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Financial Management Assignment - Airdri company

   

Added on  2020-10-22

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Financial Management
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: ..............................................................................................................................................1P2: ..............................................................................................................................................2P3:...............................................................................................................................................3P4. ...............................................................................................................................................5TASK 2............................................................................................................................................7P5: ..............................................................................................................................................7CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................12
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INTRODUCTIONFinancial Management means efficient and effective administration of funds in properway to complete the objectives of the organisation. It deals with money and investment for anindividual or a business that assist in making decision. The main objective is to manage allessential requirement that are primary for increasing profit of an administration(Higgins, 2012).Airdri is a manufacture and supplier of various luxury, highly reliable, energy efficient andbeautifully designed hand dryer that suit every wash room. It was founded in Oxfordshire (UK)in 1974 by two partner peter Philipp and peter Allen. Airdri requires proper management sytemthat help them in formulation of effective financial strategies through which long term financialsustainability is attained. This report provide important information about various formal and informal approachesused for decision-making in Airdri. Various operative financial management principles use toachieve financial sustainability for an organisation in long term. Importance of accountant toAirdri and various control system are discuss below. Important accounting ways that help inbusiness decision making are explained in the report.TASK 1P1: Financial management refers to the economic and impressive administration of money insuch a manner that helps the organisation to achieve its objective. This is obsessed with planning,raising, controlling and administering of funds used in the business by company. In generalmanner, finance means examination of funds and their vital flow to operate a new business ineffective manner. It is concerned with procurement and utilization of fund in proper manner.Application of management accounting system is important concept as this will aid better controlof departmental activities. It help in effective decision-making, some of its approaches arediscussed below:Formal approaches: It is an accounting method/approach in which payments arerecorded during the period they are received and expenses are recorded in the period in whichthey are actually paid. So Airdri should use this formal approach in recording revenue andexpenses when cash is actually received and paid. 1
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Informal approaches: Under this approach resolution will be sought through informalmeans. Organisation may approach to their employee's without giving any information. Airdrimany time adopt these approach to resolve issue between employee, analyse internalperformance and determine skills of an organisation. Here are some ways of informal approachesexplained below:Accural accounting approach: It is an accounting method when transaction are recordedin the books of account as they occur even if the payments for that particular product or serviceshas not been received or made.AdvantagesDisadvantagesFormal approachIt provides useful informationto employees and stakeholders.Meeting are conduct after aspecific time period. It doesn'twork under emergencysituations. Informal approachIt helps in making decision onthe spot by conducting urgentmeeting.Distract employees from theiractivities at workplace.P2: Financial principle help companies to achieve their objective and help them in makingfinancial strategies that help in long term financial sustainability. Rule of finance helps managerand investors to make good use of these information in making financial strategies.(Michalski,2012). So, it is necessary to find out positive key principle in cause of developing a financialsystem. Airdri uses some accounting rules for financial decision-making and achieving longterm sustainability . Some of the basic principle are mentioned below:Accountability:It is an authority that a firm or a business system will be evaluated ontheir presentation or action related to operation. Accountability is desirable in finance andeconomic because it promotes efficiency. Airdri should use this principle to attempt to strengthenlines of accountability so as to achieve improvement in the job performance of their employee's.Thus, it help in performance reviews and provide continuous feedback to employee that will helpin formulation of effective financial strategics.2
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