Finance for Managers: Financial Data & Strategic Decision Making

FINANCE FOR MANAGERS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 – Financial Data & Strategic Decision making.................................................................1
Sources of financial data helps in information business strategy................................................1
Need for financial data and the information for formulation of the business strategies..............2
Risk Related to the financial business decisions.........................................................................3
Review of method used for appraising strategic capital expenditures........................................4
TASK 2 - Discussion Paper.............................................................................................................4
TASK 3 – Information Leaflet........................................................................................................8
TASK 4 - Capital Expenditure Appraisal........................................................................................8
Decision related to the purchase or replacement of the piece of machinery...............................8
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Finance is a broad term describing the activities associated with the business like,
leveraging, banking, credit, debt, money, capital markets and the investments. Finance is an
important factor to be considered in doing business. It requires the business enterprise to use the
most efficient source of financing its activities. Strategic financial management deals not only
with the activities that are related with the management of finance but also with achieving the
growth and objectives of the enterprise in the most efficient manner (Kumar, 2017). Present
report is based in the study conducted over Samsung plc. Pietro Yon is required to prepare a
presentation based on the research of Samsung. Report will cover all the information regarding
the strategies of the operations. It will cover the financial analysis of the company and associated
risks involves in financial decision making. It will also provide the analysis of investment project
involving funds of the business. Report will provide about viability of investments. The research
will enable the Yon to deliver the presentation based on the research of company.
TASK 1 – Financial Data & Strategic Decision making
Sources of financial data helps in information business strategy.
Financial information refers to the information related with the financial data such as
equity, assets and liabilities. All the information related to these accounts are known as financial
information. Financial information is very important for the organisation as it provide the
company to make strategic financial decisions. Company is required to analyse the different
sources of finance that is used by managers for making strategic financial decisions. There are
main three sources from which financial data is gathered that are balance sheet, statement of
income & statement of cash flow.
Balance Sheet
It provides the information related with the physical and financial resources available
with company for carrying out its business activities. Balance sheet contains the list of financial
resources but do not provide how these resources are managed by the business. The internal
working strategies could not be analysed from balance sheet. Therefore performance of company
could not be measured using balance but only financial wealth or position could be assessed.
Though it provides important information related to the assets and liabilities of the business
enterprise that is essential for preparing strategies.
Income Statement
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It is an important source of the financial information that is used by management in
taking strategic decisions. It reveals the performance of company during the given period. It do
not provide information of financial condition but about the performance of company with
existing resources. it helps in assessing the future viability of the business. Income statements
represent the revenues and expenses of the enterprise and cost of goods sold (Adomako, Danso
and Ofori Damoah, 2016). Using this company analyses the profitability and expenditures of the
company. It could be identified what costs are being incurred by the company and the sources of
revenue.
Cash Flow Statement
Cash Flow statement is much similar to the income statement. This provides the
information related with inflows and outflows of cash of the business. Difference between
income statement and cash flows is that cash flow only accounts for non cash transaction that
reveals actual cash position of the company. It could be identified where the money is flowing
and what are the potential sources of inflow. This helps the manager in promoting the sources
that are more productive and are generating higher cash. At the same time areas with high cash
outflows are controlled by applying cost efficient strategies.
Need for financial data and the information for formulation of the business strategies.
The financial health and position of the Samsung could be analyses only using the
financial data. Without using the financial data it is not possible for the managers to frame its
strategic policies. Strategies are framed after analysing all the financial data that are associated
with the business. experts are managers could identify the performance and position of the
company. Financial data is used mainly for analysing the following data for framing business
strategies.
Liquidity
Liquidity refers to the ability of firm in meeting short term obligation with current assets.
It is related with cash availability with the business. It could identify the business strategies only
after assessing the liquidity of firm. A company without adequate liquidity cannot carry out its
operations adequately (Bolland, 2017). Cash is required to carry out its daily business operations.
Before framing any business strategies it is essential to identify the cash position, whether
company will be able to carry out its operations smoothly. It could be identified that management
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