Financial Management and Analysis for Business Performance Improvement

Applied Business
Finance

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Section 1. Definition and discussion of the concept and importance of financial management.
................................................................................................................................................3
Section 2: Description and discussion of the main financial statements and explain the use of
ratios in financial management...............................................................................................4
Section 3: Using the template provided:................................................................................5
Section 4: Using examples from the case study describing and discussing the processes this
business might use to improve their financial performance.................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Financial Management is one of the essential feature of the existing business. It make
sure that practices in the company in order to make it operate it smoothly without any kind of
hurdle in the allocation of the capital. The following will include about the importance of the
fiscal management, few of the concepts of the financial statements and the use of the ratios in the
functioning of the firm. It will also cover about the specific ratios like liquidity, efficiency and
profitability by taking the example from the case study with the assistance of the balance sheet as
well as income statements. The performance of the business is also to evaluate the fiscal
performance of the company. In addition to it, it will add about the strategies, the company refers
for bettering the performance of the business company. From the given case study, what are the
elements which can assist in evaluating the performance.
TASK
Section 1. Definition and discussion of the concept and importance of financial management.
Financial management is the method that means to the controlling, planning, organising
and directing as well of the monetary operations of the company. It similarly, integrated by
utilising the principle of the management to the association of the fiscal resources at the time of
having the essential effect in the fiscal management (Yubo, 2021) .
 Maintaining the adequate stock of the assets for the company.
 Appropriate as well as effectual utilisation of the resources.
 Creating secure and authentic company freedoms to give resources.
 Ensuring investors of the company to gain more revenues from their working.
Importance of it is mentioned below briefly:
 Financial Decisions – It supports in the getting the critical cash focused option of the
firm. These decisions are very essential for the firm as one wrong decision can take a
whole firm down. It states about the several risks, option and support in selecting the
level of the acquired assets and capital of investors.
 Profitability – With the appropriate utilisation of the resources and proper maintaining of
the accounts of the company helps in increment of the firm's productivity of the
company. It will make sure in evaluation of the development and efficiency opportunities
of the firm.

 Allocation of the funds- The appropriate allocation of the financial resources which are
given in accordance to the income of the firm. It will better the financial ratios and it will
support in minimising the expenses and enhance the cash flow of the company.
 Economic Stability- It provides the firm an immobility because it states about the
appropriate cash term method which can maintain by the organisational practices, that
can be corrupting for the company and assist managing as well as acquiring more
advantages.
 Capital Structure formation – In order to calculate the need of the investment in the
business growth, the method need to be appropriately formed. Any organisation that
depends on the investment evaluation a firm has and the amount it need to be gain from
the external investors.
Section 2: Description and discussion of the main financial statements and explain the use of
ratios in financial management
Financial statements are the records that are mandatory for all listed firm to keep. It refers
to the monetary practices of the company and these statements gives the fiscal information and
tells about the financial capability of the firm. These statements are necessarily to get it audited
and it is obliged of the fiscal associates. It can be done by the external as well internal sources. It
assures that the statement that are made by the firm which is actually genuine. The statement are
mentioned below briefly:
 Profit and loss statement – It consist of the revenues, incomes, expenditures and the
outstanding as well as accrued incomes and expenses that are in the fiscal year. Similarly
it tells about the transactions that have been made in the time and about the cost which
have been faced by the company in order to make more sales. By minimising the
expenses and salary of the particular time period of the firm as it tells about the new
income of the particular time. (Cuadrado-Ballesteros, Santis, and Bisogno, 2021).
 Statement of the fiscal performance – It is the most essential fiscal averment in the
company as it provides broad knowledge to the consumers of the company about the cash
information. It shows the total assets and liabilities that the firm have and it focused on
paying in the near future. Moreover, it is known as the cash record that is essentially the
initial concern of the company. In other words, it shows about the where the firm's stand
financially.