Importance of Business Finance and Economics in Accounting and Management Decision Making

Business Finance
&
Economics

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
1. Explanation about the main determinants of macro or micro economic factors to showcase
the business performance in impact with the competitive environment.....................................3
2. Defining the importance of accounting within an organisation with respect to both reporting
and decision-making...................................................................................................................4
3. Main financial statements.......................................................................................................6
4. Evaluate & Interpret the following ratios by using balance sheet and income statement:......7
5. Explain the concept of management accounting and how it is vital for planning, controlling
& decision-making within the enterprises...................................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business economics is related to the shoes of the resources in an effective manner so that they
can contribute to the economy the economy of the country(Wang and et. al., 2020). Business
finance and economics are connected to each other as it focuses on the accounting system and
the economics is focuses on the factor which is directly related to the outcome of an
organisation. XYZ limited also analyze in a certain factors of economy that is impacting the
competitive benefit. This also ends up in the roads and significance of accounting and
management accountant with the layout and calculation of the classrooms which are needed in
the financial statement.
TASK
1. Explanation about the main determinants of macro or micro economic factors to showcase the
business performance in impact with the competitive environment.
XYZ limited is conducting various set of functions in the marketplace which Can be
impacting positively or negatively. This supposed to be an ineffective control level or in
controllable environment for better decision making. There are various factors in relation to XYZ
limited which are explained as follows:
1. Customers: XYZ is targeting a large scaling individual that can be business to business
business to consumer or globally recognized. They are basically influencing the overall
decision making for purchasing the items from outside world(Macellari and et. al., 2021).
These are the internal factors which can be controlled by meeting out the taste and
preferences of the people.
2. Suppliers: There are factors which is consistent In order to control the market area with
various business. If the supplier is setting a monopoly in the large market area then there
is a huge impact in the entire performance of XYZ enterprises. As the production services
become necessary for the business entity in order to offer a final product to the consumer.
3. Demographics: It is the concept of analyzing segmenting and targeting various market
strategies that influence lifestyle region culture then culture and age of the individual.
When the XYZ limited is choosing the appropriate target market by different allocation
strategy than they are in the form of stable performance.

4. Political: Every business are under the effective surveillance of the government and they
are regulating their business with the proper emphasized on rules and regulation which is
imposed by the government. When the XYZ limited is not following following obligation
and rules this mean they are disobeying are disobeying the laws which are showing a
negative influence on the entire business performance.
Economic Factors that affects competitive environment:
These are the factors which is connected to the good services and cash flow. Such factors
are showing the financial status of XYZ enterprises. There are various objectives of the scenario
which are given below:
1. Interest rate: These type of rates for various nations are impactful for its competitive
benefit. It can be changed from one place to another to another as the rating amount
specially shown in the certain banking institution for various transactions on money flow
for large loan in International business as well as the domestic use(Opute and Madichie,
2017).
2. Exchange values: This respective scaling is based upon the important export dealings in
the market which basically focuses on the present timing rates of transaction. Any kind of
variation at the time of important export can directly impact the overall functionality of
the business and also affect the competitive advantage in the target market.
3. Recession: When the recession increases in the economy then the organization had to
drop out their frozen level in order to match match the buying behavior of the customer
install overall profitability of the company.
2. Defining the importance of accounting within an organisation with respect to both reporting
and decision-making.
Accounting system is being used for measuring and summarizing the monetary funding
which is helpful in taking a appropriate decision in order to instantly a good financial position of
the company. XYZ limited is recording the data in their financial statement and income
statement portfolio. This reporting of data has been produced for the disclosure of the annual
performance of the company.
Role of accounting