FINANCE FOR STRATEGIC MANAGERS
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Added on 2019-12-03
FINANCE FOR STRATEGIC MANAGERS
Added on 2019-12-03
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FINANCE FOR STRATEGICMANAGERS1
TABLE OF CONTENTSINTRODUCTION................................................................................................................................4TASK 1.................................................................................................................................................41.1 An assessment of the reason for which financial information is needed in business............41.2 Identification of business risks related to financial decisions................................................51.3Summary of financial information that is needed to make strategic business decision........5TASK 2.................................................................................................................................................62.1 Defining purpose, structure and content of published accounts............................................62.2 Interpreting information in these accounts............................................................................82.3Calculating financial ratios from the accounts and the way in which they support strategicdecision making...........................................................................................................................8TASK 3...............................................................................................................................................103.1 Difference between long and short term financial requirement of businesses....................103.2 Comparison between long and short term source of finance...............................................113.3Cash flow management techniques and assessment of the reason for which themanagement of cash flow is so important.................................................................................12TASK 4...............................................................................................................................................124.1 Considering different business ownership structures and roles and accountability of ownersand managers in making decisions............................................................................................124.2 Evaluation of methods for appraising strategic capital or investment projects...................13CONCLUSION..................................................................................................................................15REFERENCES..............................................................................................................................162
INDEX OF TABLESTable 1: Ratio analysis of Debenhams (In £ 000')...........................................................................9Table 2: Net present value for Project X.......................................................................................14Table 3: Net Present value for Project Y.......................................................................................14Table 4: Average Rate of Return for Project X and Y...................................................................15Table 5: Payback period for Project X...........................................................................................15Table 6: Payback period for Project Y...........................................................................................163
INTRODUCTIONManagement of financial resources plays a crucial role in accomplishing the businessobjectives of organization. Strategic financial management involves a defined series of steps thatincludes setting of business goals, identifying resources, analysis of data and finally, making thedecisions (Banerjee, 2015).In this project report, there is a discussion regarding the financial aspect of Debenhamswhich is one of the leading retailing companies of UK. The report gives focus on the comparisonbetween short and long term finance for business as well as on the importance of management ofcash flows and other financial statements.TASK 11.1 An assessment of the reason for which financial information is needed in businessFinancial information works as the heart of business. Financial information plays a veryimportant role in making financial planning and decision. Financial information is mainlycollected from various financial accounting statements. Financial statement like balance sheethelps in giving the exact picture of assets and liabilities which is important for the organization(Smit and Trigeorgis, 2012). It helps in identifying the exact financial position of business whichresults in making the final judgement regarding business expansion. Profit and loss account givesinformation regarding the wages that are paid out of the business and expenses that occur in thefirm. On the basis of financial information which is collected from the profit and loss account,Debenhams can identify the efficiency and performance of business. Through the informationtaken from profit and loss account or income statement, investors can evaluate the company'spast performance and can assess the uncertainty of future cash flow(Ball, Jayaraman andShivakumar, 2012).Financial information is needed to find out or to maintain the record ofsuccess of business. The financial information is collected from the financial ratio which helps inanalysing the actual performance of company as compared with its financial objectives (Wheelenand Hunger, 2011). With the help of financial information, Debenhams can measure or examinethe quality and position of business which helps in making assumptions for more successfulbusiness in the future. By collecting the financial information, true and fair presentation ofbusiness efficiency can be examined.4
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