Financial Decision Making for Skansa Plc: Importance of Accounting and Financial Functions

FINANCIAL DECISION
MAKING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Task 1...........................................................................................................................................3
Part 2............................................................................................................................................6
Interpretation of ratio analysis.....................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Financial management is a practice comprises with managing the financial position
associated with the business organisation. This report is based on the case study of the Skansa
Plc in context to management of its finances. The organisation initiated its business operations in
the year 1984. The entity is further planning to expand its business operations in Europe over the
period of last 10 financial years. The role of the project is to give emphasis over the financial
management practices adopted by the organisation. Henceforth, report will give emphasis over
the importance and role of the accounting and financial functions in the organisation. Different
accounting techniques will also highlight that support the business venture to depict about the
financial position of the business entity. Furthermore, use of ratios will project along with
indicating about the significance of the ratio. Role of financial accounting will also be projected
in context to both reporting and decision-making aspects.
MAIN BODY
Task 1
Accounting and financial functions are among the most prominent functional directions
associated with the Skansa Plc. Following are the points demonstrated as the role, importance
and functional functions associated with the accounting and financial operations adopted by the
business venture.
It improve decision making of company
The role of accounting and financial management is to take strong decisions related to the
business operations and processes adopted by the organisation. Techniques like ratio analysis,
investment appraisal and many such support the Skansa Plc Company to make important
business decisions that can maximise the overall growth of the business unit (Mohamad, Azad
and Sifat, 2021). Decision making is always a key tool that allow the business unit to strategies
the growth of the venture. Financial resources are limited in number that allow the organisation
to process with the functions of financial management for demonstrating the current financial
situation of the business unit.
Improve utilisation of funds
Financial and accounting operations favour the Skansa Plc Company to improve
utilisation of financial resources available with the company. Financial resources are limited in

number which allow the business entity to make strong decisions in context to utilisations of
finances in the business operations. Investment appraisal is a technique that is use by the Skansa
Plc Company to make strong decisions in respect to utilising all different financial decision-
making (Kliestik and et.al., 2020). This involves making decision over utilising the funds and
various other decisions related tom channelising the funds in all different investment options
available with company. Availability of the limited financial resources motivate the business
entity and financial professional to ensure the best use of funds in order to channelise the
business operations.
Improve growth of company
Role of the financial management practice is also under to improve the growth of the
business venture. The role of the accounting and financial management practice is under making
important decisions on the basis of the financial requirements and needs of company. The role of
the financial management practise is to improve the overall growth of the business venture.
Financial management as a strategic choice improve the utilisation of funds in channelising the
business operations of the Skansa Plc Company (Cagle, 2020). This creates a huge scope for the
business venture to maximise the profitability and growth rate of the business venture in against
of delivering the business operations. Enhancement of the growth of the company can be denoted
as the key strategic outcome associated with financial management practice adopted by the
business entity.
Provide liquidity in operations
Role of the financial management technique ensure the proper liquidity in the business.
Management at the Skansa Plc Company drive its liquidity situation in against to ensure the
availability of proper liquidity situation at the business unit. Liquidity denotes the availability of
proper finances in order to deliver the business operation. Ratio analysis is a technique that is use
b y the company to ensure the liquidity requirements. Liquidity is among the key requirement
associated with the business entity (Susanti, Ardana and Sufiyati, 2021). The role of liquidity is
important for the organisation to ensure the proper availability of funds in the operations.
Allocation of proper resource improve the quality of operations entertain by the organisation.
Operational effectiveness is among the most prioritise operation and function entertain by the
organisation to ensure the best level of functional efficiency in the operations.