financial Management in Business Finance

Applied Business
Finance

Contents
INTRODUCTION.....................................................................................................................................4
SECTION 1................................................................................................................................................4
Concept of financial statements & importance of financial management................................................4
SECTION 2................................................................................................................................................6
Difference types for financial statements:................................................................................................6
SECTION 3................................................................................................................................................7
Company’s key finance performance indicators:.....................................................................................7
SECTION 4................................................................................................................................................8
Discuss the process which business use for improve its financial performance.......................................8
CONCLUSION..........................................................................................................................................9
References................................................................................................................................................10

INTRODUCTION
The process of managing and controlling the funds and other monetary forces is known
as Business finance. This filed of is mainly related with buying useful raw material, assets and
useful material which is beneficial in increasing the economic value of company (Beck and
Levine, 2018). Internal department of uses different sort of financial statement in order to
evaluate the financial strength and position of company within an accounting year. In this report,
a hypothesis company named Dryhand have been selected in order to better understand the
importance of financial management.
This report includes, discussion related with importance and concepts of FM, useful financial
accounts and ratio analysis. Calculation related income statement, balance sheet by using
Business Review Template.
SECTION 1
Concept of financial statements & importance of financial management
Financial statements provide helpful in assessing real expenses, profits, sales, liabilities, and
assets during an accounting period, which explicitly facilitates taking useful decisions to achieve
competitiveness. The income statement, cash flow statement, as well as balance sheet seem to be
the three key annual statements that help to report all corporate activities in a consistent manner
such that a monetary benefit or development can be calculated. Many of these annual reports are
compiled using the relevant financial framework or structure, making the internal audit transition
easier. Accounting information seem to be the documents that are prepared for a specified
balance sheet in order to evaluate position of the company operations, which involves the profit
and loss. Financial reports are used in companies. The net income determines the operating
income generated by a company for a sales transaction. The capital structure is a rundown of the
financial situation that displays the firm's liabilities and assets. These statements aid the
organisation in understanding its role. The firm uses financial records with the assistance of a
report and a ledger, resulting throughout the progress of the firm. Ratio model is used to analyse
the market role of a company. It is the preparation of financial information that aids in the
understanding of different forms of business positions (Bendell and Doyle, 2017). Liquidity,
profitability, and competitiveness rates are also included. It aids businesses in evaluating which