Financial Decision Making: Importance, Roles, and Ratios of Skansa Plc

FINANCIAL DECISION
MAKING

EXECUTIVE SUMMARY
Financial decision-making implies the decisions related to the optimum utilization of the
financial resources of the company. The project shows the various accounting and the finance
functions that are undertaken by the organization. It shall also ensure that operational efficiency
and the achievement of the organizational objectives. The ratio analysis of the Skansa Plc shows
that the company is on the downward graph.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK-1............................................................................................................................................1
Importance, duties and roles of the accounting and finance functions........................................1
TASK- 2...........................................................................................................................................4
(a) Calculations of ratios of Skansa Plc.......................................................................................4
(b) Interpretation of the ratios of Skansa Plc...............................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Financial decision making is focused with the management of the finances in a company
from the acquisition, sources, utilization, managing the costs and budgeting in the company.
These decisions are taken by the accounting and finance department of the company. This report
shall be highlighting the various functions that are played by the accounting and finance
department of the organization, and they shall assist in the proper decision-making in the
business. Apart from that the report shall be reflecting the ratio analysis of Skansa Plc and the
comparison in the performance that is generated in two years. Further it shall also recommend
upon whether an investor must invest in the company or not.
TASK-1
Importance, duties and roles of the accounting and finance functions
1. Accounting Department:-
 Financial accounting- This is one of the significant functions of accounting department
under which the transactions of the business are recorded, summarized and then
presented in the financial statements of the company. The financial statements of the
company include the primary books of accounts, profit and loss account, balance sheet,
cash flow statement and the statement representing the changes in the position of the
equity shareholders of the company. These financial statements are then analysed and
interpreted by the internal and the external users of the company and assess the financial
and the liquidity position of the company (Cockcroft and Russell, 2018). They can also
be used to facilitate comparison internally to find out the inefficient departments and
externally with the competitors that are there in the industry. The financial accounting is
further capable of meeting the various other functions of the business as on the basis of
these statements the planning and decisions shall be taken by the company.
 Management accounting- This is another major function that is performed by the
accounting department of the organization which is concerned with facilitating the
decision-making process in respect of the future operations of the company. Post the
financial accounting is undertaken the financial information pertaining to the statements
shall be communicated to the management of the company who shall use this data to
formulate the strategic decisions for the company which can enhance the performance
and lead to the achievement of the organizational objectives of the company. The
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