(Doc) Finance for Strategic Managers - Assignment

Finance for Strategic Managers
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
ACTIVITY 1....................................................................................................................................4
1. Assessing why financial information is needed in business....................................................4
2. Identification of the business risks related to financial decisions............................................5
3. Summary of financial information needed to make strategic business decisions....................5
ACTIVITY 2....................................................................................................................................6
1. Explanation of the purpose, structure and content of published accounts...............................6
2. Interpretation of the financial information in these accounts..................................................7
3. Calculation of financial ratios from the accounts and explanation of ways they support
strategic decision making.............................................................................................................7
ACTIVITY 3....................................................................................................................................9
1. Difference between long and short term financial requirements for businesses.....................9
2. Comparison of sources of long and short term finance for businesses....................................9
3. Cash flow management techniques and assessing why its management is important...........10
ACTIVITY 4 .................................................................................................................................10
1. Analysis of corporate governance, legal and regulatory requirements of different ownership
structure......................................................................................................................................10
2. Evaluating methods of appraising strategic capital or investment projects...........................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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Index of Tables
Table 1: Financial ratios of Sainsbury ............................................................................................7
Table 2: Proposal information ......................................................................................................11
Table 3: NPV of Project A.............................................................................................................11
Table 4: NPV of Project B.............................................................................................................11
Table 5: Pay back period of Project B...........................................................................................12
Table 6: Pay back period of Project A...........................................................................................12
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INTRODUCTION
Finance is considered as the life blood of the business which plays an imperative role in
success of the organization to a greater extent. With the assistance of financial information
organization's manager can take appropriate decisions that can act as an aid in achievement of
organizational targets (Hershey, Austin and Gutierrez, 2015). For the present study, finance for
strategic manager would be discussed with reference to Sainsbury. The present study entails to
understand the reason due to which financial information is being gathered. Further, it explains
the purpose, structure and content of the published accounts. Lastly, the report involves
evaluation of the methods for appraising strategic capital.
ACTIVITY 1
1. Assessing why financial information is needed in business
It is important for each and every business to prepare financial statements with the aim to
offer useful information about financial status of the organization. In order to build and maintain
the faith of stakeholders within the organization, they are required to prepare as well as publish
financial statement of the organization (Cox, 2004). With the assistance of financial information,
decision making can be effectively done by the financial manager. Through this, proper
utilization of the fund is ensured which results in achievement of success by the firm. Financial
statement offers wide range of useful information to several users. This includes:
 Managers: The executive of Sainsbury needs financial information with an aim to
manage the affairs of organization. This can be done by assessing the financial position
as well as performance. Thus, it assists in taking important decisions by the business.
 Shareholders: They require financial statements to assess the risk and return on their
investment within the organization (Barton and Wiseman, 2014). On the basis of analysis
they take investment decisions.
 Customers: These users of information require financial information to assess whether
the supplier possess resources to ensure quick supply of the products in future course of
time. Customers of Sainsbury have greater needs of financial data with an aim to take
appropriate decisions.
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