Importance of Accounting and Financial Functions in Decision Making

Business
Decision
making

EXECUTIVE SUMMARY
This report is about financial decision-making in an organisation that leads to how
managers makes strategic decisions for its daily activities. Every firm has two departments,
Accounting department records accounts payables and receivables, income and expenses,
inventory, fixed assets and other financial tools. The finance department is responsible for
managing cash flow that ensures a firm that it has enough funds to meet the day to day activities
within the organisation. Firm uses ratio analysis in order to know its financial performance and
financial position.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Importance of accounting and financial functions, duties and roles within the organisation:.....4
TASK 2 ...........................................................................................................................................8
Financial analysis of Skansa PLC with significant ratios:..........................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Financial decision-making refers to process of decisions related to liabilities, bonds and
issuance of equity. The financial decisions involves that how and where the money can raised
from the firms money, such as share capital and retained earning. It is about how, when and from
where a company can acquire fund. Better financial decisions helps business to expand its
business and make profitability. These decisions are taken by CFO and finance manager of the
company. It includes, fund raising, investment decisions and merger and acquisition related
decisions (Bouzguenda, 2018). These decisions are important because it helps organisations for
long term growth, concerned with long term assets. Decision making helps to utilisation of
resources available to business for accomplish its objectives. The firm which is selected for this
report is Skansa PLC. It is construction based company, founded in 1984, headquarter situated in
UK. This report covers topics such as accounting and financial management their functions,
duties and roles. Apart from this it also covers topic such as financial ratio analysis and their
importance.
TASK 1
Importance of accounting and financial functions, duties and roles within the organisation:
Overview of the firm: The company Skansa PLC is a construction based public limited
company. The firm was founded in 1984, situated in UK. This uses accounting and financial
functions for its decision-making such as financing, investing and managing finance.
Accounting department: Accounting is all about measurement, processing and
communication of financial information related to business and corporations. Accounting can be
divided into various parts such as financial accounting, tax accounting, auditing and costs
accounting. This department serves services such as financial support in an organisation. By
developing accounting department, a firm can ensure its transparency in transactions related to
finance, providing specialisation and support to managers. Accounting department helps in
overall organisations functions to provide them monetary transparency to run activities. It helps
in making financial statements such as cash flow, income statements and balance sheet. To
running business, it needed to data, records, analysis, reports and proper information related to
its income, liability and assets (Chambers, Echenique and Saito, 2016). Accounting information
is important for management team in order to better decision-making. This helps employees to