Financial Decision Making

FINANCIAL DECISION
MAKING

TABLE OF CONTENTS
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
TASK- 1......................................................................................................................................................3
Accounting Functions..............................................................................................................................3
Finance Functions....................................................................................................................................3
TASK- 2......................................................................................................................................................3
Ratio Analysis.........................................................................................................................................3
Interpretation...........................................................................................................................................3
CONCLUSION..........................................................................................................................................3
REFERENCES..........................................................................................................................................3

INTRODUCTION
The present report is based on the topic financial decision-making which is the process of
making crucial decision that are made by the financial manager which are related to functional
mix of the organization. They are also related to borrowing an allocation of the funds data
required by the company at the time of making investment decision. The chosen form of the
report is Skanska PLC Which is the construction company in United Kingdom and was started in
the year 1984. The report will discuss about the importance of accounting and finance function,
duties and roles within the organization along with it will also evaluate examples of the company
in which both the appropriate functions perform. The report will also evaluate about the financial
statement that is used to calculate the ratios for the performance of company as per the investor
perspective.
MAIN BODY
TASK- 1
Accounting Functions
1) Financial management
Financial accounting is termed as the process of summarizing, recording and reporting
company’s business transactions that is through financial statements. It includes statement
related to the balance sheet, the income statement, the statement of retained earnings and the
cash flow statement. On the other hand financial accounting is also known as the process of
preparing financial statements of the company which helps them to show what is the financial
performance and the position of the members to the creditors, suppliers, customers, investor end
stakeholders that are outside the company (Kraus. and Feuerriegel, 2017). It plays important
distinctions for managerial accounting as it involves preparing detailed reports of the budget of
the organization along with forecast for manager who is inside the company. For the
organization it is important because it helps then to track what is the financial transaction in the
organization. However they can also take the decision that is how to allocate their resources in
addition to that it also helps in communicating business finances with outside parties better
known as creditors and investors. The main aim of the company is to do financial accounting is
that it shows the financial statement which provides all the information to the other parties which
will encourage them to contribute or come in partnership with the business.
2) Management accounting
It is the method of starting organization goals in the form of measuring; interpreting,
identifying, analyzing and giving information to managers is termed as managerial accounting or
can also be called as call management. Management accounting mainly gives attention to all
accounting works which aimed to informing management regarding operational business
metrics.it includes information linked to service purchase by the company or the costs of
products. Budgets are made to quantify the decisions which are used in operational planning.
Managements of accountings practice the performance reports to note the changes between the
actual results from those budgets (Lusardi, 2019). According to the Institute Of Management
Accountants: management accounting is known as the process which takes partners together in