Financial Management and Importance in Business

Business

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
SECTION 1.....................................................................................................................................1
Financial Management and its Importance..................................................................................1
SECTION 2.....................................................................................................................................2
Discussing financial statements and use of ratios........................................................................2
SECTION 3.....................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
APPENDIX....................................................................................................................................10

INTRODUCTION
The capital and equipment that what a group represents to accomplish its aims and
ambitions is referred to as corporate finance (Apa, Grandinetti and Sedita, 2017). From the
procurement of basic materials to the delivery of items and services to clients, firms require
financing. The acquisition of assets for the aim of meeting market requirements is referred to as
commercial finance. It supplies money for company operational expenditure requirements as
well as financing flexibility. This research includes money planning and selling price. There are
also differences in the balance sheet and the usage of ratios in revenue recognition.
SECTION 1
Financial Management and its Importance
The technique of managing an institution's money and accountancy processes is known as
economic administration. It guarantees that money are accessible to satisfy day-to-day corporate
requirements and that monies are spent wisely. Financial planning comprises, among many other
aspects, deciding on acquisitions, permanent quantitative easing, and revenue streams. It helps
with economic planning activities, structure, and administration. It also involves judgments on
investor returns on capital. It gives relevant data about the corporation’s profit or losses, and
expenses, enabling them to make educated choices. Management will be able to monitor
wherever the corporation's money is going and will also be able to save money. For the reasons
listed, fiscal planning is fundamental to a business's success:
Financial Planning: Economic administration help in the structuring of a company's
finances. It comprises, among many other aspects, arranging for company resources, budgeting,
and finance necessities. It helps companies prepare for difficult scenarios that happen as a
consequence of external factors. Finance planning aids firms in achieving their stated goals. It
controls the pricing, expenditure, credits, and earnings of the company (Babic, Fichtner and
Heemskerk, 2017).
Procurement of funds: Financial planning assists the business in collecting finances
from less revenues are generated that are suitable for the business size. For a business employee
to run efficiently, it needs money. It guarantees that money is accessible when a business
requires them. It is required for everyday activities, acquiring, debt payments, and input
materials purchasing, among some other factors.

Utilisation of funds: Financial planning assists a corporation's manager to make the
greatest use of resources by efficiently providing funding. It gives funding dispersal statistics
enabling firms to identify where the cash is spent and minimising costs.
Financial decisions: Economic reporting assists companies in determining economic
laws that influence the functioning of the company. So all of an element of the firm require
finances, investment choices will have an effect on the rest. Such decisions help the organization
to achieve its long-term goals.
Increase profitability: Corporate finance assists in the effective utilisation resources in
order to improve a company's economic performance financial plan, economic evaluation, as
well as other techniques are used to increase company's value by cost containment. Workers are
also encouraged to save, cutting the cost of obtaining funds (Cassell, Cunliffe and Grandy,
2017).
SECTION 2
Discussing financial statements and use of ratios
Balance sheet:
Amount
2016
Total
£0
Non Current assets
Intangible assets 5,793.
Tangible assets 52,812
Investments 10,693.
69,298
Current assets
Stocks 28,571
Trade debtors 26,367.
Short term deposits 14,779
Cash at bank and in
hand 14,632
84,349
Current liabilities
Bank loans and
overdrafts 9,610.
Trade creditors 19,493
Other Creditors 678
Income tax payable 3,585.