Importance of Financial Management

Importance of financial
management

Contents
INTRODUCTION...........................................................................................................................3
SECTION 1.....................................................................................................................................3
Concept of financial statements & importance of financial management...................................3
SECTION 2.....................................................................................................................................5
Difference types for financial statements and ratios....................................................................5
SECTION 3.....................................................................................................................................6
Company’s key finance performance indicators:........................................................................6
SECTION 4.....................................................................................................................................7
Discuss the process which business use for improve its financial performance:........................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The practise of managing and controlling funds, and several other financial forces, is indeed
business finance. This field is particularly concerned with the procurement of useful natural
resources, products, and advantageous additives that help an industry's overall benefit improve.
Internal divisions evaluate the corporation's income success and standing over the span of a
calendar year using a number of financial statements (Adiandari, 2020). This essay discusses the
importance and concepts of FM, along with usefulness of accounting documents and profitability
ratios. Compute the financial statement, balance sheet and related ratios for the case study to use
the Business Review Model. Moreover, measure the financial statement and capital structure and
used the Business Review Template, and explain the related ratios to the case study.
SECTION 1
Concept of financial statements & importance of financial management
Financial management assist with assessing real expenditures, sales, profits, liabilities, and
investments, providing for better rational decisions to increase competitiveness. The three main
financial statements tend to also be the cash flow statement, income statement, and capital
structure, that help in the process determinations of all accounting practices in relation to
quantify a financial reward or production. That the majority of these kind of financial statements
are compiled using the proper global economy or form, making the transition to audit
committees easier. The report presented in order to assemble a unique balance sheet claims to be
management accounting. Financial statements tend to be documents created for formal
accounting reports as well as evaluating the status of the company's operations, regarding
profitability. Financial statements would be used in corporations (Atil and et.al, 2020). Net
profits are used to calculate a company's sales revenue on a financial operation. The financial
power is a list of the company's revenues that indicates the supplier's revenue and expenditures.
Such remarks aid the organization's understanding of its situation. Accounting statements are
kept in the form of a journal, and even a ledger that tracks the company's performance. To
evaluate a company's market share, the percentage approach is used. For a better interpretation,
the following are the key applications of this declaration: