Financial Decision Making: Function of Accounting and Finance, Sources of Finance, and Ratio Analysis of Panini Ltd

Financial Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1 ...........................................................................................................................................3
1.1 Discuss the function of accounting and finance and explain the roles and duties in the
businesses enterprise...................................................................................................................3
1.2 Ascertain the various sources of the finance that is utilized for the expansion purpose in
businesses enterprise. .................................................................................................................5
Task 2 ..............................................................................................................................................6
a) Compute the accounting ratio and measure the analysis of the company...............................6
b) Discuss on the efficiency of Panini Ltd from the computation of the ratio............................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Financial decision-making is the procedure of an organisation to select the options
regarding the businesses economics. The decisions can be related to the investment, dividend
and the financing. In this Panini ltd company is small sized enterprise and established in UK. Th
e manager of the company has analysed the importance of the finance or accounting in the
company. The finance manager has used the several tools and method to take the relevant
decision (Braun, and Sieger, 2021). Company has estimate accurate source of fund for raising the
money. There is the segregation of the funds for the long term or the short duration of the time.
In the last part there is the calculations of the financial ratios to measure the performance of the
enterprise. It also helps to know the profitability ability of the businesses.
MAIN BODY
TASK 1
1.1 Discuss the function of accounting and finance and explain the roles and duties in the
businesses enterprise
Accounting is the procedure of recording, sorting, summarising, estimating and
interpreting the financial transaction to the users. The first stage is recording the transactions of
the daily operations is called journalising. The next step is to post the transactions in ledger.
From this classification of accounts company make the trial balance. The finance manager
prepare the income statement or the balance sheet from the trial balance. These financial reports
is used by the internal or external users.
The importance of accounting is discussed as follow:
1. Tracking of monetary data: The basic objective of the financial accounting is to record
the monetary transactions is called the bookkeeping in the financial term. These uses the
double entry concept in financial data. It is the most important concept for the owners of
the small businesses to think about the methodical insight for taking the relevant
decisions (Caruana, and Farrugia, 2018).
2. Comparison of financial information: There are two techniques comparison and
analysis is used to estimate and to investigate the documents. It helps to evaluate the
several investment proposals by using the accounting information. It is used to calculate

the financial ratios which based on the businesses self data and it helps to compare the
performance of one entity with the other rivalry firms.
3. Transfer of information to the internal users: The purpose of the financial events is to
provide the information to the internal clients and to maintain the coordination between
the finance department (Duan, 2019). The businesses uses this monetary data to find out
the deficiency of the staffs and the capacity of the workers to increase the productivity of
the employees. This give the brief overview of the employee performance towards their
targets.
4. Prepare the budgets and predictions: The other reason for the preparation of financial
accounting is to build the budgets. It will give the deep examination of the how much
funds company is using on the expenses. From which source organisation will get the
money. It helps in the proper allocation of the funds on various divisions. It aids in
analysing the current and the previous financial data of the businesses for comparison. It
guides us to learn from the past mistakes.
5. Follow the principles and complying the laws: It is not furnish advantage in accounting
but this is essential to comply the rules and the regulations to ignore the legal issues. It
aids in computing the taxes of the businesses. The compilation of all the monetary data in
systematic manner helps in filling the tax return. Therefore, financial information aids in
to pay the taxes on the time and to prevent them from any legal issues or the irregular
audits.
Duties and the roles of the Financial information in the entity
1. Transparency: It means that all the financial data should be recorded in the books in fair
and transparent manner. It is noted that there should be disclosure of all the monetary
transactions and not should be kept hidden. Company can not do bias-ness in their
accounts to influence the investors decisions (Demina, and Dombrovskaya, 2019).
2. Legality: The organisation prepared the accounts of each kind of businesses and it is
based on the accounting principles and the standards. It is necessary for the business to
include the accounting standards to achieve the integrity in the records. Company must
follow the accounting rules and the regulations of the company.