Finance for Strategic Managers

Finance for Strategic
Managers

Contents

INTRODUCTION
Strategic financial management is a process by which company manages its finances to
by doing business operations in efficient and effective manner to succeed in enhancing its
profitability. Strategic managers of an business organisation shall required to have full
knowledge related to financial management which is essential for long term survivability of the
company. For better understanding of this topic, a company named Samsung Plc is given for
better understanding which is engaged in providing various electronic innovative products such
as smart phones, television and so on. Evaluation of financial statements of Samsung Plc is also
given in such report to asses the current viability of the company and making recommendations
based on such interpretation.
TASK 1
Evaluation of the sources of financial data that are utilised for knowing the business strategy:
Financial information of an company like Samsung Plc are very useful for it key
stakeholders to measuring the its business strategy which a company has made for its future
business operations. Such information is also help the company in evaluating its business
processes in finding that whether it perform well in achieve its goals and objectives (Gliedt and
Hoicka, 2015). some of the financial data that are helpful in identify its business strategy which
is as follows:
 Net cash available: Any company's net cash may gives information about its
financial fitness. More cash in hand in an organisation indicates that company has
utilising its financial resources in efficient and effective manner to generate more
cash for new investments (Ward, 2012).
 Revenue Growth: A good growth in company's revenue shall indicate that it has
performed its business operations in good manner and it indicates that company has
good scope in future and company has capability to succeed in the long run.
 Profitability ratios: It ratios provides the information about operational efficiency of
an company and provides the areas where company is required to take some
corrective actions. It may be helpful for various key stakeholders in knowing the
various information about the company's business strategy because it takes various
aspects of its operations such sales, profits in the given accounting period.
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Apart from it, there are some other source of finance such as:
Internal source-
 Internal accounting system - Internal control, as established in accounting and auditing, is
a process to ensure the achievement of the goals of an entity in terms of organizational
effectiveness and performance, accurate financial reporting, and adherence with laws,
regulations. By use of it information regards to financial transactions can be gathered.
 Payroll system - A payroll system covers anything related to worker salary and work tax
filing. It involves recording hours, estimating salaries, paying taxes and other
exemptions, copying and checking, and paying government jobs taxes This can be helpful
in order to assessing key financial information about outflow of funds.
External source-
 Suppliers- This can be defined as a group supplying goods or services. A manufacturer
can be differentiated from a contractor or subcontractor which typically provides
technical feedback to deliverables. In the context of providing financial information, the
suppliers play a key role. It is so because they have detailed information regards to
companies' paying efficiency and their revenues.
 Budget- It is also a key source of providing financial information. This is so because
under it estimated amount of income and expenditures is included and users can gather
needed monetary informations.
Assessment for need of financial data and information for formulation of business strategy:
In any business organisation, financial data is very beneficial as they provide the valuable
information about the such company to the management and helps the management staff in in
formulation of its key business strategy. Herein, below some financial information is mentioned
that is as follows:
 Profitability - Profitability is an ability to use its assets to generate income that covers its
costs In certain words, it is the capacity of an organization to make profits from its
activities. It can be beneficial in order to formulate the business strategies because
managers can assess key information about proportion of total income and costs.
 Cash flow- Cash flow is the net spending of cash equivalents to and from a company. The
ability of a corporation to build shareholder value at the most fundamental level is
defined by its ability to produce positive cash flows or, more precisely, optimize lengthy-
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