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Financial decision making assignment | ALPHA limited

   

Added on  2021-01-02

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FIANANCIALDECISION MAKING

Table of ContentsINTRODUCTION...........................................................................................................................1Task 1...............................................................................................................................................1Importance of finance and Accounting department ....................................................................2Task 2...............................................................................................................................................4Techniques of management accounting for making sound decision...........................................4Calculation of ratios ....................................................................................................................5CONCLUSION................................................................................................................................8REFERENCE...................................................................................................................................9

INTRODUCTIONFinancial decision is the ending decision which is taken by a responsible person in ordermake sound decision. The manager of the company prepares financial statement with the help offinancial information. Every business organisation collects financial information that is used toshow the financial position of running industries. The main purpose of this report is tounderstand how business concern make financial decision and how to grow the business(Abubakar, 2015). For this Asda stores Ltd has been taken that is British super market retailercompany provides different types of products and services. This report will covered varioustopics such as difference between finance and accounting department and importance ofaccounting and finance function. Moreover, this report discusses about accounting ratio likereturn on capital employed, current ratio, debtor collection period and creditor collection periodof ALPHA Limited that is used to to take financial decision of company. It used a slogan that ismost popular “Save Money, Live Better” which influenced the people. SWOT Task 1Company's introduction: Asda stores Ltd is British super market retailer company whosales variety of products. It was founded in 1949 when super market owned by Asquith familyand merged with Associated dairies industry of Yorkshire. It was listed on London stockexchange until 1999 when it was acquired by the American retail giant Walmart for 6.7 GPB. Itis dealing in grocery, general merchandise and financial services. Its annual turn over is £ 791. 7million and number of employees are 165,000 who are working with Asda company (Ahmed,2015). SWOT analysis of Asda Ltd that shows opportunities and threat of company for growingthe business.Strength: It has wide range of products and services thathelps to attract the customers.It is British amazing market also providesfinancial services and customer delight.Asda has 150,000 employees and 500 stores atWeakness:It has global presence rather than othercompetitors.Lack of choice give a new competitor atmarket place. Asda is not able to accept the challenges1

global level. It also provide online and offline services.This is able to build a successful track recordto develop new products.present by new entrants. Opportunities:New trends in customer taste can open newmarket for Asda.Acquisition of small industries that help Asdato grow further. Threat: Conflicts among Asda and other retailerregarding prices.Pressure of reducing the prices of products andservices.Rules and policies changed by government thatmay be a bigger challenge for Asda. Importance of finance and Accounting department 1. Accounting department :Financial accounting: It is important in each business organisation that help to keeprecords of financial transaction and maintain it properly. It is maintain by the manager of theorganisation who collect information and prepares financial statement. Such as Asda Ltd issupermarket retailer who prepares financial statement that provides financial position of thecompany. By using this statement investors and creditors can evaluate the financial performancein order to make reinvest decision. Hence, financial accounting is important to get accuratefinancial statement which can not be underestimate (Gardiner and et.al., 2015). Management accounting: This means organisation used managerial accounting that isused to preparing management reports and accounts who provides actual and accurate financialinformation. Such as Asda's manager prepares management reports by using financialinformation and make long term decision. The managers can get financial decision that helps torun further business in order to growth of business. It is important because the manager can makelong term business decision and can expand the business by managing accounts. Tax function: This is important function for economy and organisation where companiescontribute a fixed percentage of earned incomes. This amount is used to built schools, pooreducation, hospitals, roads and other things that help to grow the economy by providing services.2

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