Financial Decision Making: Functions of Accounting and Finance Department and Analysis of Panini Ltd.

Module Code: BM414
Module Title: Financial Decision Making

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK-1............................................................................................................................................3
Part-a............................................................................................................................................3
Functions of Accounting and Finance Department.....................................................................3
Part-b............................................................................................................................................6
Sources of finance........................................................................................................................6
TASK-2............................................................................................................................................7
Part-a............................................................................................................................................7
Calculation of ratios for the two years.........................................................................................8
Part-b..........................................................................................................................................10
Analysis of ratios.......................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Financial decision making can be understood as the process of analysis the finances of a
company and making important conclusions on that basis. The present report is based on the
financial analysis of the Panini Ltd. It is a medium sized bread making company. It aims to
cover the functions of accounting and finance department and an analysis of the performance of
the company.
MAIN BODY
TASK-1
Part-a
Functions of Accounting and Finance Department
Accounting Department
The department in Panini Ltd. that manages the overall economic front of the company
by preparing financial statements, ledgers, cash-books, cash flow, Profit and Loss Accounts,
preparing of customer bills and many more. The accounting department in an organization plays
an important role in the functioning of a business and performs different functions within a
company (Abdulshakour, 2020). These are:
Financial accounting function
The financial accounting function plays an important role with the Panini Ltd. It helps the
company in periodically reporting the financial information to the internal as well as the external
users of the company in order to make important business decisions. It serves the users of the
information with the required details such as the amount which Panini Ltd. Owes to its suppliers,
the amount the customers owe to the company, the available cash, operating cost and payroll cost
of the company. All of this information that is prepared by the accounting department can be
used by the internal management of the company to formulate ratios in order to determine the
performance of the company.
Management accounting function
The management accounting function of the Panini Ltd. Is different from the financial
accounting function of the company (Santos, Pires, and Fernandes, 2018). This function holds
the responsibility to collect the information from both the sources i.e., internal sources and the
external sources of the company in order to make important business decisions. The main role of

this function includes establishing, coordinating and administrating an adequate plan for the
purpose of controlling the operations within the company. It administers the tax policies and
procedures, compares the performance of the company by differentiating between operating plan
and the standard plan of the company (Al-Delawi, and Ramo, 2020). The management function
of the accounting department also carries out the function of preparing important financial
reports that are presented to the government of a nation.
Tax function
The tax laws within the national boundaries of a country keeps on changing. Therefore,
there needs to an efficient person or professional within an organization that helps the company
in the calculation of the tax. Similarly, the tax function of the accounting department helps the
Panini Ltd. In carrying out a number of tasks which includes tax planning, preparation of tax
returns, constantly learn about new amendments that have been implemented by the government
and guide the company in regard to any kind of tax laws that are needed to be understood. The
tax function guides the Panini ltd. on how to formulate a strategy that will help the company in
reducing their tax burden. They determine the specific needs associated with the internal and the
external stakeholders of the company and develop certain tactics which addresses the needs of
the company and try to minimise the tax that needs to be paid as much as possible.
Audit function
The audit is an independent evaluation of the financial statements prepared by a company
in order to determine the financial accuracy and verify if the statements are fair and provides a
accurate view of the financial performance of the company or not. This function of accounting
department within the Panini Ltd includes both internal auditors as well as the external auditors.
The Panini Ltd hires internal auditors on their own in order to determine the financial
performance of the company and check whether the statements provide a true and fair view of
the company or not. First, the company hires the internal auditors for the purpose conducting the
audit if the internal auditors states any changes or finds and discrepancies that are to be clarified,
the company takes action for the same (Balasubramnian, and Sargent, 2020). Then after the
procedure of internal audit, the government of the nation appoints an external auditor for the
same purpose and find out whether the financial statements have been prepared in a true and
justified manner or not. The major reason behind conducting the audit is to monitor that the