Financial Decision Making in Business Organizations

Financial Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
1.1 Briefly estimate the Accounting and financial functions with the roles and duties within
the business organisation............................................................................................................3
1.2 Describe the several sources of finance which are used for development purpose to a
business entity.............................................................................................................................4
Task 2...............................................................................................................................................6
a) Calculate the financial ratio and perform analysis of the organisation...................................6
b) Comment on efficiency of Panini Ltd from the ratio calculated above..................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Financial decision making in an organisation can be described as process where managers make
choices regarding economics of business. Such decisions are related to investment, financing and
operations. Mangers uses various tool sand technique to make this decision. These decision
differs with respect to type of organisation (Bonsón, and Bednárová, 2019). In this report on
Panini Ltd there are two tasks, under the first brief on accounting functions utility in a business
organisation. Source of finance for short and long term requirement, its allocation. In the part 2
financial ratio are to be calculated and interpretation for the same have to performed.
Task 1
1.1 Briefly estimate the Accounting and financial functions with the roles and duties within the
business organisation
Accounting is system that is practised in an organisation to record and track their business
restriction that takes place. In every day operations are recorded in journals which is knowns as
journalising, then these entries are posted in ledger. From this journal and ledger financial
statements of the company is prepared knowns as trading, profit and loss account and balance
sheet. Interpretation and analysis is helped by the final records.
Accounting function: The main function of accounting can be described as follows
Maintaining financial records: Business enterprise have various transaction day to day, hence
there is need for tracking and recording the transaction. Such as selling, purchasing, income and
expenditure (Tiberius, and Hirth, 2019).
Observing financial activity: Accounts prepared based on principles and assumption which
ensures that fair transaction takes place in the organisation.
Expenditure tracking: When expenses and income are recoded on daily basis, cost can be
controlled easily. Slight over spending and losses can be caught and corrective actions can be
taken.
Management: Based on this accounts budgets are prepared, efficiency, productivity,
effectiveness of the operations can be judged. This accounts plays major role management of the
enterprise.