Financial Decision Making INTRODUCTION 3 TASK 13 1. SWOT analysis of the company 3 2. Importance of finance and accounting department 4 CONCLUSION 9 REFERENCES 9 INTRODUCTION Financial Decision Making

Financial Decision Making

Table of Contents
INTRODUCTION........................................................................................................... 3
TASK 1........................................................................................................................ 3
1. SWOT analysis of the company..........................................................................3
2. Importance of finance and accounting department ...........................................4
TASK 2........................................................................................................................ 4
Ratio analysis ........................................................................................................ 4
CONCLUSION.............................................................................................................. 9
REFERENCES............................................................................................................... 9

INTRODUCTION
Financial decision making is the decision made by finance manger of the company which
related to finance mix of the organisation. This decisions are concerned with allocating and
borrowing funds that are required to take decision on investment. The financial decision of the
company includes 2 sources in which one is about using company's own money which includes
share capital of the company, retained earnings etc. and the other source is borrowing funds from
outside the company in the form of denture, bond etc. the objective of financial decision is to
maintain efficient capital structure of the company. For this purpose the report will include
SWOT analysis of the company along with importance of financial and accounting department.
The report will also analyse different ratios of the company and will compare the years to
provide better understanding of the ratios and ways to improve it.
TASK 1
1. SWOT analysis of the company
Alpha company deals in UK which is a manufacturing industry which needs to be responsive and
adapt to changes that will occur in the market. The company needs to assess its internal
environment which will include the structure of organisation as well as resources availability,
operational costs etc. it is also important that company be aware about external factors which
includes social, economical, political aspects (Francis and et.al, 2015). The internal factors of the
company also includes staff, customers, culture etc. which are under the control of the business.
To stand out from the competitors I is must for the company to know its strength and weaknesses
along with threat and opportunities that are availing for the company. The SWOT analysis of the
company is as follows :
Strength – The strength of Alpha Ltd is its futuristic designs which attract the customers
and its good reputation among the companies as it is providing its services for more than 10
years. The another strength of the company is its increased ability to cope up with changes
means it really quickly adapts innovative techniques and procedure of the products. The other
strength of the company is its financial resources which gives it financial strength to invest in
manufacturing of other products or technologies.
Weaknesses – The weakness of the company is that its employees are not fully skilled
and their skills need to be upgraded. The other weakness is that it causes pollution to the society
which decreases the image of the company. It also has high production costs and outdated
machines as well which slower down the process (Geng, 2015).
Opportunity – The opportunity of the company is to have a training development
programme which can enhance the skills and quality of employees and can increase efficiency in
operations. The trends in increasing customer's purchasing power can also be an opportunity for
the company which can lower down the cost of production and can increase the profit of the
company.
Threats – The most important threat of the company is government regulations which
needs to follow by the company. The other threat can be that there can be entry of new

competitors as entering in the market is easy and also the trade fluctuation which includes
recession, inflation etc. can be a threat to the company.
2. Importance of finance and accounting department
Accounting department - Accounting department of the company is responsible for
recording, classifying and reporting cash flows of the company. It includes various functions
which are :
 Financial accounting – It plays a really important role in Alpha Ltd as it helps the
managers of the company in providing information to the external users. The owners of
the company communicate the financial information using balance sheet, income
statement, cash flow statement etc. to provide assessment of the company to its
shareholders. It helps the company in knowing where it stands in terms of reputation and
profitability with other competitors. It helps the company in analyzing competitors and
evaluating investment opportunities as financial accounting is governed by GAAP which
gives it standard method to analyse. It helps the company in computing financial ratios by
using financial statements and set benchmark for other companies.
 Management accounting – Management accounting is the part of accounting
department of Alpha ltd company which deals with providing internal information to the
managers of the company to make decisions related to planning, forecasting budget
preparation etc. It helps the company in making budget related decisions with the help of
historical data and marketing database ((Tschopp, 2015). This helps the company in
analyse its future performance and investments. It helps in controlling the work of all
other units of the company whether its production or marketing and make conclusion
about financial performance of the company. It also helps the company to conduct cost
analysis to determine the existing expense of the company and provide insight for future
activities.
 Tax function – It helps the company in managing strong framework for tax governance
and risk management. It helps the company in achieving tax reputation and minimising
risk of the company. It helps the company in planning tax and decision related to tax
deductions and to comply with government laws and regulations.
 Auditing function – The audit function plays an important role in the company as it
allows the company to increase its productivity by adding value to operations of the
organisations. It helps Alpha ltd in detecting frauds by assessing company’s daily audit
reports and uncover the fraud, waste of resources and money. IN alpha Ltd, the audit
takes place once in a year which helps it in have good corporate governance. It helps the
company in compliance with rules and regulations and timely reporting while collecting
data. It helps in monitoring risks of the company at multiple levels and implements the
strategies of the company efficiently.
Finance department – The finance department of the company manages all the fund of
the company. The finance functions of the finance department included planning, organising,
auditing, accounting and controlling finances of the company. This department is also