Financial Management: Approaches, Techniques, and Value

Financial
Management
TABLE OF CONTENTS

INTRODUCTION...........................................................................................................................3
Scenario A........................................................................................................................................3
Range of approaches, factors and techniques of effective decision making................................3
Stakeholder management and conflicting objective.....................................................................4
Value of management accounting cost control and maximizing the shareholder’s value...........5
Techniques of fraud detection and prevention.............................................................................6
Reflection.....................................................................................................................................7
Scenario B........................................................................................................................................8
Ratio analysis of J Sainsbury Plc for the year 2018, 2019 and 2020...........................................8
Data obtained useful in operational and strategic decisions making.........................................14
Investment appraisal techniques that will help in maximizing the return on investment..........15
Techniques useful in informed decision making........................................................................15
Analyzing financial decision making supports long-term sustainability...................................16
Recommendation how management can improve financial sustainability................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Financial management is essential part of every business organization organization or it
can be considered as a function of management with the main role is to effectively manage the
financial resources with respect to the procurement, allocation and application of it. This report
provides an insight about the value of management accounting techniques and approaches which
can be beneficial for the organization in terms of cost control and the increasing the shareholder
value. It also covers the ratio analysis of Sainsbury with the aim of evaluating its performance
and effectiveness of financial decision making in achieving long term sustainability.
Scenario A
Range of approaches, factors and techniques of effective decision making
For the business to be successful the most essential thing for the business is the proper
and effective decision making (Kadoić, Divjak and Ređep, 2019). This is essential because of the
reason that if the decision will not be taken in proper manner then the working of the company
will not be good. For taking effective decision there are different approaches, techniques and
factors affecting it which are as follows-
Approaches to decision making- the major approaches which can assist company in
managing the decision in effective manner are as follows-
Autocratic approach- under this approach the top management of the company only has
the power to take the decision. This is due to the fact that the role of top management is to work
for the betterment of the company and for this they will take more effective decision.
Democratic approach- under this type of approach the top management and the decision
making team also takes the suggestion and reviews of the other employees as well (Snow, 2018).
This is majorly because of the reason that the when the top management takes the ideas of the
subordinates then this will have much better decision making. This is majorly because of the
reason that the subordinates are the one which actually works and they know what is good for the
working and what is not.
Techniques of decision making- the techniques are the one which includes the methods
through which effective decision can be taken. These techniques are as follows-

Brainstorming- this is the most common and important technique for taking the decision
(Cristofaro, 2017). Under this technique all the people involved in the decision making process
sits together and then they discuss over the issue for which the decision need to be taken.
Simulation- this is another major important tool or technique of decision making as
under this method the people try to create the same situation for which the decision is to be taken
(Sandhu and Sood, 2017). This role play helps the company in managing all the activities which
will take place and will assist the management in analyzing the situation in advance and then
take decision for managing that situation.
Factors affecting decision making- in addition to all these approaches and techniques
there are also some of the factors which affects the decision making process of the company.
These factors are as follows-
Working environment- this is a major factor which may affect the decision making
process of the company (Khan, Akhtar and Merali, 2018). This is majorly because of the reason
that when the working environment of the company is not coordinated then the company is not
able to take the effective decision. The major reason underlying this fact is that if there will not
be proper coordination then the proper information will not be available and decision will not be
made in effective manner.
Perception of employees- this is another major factor which affects the working of the
company and the process of effective decision making. This is certainly due to the fact that every
person has their own perception and way of thinking (Shahzad and et.al, 2018). Thus, it is very
essential for the people who takes the decision to make sure that all the people who are
responsible for the decision are same or similar in the way of thinking so that identical decision
can be taken.
Stakeholder management and conflicting objective
Stakeholder management is the process or series of steps through which the company
plan and manages to build good relation with the stakeholders. The stakeholders are the people
who are interested in the working and operations of the company. These stakeholders can be
either internal or external to the company and it is the responsibility of the company to manage
their needs and requirements. Every stakeholder has different types of need and interest and for