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Financial Decision Making - Tesco Assignment

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Added on  2021-02-21

Financial Decision Making - Tesco Assignment

   Added on 2021-02-21

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Financial Decision Making - Tesco Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Critical analysis of accounting and finance functions related to their role within an organisation:1TASK 2............................................................................................................................................4Calculation of ratios and analysis of financial performance of Alpha Limited:....................4CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
Financial Decision Making - Tesco Assignment_2
INTRODUCTIONFinancialdecision is a crucial decision that are made by finance manager of anorganisation for providing funds to such company for running its several business operationseffectively and efficiently. It may be said that finance decision is the life line of a company, thisis the main reason of having financial department within an organisation. Accounting is also animportant term that plays a vital role in overall success and survivability of a businessorganisation (Kim and Upneja, 2014). Tesco which is a retail sector organisation taken for firsttask. Key financial decisions and marketing functions which are essential in terms of managingthe accounting and finance department also defined in this report. Accounting department of acompany provides a way for recording and summarising its finance related transactions. Forbetter understanding of this, a company named Alpha Limited is given which is engaged inmanufacturing activities and two year's financial statements of such company is given tocalculable the various ratios for analysis of its financial performances. This report also providesthe several roles of accounting and finance within an organisation. TASK 1Critical analysis of accounting and finance functions related to their role within an organisation:Finance and accounting functions in TESCO plays vital role in providing smooth way toenable the running its business activities effectively and efficiently. It is important for to adoptand implement both the functions as both are necessary and gives useful information to thecompany in various matter. The detailed discussion about these two terms (i.e. accounting andfinance functions) are as follows:Accounting function:Accounting may be defined as systematic and comprehensive recording of financialtransactions related to its business. In other words, it may be said that it is process that helps themanagement of Tesco in summarising, evaluating and reporting of company's monetarytransactions. Lack of accounting system an organisation not be able to consolidate the financialinformation and the financial decision in effective manner. Thus, it can be said that in success ofan enterprise, there is a huge role of accounting function (Kliger and Gilad, 2012). The severalroles and importance of such functions are as follows:1
Financial Decision Making - Tesco Assignment_3
Beneficial in keeping organisation's record: By the help of accounting function, anorganisation may keep a record of its day today transactions which can be help thecompany preparing its financial statements. Also these records assist the company inconducting its audit and comply with its various legal and regulatory requirements. Withthe help of these records, it may help the company in taking effective decision related toits present and future business operations (Schniederjans and Schniederjans, 2013).Decision Making: It is very useful to take decision related to various field of its businessactivities. Role of decision making in Tesco is to evaluate the best investment andstrategic options for better management and control. If an organisation need to evaluatesits past years’ business records for making budget for future period. This requires to takedecision accordingly in future perspective to enhance company's profitability andattaining its goals and objectives (Tridimas, 2012).Assist in execution of important functions and planning:Accounting function pays a vitalrole proper execution of several key functions of Tesco. Planning of various activities inan organisation may be done by the help of accounting department which the major roleof planning process with in organisation. For example, cash related planning, salesplanning to find the quantity of stock required for its manufacturing process and forfixing the profit and pricing level.Co-ordination: The foremost task of a management staff of Tesco is to establishing thecoordination between several activities of such company to achieve its desired targets.Accounting assist the company in coordinating the activities of different departmentwithin an organisation. It also assists the company in adjustment of purchase with sales,an expenditure with income and so on (Correia, Dussault and Pontes, 2015).Assist in preparing the financial statements: Accounting helps the firm like Tesco in settingup its annual reports that incorporates profit and loss account, balance sheet, cash flowstatements and two different things. By the assistance of accounting department of Tesco, anorganization may record its different monetary transactions identified with business thatfurther help in recording and trial balance and finally helps in setting up its budgetsummaries for its future business operations.Finance function:2
Financial Decision Making - Tesco Assignment_4

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