Business Finance & Economics Study Material with Solved Assignments

Business Finance &
Economics

Table of Contents
Business Finance & Economics.......................................................................................................1
Introduction......................................................................................................................................3
1) Outline the major determinants of business performance and distinguish whether these are
micro- or macroeconomic. Discuss the economic factors that affect the competitive
environment of an organisation..............................................................................................3
2) Explain the role of accounting within an business organisation and highlight its key
importance in accordance to both reporting and decision-making.........................................4
3) Distinguish between the major financial statements and explain the layout and terms used
within each Statement.............................................................................................................6
4) Calculation of ratios along with their interpretations.......................................................10
(5) Define management accounting and discuss how this is important for planning, control
and decision- making within an organisation.......................................................................12
Conclusion.....................................................................................................................................13
Books & Journals.................................................................................................................13

Introduction
Business finance and economics are considered as vital part of a hierarchical working of
a firm. Finance assists an association with examining the raw numbers that will at last assists an
association with dealing with all the monetary business activities to upgrade the presentation of
the business organization. In context to the report, monetary variables, economic techniques and
monetary handling of finances are clarified with a significant reasoning in accordance to the
dynamic business environment. This will basically be enlightening the use of application of
business finance and economics in a respective business organization so that it can attain the
business objectives in a more efficient way.
1) Outline the major determinants of business performance and distinguish whether these are
micro- or macroeconomic. Discuss the economic factors that affect the competitive
environment of an organisation.
A compelling business performance is profoundly significant for every one of the
organizations which fundamentally targets working of the business tasks and activities as per
adjusting the groups, supporting the advancement of the employees just as upgrading the general
performance of the firm (Mayer, 2018). The significant determinants of business performance
are referenced beneath that aides in accomplishing the goal of the associations are explained in
context to Tesco:
 Leverage: It can be characterized as a methodology for venture that can be utilized to
build the expected profit from the speculations through various monetary instruments and
acquired capital. It can likewise be called as a sum utilized by an organization to back
resources. It is considered as a micro factor since all the decisions are identified with
expanding or diminishing influence of the organization like TESCO.
 Liquidity: It can be characterized at the rate at which the monetary protections can be
purchased and sold in the commercial centre. It helps the firm to change over the
resources in to cash. Additionally, in context to Tesco liquidity can be considered as the
micro factor since this determinant is majorly concerned towards the inner matter of the
association.
 Inflation: It helps in the increment in the costs of the labour and products. Fundamentally
a part might impact the increment or decline in the buying force of a cash throughout
some stretch of time. In context to TESCO, this determinant is large scale or macro in

nature. The purpose for that is any fluctuation in the value of price levels will at last
influence the economy's buying power.
Economic factors influencing the competitive environment:
These variables are considered as most significant in the business. It assists a business
organization with understanding that these elements influence the competitive climate drastically
(Hasan, 2020). For various organizations, keeping a check on these variables and break down
them an opportunity to time to forestall a wide range of possibilities which might emerge in
future. The diverse economic factors are explained underneath in context to Tesco:
 Demand: It is one of the significant component that expresses that whether the item or
administration is needed by the clients on the lookout or not. In context to Tesco,
organizations is utilizing its different systems that can assist the organization with
utilizing various procedures in the competitive environment.
 Market Size: It is exceptionally significant for the organizations to have a major market
size as it will assist with getting enormous number of clients which will assist the
organization with expanding its overall revenue in the cutthroat business sectors. In
context to Tesco, a greater market size will assist the organization with getting greater
benefits to determine achievement in long run among the contenders.
 Suppliers: In order to stay in the tough competition in marketplace, it is highly
significant that the providers of the natural substances should be reliable with the quality
material which will at last assist the organization with giving the finished products to the
clients with next to no sort of deterrent. This will assist the organization with remaining
in the market competitively with consistent inventory with next to no obstructions.
2) Explain the role of accounting within a business organisation and highlight its key importance
in accordance to both reporting and decision-making.
Accounting can be characterized as the most common way of making records of the monetary
exchanges that are the result of the business' monetary activities (Wang and Zhou, 2021). All of
the monetary activities of a particular monetary period are recorded with the assistance of the
accounting.
Roles of Accounting