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Financial Management : Assignment Solved

   

Added on  2021-02-20

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FINANCIALMANAGEMENT
Financial Management : Assignment Solved_1

Table of ContentsINTRODUCTION...........................................................................................................................3MAIN BODY...................................................................................................................................3(A) Liquidity -..............................................................................................................................3(B) Operation profit - ..................................................................................................................4(C) Financing of assets -..............................................................................................................5(D) Return on investment -..........................................................................................................5CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................7
Financial Management : Assignment Solved_2

INTRODUCTIONThe financial management can be defined as a systematic process of planning, controllingand managing of financial resources of a business entity (Renz and Herman, 2016). Basically, itis important to business entities to manage their monetary resources in order to trace the usageand for better allocation. The project report covers about different aspectssuch as liquidity,operation profit, financing of assets and return of investment. In addition, their importance andeffect on companies performance is also covered in report. MAIN BODY(A) Liquidity -What is liquidity:In the aspect of finance, term liquidity can be defined as those assets which can beconverted into cash (Liu, 2015). A business entity is expected to have good liquidity position inmarket in order to make payment of day to day expenses. In order to measure liquidity, there arevarious kind of ratios such as quick ratio, current ratio etc. The liquid assets can be convertedinto cash in time of less then 90 days. There are some example of liquid assets such as stock,account receivables, certificate of deposit. All these assets can be converted into cash easily andmeasurement of liquidity position of firm is done as per the amount of liquidity assets they have. Importance of liquidity: Liquidity is very important for companies, herein below some importance of this arementioned such as -Better liquidity position shows efficiency of company's management in orderto meet demand of creditors. Due to sufficient amount of liquidity, goodwill of a business entity can be increase inmarket.This is so because if a company has more number of liquidity assets then it isestimated that their efficiency of making payment is strong that leads to increase inreputation of firm. As well as by help of liquidity a company can get information about their operating cycle.This is so because it helps in assessing how effectively a company is selling productswhich shows how quickly stock is converted into cash.
Financial Management : Assignment Solved_3

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