Financial Decision Making and Ratio Analysis

FINNACIAL DECISION
MAKING

Table of Contents
TASK-1 FINANCIAL DECISION MAKING................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
Management accounting technique.............................................................................................4
Evaluation....................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1
TASK-2 RATIO ANALYSIS..........................................................................................................2
Calculation of ratios.....................................................................................................................2
Performance of SKANSKA PLC................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

TASK-1 FINANCIAL DECISION MAKING
INTRODUCTION
SKANSKA PLC is one of the famous construction company of the world and the UK. It was
started in 1984. It operates its function in many country including Sweden, Norway, Finland,
Denmark, Poland, Romania US and various other. The number of employees in the company is
approximately 32463 with an operating income of SEK 7.8 billion (Skanska UK in brief, 2021).
It performs its business operation in the field of construction project. It is counted as top
construction project handling company. Like other company, the role of accounting and finance
function also plays an important role in SKANSKA PLC too.
Accounting function refers to the function that is concerned with recording of financial
transactions along with preparation of financial statement. Likewise, finance is also an important
function that is concerned with financing activity of the company. through the performance of
this function an adequate availability of the money is being g ensured in every department of the
company (Pretorius, 2020). Performance of accounting function would enable the company
including the SKANSKA PLC to have an analysation of the financial performance, this means
that as financial statements are being prepared in the performance of accounting functions, so
through these statement company can make self-evaluation of its financial position. This will
also be beneficial for the other stakeholder including the shareholders, owners, investors,
customers and various other for determining the financial position and situation of the company
(Popescu, 2020).
In the same manner by performing the finance function along with its various associated
functions and decision in the form of investment, financing and dividend, companies including
SKANSKA PLC can determine and ensure the adequate availability of finance in the company.
Through the performance of this function SKANSKA can easily carry out its business operation.
it would not be wrong to said that performance of finance and accounting function including the
management accounting the company can take adequate decision and make future plan and
strategies.
This report will discuss about the concept of management accounting and its various
techniques including budgeting, costing, standard costing and various other. Management
accounting is also an important element of accounting that plays a major role in controlling and

decision making. This accounting is solely concerned with the managers and used for the internal
purpose. On the basis of this accounting the plans and policies are being determined. At last a
critical evaluation of the concept of management accounting is being included along with the
context of SKANSKA PLC.
MAIN BODY
Management accounting technique
Management accounting:
It is that part or branch of accounting that link the management with the accounting. This
means the accounting that is concerned with the use of management and for the internal use
would be counted as management accounting (Abdusalomova, 2019). It would also be right to
said that the information that is used for decision making is all related with the management
accounting. It is only be used for the internal purpose by the management of the company. in
simple words the management accounting means the presentation of accounting information in
such a manner that is being used by the managers in taking decisions and framing policies and
strategies.
Techniques:
Financial planning:
As the main objective of every business organization is to maximize its profit share. As,
management accounting help in financial planning, so by making the plan regarding the future
the company including the SKANSKA PLC can be directed towards the direction of its goal
accomplishment in the form of raising of profit.
Cost accounting:
This is also an important element and technique associated with the management
accounting. As under this accounting the cost that is being associated with the product, process,
department and various other are being determined that may act as a guide to the company in
order to determine the cost or the operation cost.
Cash flow analysis:
It is also an important technique associated with the management accounting. As per this
the movement of cash along with the period is being determined and analysed (Pradhan, Swain