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FINANCE FOR STRATEGIC MANAGERSImportance of Cash Flow Management when evaluating proposals for capital expenditureEssentially, Cash Flow Management relates to the act of tracing money by analysing its sourcesand application in a comprehensive manner. For the purpose of evaluating proposals for CapitalExpenditure, analysis of this area is critical as it provides a detailed break-up of operating,investing as well as financial activities undertaken by an organisation. In the context of Samsung,in 2018, the company had the highest Capital Expenditure (CAPEX) worth $3.9 million in the firstquarter for facility investment. However, this amount was chipped down by 60% in 2019 for Q1mainly so as to moderate supplies during its bust phase. Such a proposal would include analysis offinancial statements of current as well as previous year along with additional information related tothe future plans and its various divisions. By analysing its Cash Flow Statements, Samsung'smanagement would be able to evaluate the viability as well as feasibility of various proposalsthrough application of techniques such as Net Present Value (NPV) and Payback Period amongothers.Recommendations and JustificationsIn the context of Samsung PLC, it is recommended that various methods such as Ratio Analysis aswell as Cash Flow Management enable the company's management to make informed decisions ina prompt manner. The rationale behind using such tools is that there ability to provide an overviewof all the activities in a concise and unambiguous way. Through their employment, Samsung'sbusiness manager will be able to achieve more in a lesser period of time as they would not have tolook at each and every variable to derive information regarding a particular area that is required tobe analysed for decision-making purposes.Impact of 'Creative Accounting' Techniques when making strategic decisionsCreative Accountancy mainly relates to those management practices which sought to exploitloopholes in financial regulations so as to gain favouritism in the eyes of their stakeholders in amisleading manner. One of the prominent technique under this discipline is known as 'WindowDressing'. This technique relates to the presentation as well as communication of financialinformation in a manner that boasts an attractive image of the company.While taking a strategicdecision related to capital budgeting with a purpose to purchase new asset or replace the existingone, Samsung's management may look at the current and historical financial statements which givesa quick review of performance in an effective manner.If such reports contain inflated ormanipulated figures, it may result in misappropriation of future cash flows that may cause Samsungto incur potentially heavy losses from a long-term organisational perspective as well as result inestablishment of unrealistic objectives for upcoming financial periods to achieve their predefinedgoals.Limitations of Ratio Analysis as a tool for strategic decision-makingEvaluating different ratios related to liquidity, profitability and leverage ratios amongothers helps in deriving valuable insights regarding various functional units by a business manager.However, this analysis is not free from limitations. In the context of Samsung PLC, theselimitations may arise in the following manner:Inflationary forces may distort Samsung's Financial Statements, which may result indrawing inaccurate conclusions that may be crucial for making important strategic decisions.Ratios only provide numerical figures and do not facilitate in provisioning of causationfactors. Thus, making managers of a business including Samsung to carry out additionalinvestigation to ascertain such reasons for the purpose of undertaking strategic decision-makingpractices.In the end, Ratio Analysis is only one methodology to analyse company's financial statements fordrawing inferences. Completely relying on such values may result in provide a fraction ofinformation for the purpose of decision-making by Samsung's business managers.