Importance of Accounting and Finance functions in SKANSA PLC

Financial Decision
Making

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Importance of Accounting and Finance functions, duties and roles in SKANSA PLC..............1
TASK 2............................................................................................................................................5
a. Calculation of of ratios for the company..................................................................................5
b. Comments on the performance of SKANSA PLC and position between two years...............7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Financial decision making could be defined as the process of formulating financial
decision for the business by paying attention towards different elements like annual report, final
accounts etc. For all the accounting professionals it is very important to make sure that they are
focused with effective execution of business as it can facilitate attainment of all the long as well
as short term business goals (Balushi, Locke and Boulanouar, 2018). Main of this assignment is
to enhance understanding of key elements that are required to be focused by all the companies to
formulate effective financial decisions. Present report is based upon SKANSA PLC which is a
construction company founded in year 1984. It is mainly established in United Kingdom and
operating in various other countries. This assignment covers various topics critical evaluation of
importance of accounting and finance functions, roles and duties within the enterprise. Apart
from this, different ratios are also calculated for the entity so that its performance for the years
could be evaluated.
TASK 1
Importance of Accounting and Finance functions, duties and roles in SKANSA PLC.
Accounting and finance is the main function of organization which is used to perform all
activities to attain the business goals. A process of identifying, collecting, classifying, and
recording the financial information concerning a business is considered an accounting activity
that is important for making the right business decision (Kaur and Lodhia, 2019). Every business
firm should be analysis the financial transaction and data that provide the right information and
manage the workings. In context to SKANSKA PLC, accounting and finance functions are uses
by management for running their business by tracking all income and expenditure that are related
to business which helps to increase the performance. Moreover, management implements
statutory regulation and providing investors and controlling overall expenses that increase
insights to operate a business successfully.
Types of accounting and finance function
Financial planning: This defined as prime function of accounting which uses to make
the financial planning in an organization. In SKANSKA PLC, management is responsible to
focus on financial planning by considering all financial transaction.
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Managerial accounting: It is the procedure of creating document and preparing reports
in relation to business. The management of SKANSKA PLC perform this function for making
the right business decision by preparing financial reports (Elbayoumi, Awadallah and Basuony,
2019).
Fund flow statement: This defined as financial document of organisation which uses by
chosen organisation to analyse company's balance sheet for the purpose of raising funds.
Cost accounting: This is another function of accounting which uses by SKANSKA PLC
for calculating the cost of specific project by involving all income and expenses.
Importance of Accounting and finance functions
Tracking income and expenses: Accounting and finance is the main function of any
organization which uses to analyse the income and expenses that occurred in business. This is
important for organisations to identify the expenses and manage the workings. In SKANSKA
PLC, management uses accounting and finance for tracking the income as well as expenses that
help to increase the profitability (Oktyawati and Fajri, 2019).
Proper planning for business: Finance and accounts is needed in organisation as it
helps to formulate the proper plans and strategies that can help to increase the workings in a
competitive market and complete the task. In SKANSKA PLC, accounting is much needed for
completing the various management activities successfully. In this, management mainly focuses
on cash planning, sales, development of business, fixing the target profits, and determining the
stock quantity which helps to manage all information.
Allocation of budget and resources: Different functions are needed to perform in
organization where it is important for management to make the uses of accounting and financial
data that can help to complete the task. The financial managers of SKANSKA PLC use finance
in allocating the budget and resources according to activities that can help to manage the
workings and complete the project on time (Karagiorgos, Alexandra, Ignatiou and Terzidou,
2020).
Outlining Long term goals: Organisation aims to grow and scale their activities high.
To do so, management is required to formulate long term plan considering more than 5 years that
helps to attain higher profitability. In SKANSKA PLC, management uses accounting and
financial information for expanding business and achieving the business goals. This tells where
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