Finance in Leadership and Management

FINANCE IN LEADERSHIP
AND MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
1. Explaining several users who are interested in the financial information of an enterprise and
the reason behind their interest 400.............................................................................................3
2. Critically analysing the ways in which financial information is been communicated to all
the stakeholders 400.....................................................................................................................4
3. Explaining and determining various types of the financial data and an information that is
needed for the purpose of decision making in a contemporary organization 500.......................5
4. Evaluating and comparing different final reports and discussion an appropriate accounting
concepts and the framework that is been used in producing it.700.............................................6
REFERENCES................................................................................................................................1

1. Explaining several users who are interested in the financial information of an enterprise and
the reason behind their interest
Company management- The team requires to understand cash flows, profitability and the
liquidity of an enterprise each month in order to makes an operational and the financing
decisions for the Anglo American company.
Competitors- They act as the main users of the final reports of the company for the
purpose of evaluating its financial state (Voss, 2019). Through this information, competitor
could be able to gain effective strategies for achieving competitive edge.
Customers- They review the financial information at the time of considering or deciding
which of the supplier in selecting for the major contract. This helps in judging a financial ability
of the supplier for remaining in the business for longer period to facilitate mandated goods and
the services in a contract.
Employees- An organization might elect in providing its final reports to an employees in
addition with the detailed description of the document. This is required by the employees for
assessing the performance of an enterprise and is used for increasing level of an employee
involvement with gaining an understanding of the company's business.
Governments- They are also seen as the major users of the final reports as they review
the financial statements of Anglo American company for determining that it is paying off its all
the tax obligation and is complying with all standards that are provided by IFRS and GAAP.
Investor analyst- An analyst shows a keen interest in the financial statements for
deciding that whether Anglo American Firm could be recommended to the clients in respect of
making the investment in an entity's securities.
Investors- They requires financial information as they are counted as owners of the
company and desire for understanding or assessing the performance of the investment made by
them (Lakis and Masiulevičius, 2017). This also helps them in making the suitable decisions
relating to withdrawing or making further investment.
Lenders- An institution that is providing the loan to the company needs financial
information for estimating an ability of borrower in paying back all the borrowed funds and an
interest related payments.

2. Critically analysing the ways in which financial information is been communicated to all the
stakeholders
Specifically, financial information is been communicated to the different stakeholders by
way of preparing the financial statements. Framing of final reports includes the statement of the
financial information, income statement, cash flow statement and the statement of the
shareholders equity (Prasad and Chand, 2017). Ideally, each and every statement comprised of
the set of a financial information that assist an organizational stakeholders in making the
decisions that are most suitable and best for Anglo American corporation. Balance sheet is the
statement that list down the liabilities, assets and an owners equity of an organization. The
income statement reflects an information relating to the income and the losses of business
whereas cash flow statement depicts movement of the cash and the balance of cash and cash
equivalent of the firm. In such statements, management facilitates an overview involving all the
judgements in relation to operations of Anglo American and any of the concerns over a future.
Financial statements are seen as the ventral feature through which an accounting
information could be communicated to all the organizational stakeholders. It is seen as helpful in
thinking of such statements as the models of the business organization because it attempts in
showing a business in the financial terms. These statements gives an overall picture regarding an
income, assets, liabilities, expenses and the shareholders equities or the reserves. Final reports
facilitates a useful information in context of credit and the investment decisions and also in
analysing the prospects of the cash flow (Kulikova, Gubaidullina and Elsukova, 2016). It
provides an information about the resources of Anglo American, Claims to such resources and
the changes in resources.
Moreover, by using the ratio analysis tool also, a firm could be able to convey the
financial information to all types of the users. This tool helps in making the comparison of the
financial performance and the position of an entity in the present with that of the previous
periods (Gulin, Hladika and Mićin, 2017). There are various types of the accounting ratios that
includes profitability ratios, liquidity ratios, efficiency ratios, solvency and the leverage ratios
which acts as the true measure through which a financial information can be assessed of Anglo
American.