Financial Decision Making: Accounting and Finance Duties, Sources of Finance, and Performance Ratios

FINANCIAL
DECISION MAKING

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Task 1:..............................................................................................................................................3
1.1 Evaluate the need of Accounting and Finance duties, functions and roles in a company.. . .3
1.2 Elaborate different sources of finance that are available for small and medium businesses
for growth and expansion purposes.............................................................................................6
Task 2 :.............................................................................................................................................7
Compute important ratios for examining performance of company...........................................7
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The report prepared below takes in account assessment of accounting and finance related
areas which would assist and help the company and related business to grow in market. It further
counts sources of finance which helped in growth and expansion of company over a period of
time. The report prepared as under includes computation of certain ratios which would help to
examine efficiency and liquidity of a organisation for a certain time duration in market. It further
provides recommendations and suggestions to managers of the company as what measures can
be adapted for better working and functioning of enterprise in related market surroundings.
MAIN BODY
Task 1:
1.1 Evaluate the need of Accounting and Finance duties, functions and roles in a company.
Accounting department: It is a division in a company that is maintaining all the records
related to the finance of the company. The main function of the accounting department is
keeping records of day to day cash inflows and outflows also records fix assets, payables,
inventories etc.
(1) Financial accounting function : Finance accounting department prepare financial
statements like profit and loss account, balance sheet, ledger and cash-flows etc. Finance
department record day to day transaction and prepare reports for audit of company (Almutairi
and Quttainah 2020).
Importance of finance department :
 Finance department make reports which are used to prepare finance forecasting, budget
and other financial decision-making.
 It involve in the decisions like creditor's get paid on time and debtors made payment on
time. Finance Department ensure proper maintain of procedure of day to day
transactions.
(2) Management accounting function : Management accounting department make
conclusions on the basis of financial statements . Management accounting department conduct
Cost analysis, investment analysis and target consumer analysis (Amri-Asrami and Aghaei
2021).
Importance of finance department :

 Management accounting department is a very important unit who take part in future
planning and forecasting to achieve company goals.
 Management department is a decision-maker of the company. It take all the finance
decision regarding cost, expenses, creditor's and debtors
(3) Tax function: Tax accountant plays a very important role in preparing tax forms. Tax
accountant has to follow all tax laws and save money by legal deductions. It is a very important
function which connect company to government (Brooks Schopohl and Walker 2021).
Importance of tax function :
 Tax function provide safeguard to the company from future problem which are related to
the tax and government affairs.
 It is very important function to share tax reports with their shareholder to maintain
stability in tax system.
(4) Auditing function: Auditing is a function to check financial statements are accurate
or not. it is also states that all the functions are going to be well managed. Auditing function
highlights the error of financial statements. Generally auditor perform auditing after completion
of an year. There are many types of audits the most common are financial statements audits,
internal audits and tax audits.
Importance of tax function :
 Auditing function maintain accuracy of financial statements and eliminate the errors.
auditor checks existence of the assets of the company and prepare a report.
 Auditing plays a important role in reducing frauds and shows true position of the
company (Chesoli 2020).
Accounting department is a very important division and it is fully responsible for any
mistake in financial statements. Accounting department provide bookkeeping, advisory and
controller services to the business. Accounting department keep eyes on all financial
transactions.
Finance department: Finance department role is to manage and control finance of a
company. Finance department has power to take all financial decisions. Finance department
prepare future plans and strategy to achieve company's future goals which are pre-determined by
the company.