Financial Decision Making Assignment Solved (Doc)
Added on 2021-02-18
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FinanceEconomics
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Financial Decision Making
Table of ContentsINTRODUCTION...........................................................................................................................2MAIN BODY...................................................................................................................................2TASK 1............................................................................................................................................2Importance of accounting and financial department and SWOT analysis of Unilever...............2TASK 2............................................................................................................................................5Calculation of ratios of Alpha Limited company........................................................................5CONCLUSION ...............................................................................................................................9REFERENCES .............................................................................................................................101
INTRODUCTIONFinancial decision making is very crucial aspect of the organization as it relates with thedecisions to be taken regarding the sources of raising the funds, allocating the funds and usingthe funds optimally so that larger profits can be gained. It involves the risk associated with theraising of the funds and helps the firm in mitigating such risk which in turn develops thecapability in coping with any uncertain situation or event. The basic financial decisions thatevery managers of the company includes the investment, financing and dividend decisions. Thepresent study is based on the Alpha Limited company, a manufacturing company, established inUK during 1975. This company has been planning for making expansion in its operation in othersegments of the UK in next ten years. Furthermore, the report includes the functions relating tothe accounting and finance within the organization. The study also describes the performance ofthe Alpha Limited through the computation of the ratio analysis for its two consecutive years. MAIN BODYTASK 1Importance of accounting and financial department and SWOT analysis of Unilever.For this case, the company chosen is Unilever Plc. Unilever is a British Dutch companyproviding transnational consumer goods which is founded by Lever Brothers and MargarineUnie on 2 September 1929. The company is having its headquarter in London, United Kingdomand Rotterdom, Netherlands. Unilever is engaged in a manufacturing business and provides widerange of products across the globe and to its customer worldwide. Its products includes Food andBeverages, Beauty products, Cleaning agents and Personal care products. Basically, thiscompany is engaged in manufacturing of Consumer Goods in approx 190 countries. Currentlythe company is employing approximately 155,000 till 2019. The overall Revenue and NetIncome for the year 2018 of Unilever is £50.982 billion and £9.808 billion respectively. SWOT Analysis for Unilever PlcStrengths - Strong and effective advertising, marketing and promotional activities. Unilever hasexcellence in providing Corporate Social Responsibility initiatives and activities towards thewelfare and development of the society in which it is conducting its business operations.Company is providing wide portfolio of brands, product mix and diversified range of products as2
per the taste and preferences of consumer. Due to long run existence has lead to creation of brandpopularity and acquisition of market share. Also, the company is having high economies of scalewhich provides support in improving and increasing the production efficiency leading tocompetitive pricing strategies (Gürel and Tat, 2017).Weaknesses – The products provided by Unilever is of Imitable nature as a result of which othercompetitor firms are taking advantage of it and entering into the market. This has resulted intoincrease in market competition and restricted pricing which in turn has lead to low profitmargins.Opportunities – Unilever has the opportunity to enter into business other than consumer goodsindustry by making diversification of products especially for health conscious customers. Thisidea of health product innovation can leads to increase in consumer attractiveness. Also, Unileverhas the opportunity to develop and increase its market share, revenue amount by selling oroffering its current products into new market segments or areas. By making business moresustainable and environmental friendly, it can help company in attracting and increasing itscustomer base who are more conscious about environment.Threats – Unilever has to face tough competition in the market because of which it has resultinto decline in the market share and financial performance level (Santos and Laczniak, 2015).One of the weakness of Unilever has become a threat for company which is its imitable nature ofproducts. Another threat for Unilever is increasing popularity and trend of the retailer houseboard, which Unilever is lacking. Accounting and Finance are considered as one of the most important aspect for everybusiness organisation. The term Accounting is defined as the process of identifying, recording,measuring, evaluating, classifying, making interpretation and communication of the financialinformation with the help of financial statements prepared of the company (Alexander and et.al.,2017). With the help of Accounting department, an investor or any stakeholders can makeanalysis of financial position of the company by having an overview of the profits and losssituation of a given time period. Accounting department provides correct valuation and definetrue value of business assets, owner equity and liabilities. The importance of Accountingdepartment is as follows:1.Financial Accounting – It is branch of accounting which keeps track record of the3
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