Importance of Financial Management in Business Finance

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Applied Business Finance

Table of Contents
INTRODUCTION ........................................................................................................................1
MAIN BODY...................................................................................................................................1
Section 2......................................................................................................................................1
Section 3:.....................................................................................................................................2
Section 4: ....................................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Appendix........................................................................................................................................11

INTRODUCTION
Business finance is related with having the significant availability about the resources so
tat effectual ability to meet the organizational requirements in effective manner can become
possible. In the current era, it is important for the firm to give emphasis on having reliable
evaluation of its financial resources so that appropriate form of decision-making can be exerted.
The current study will provide the information regarding the concept and importance of
financial management so that depth insights about the main financial statement can be derived in
financial statement along with the utilization of ratios. The particular utilization of the template
will offer the details regarding the profitability, liquidity and efficiency of the company based
on the ratio analysis so that depth understanding can be derived. This will provide the details
regarding the processes so that improvement in business for gaining financial improvement can
be attained.
MAIN BODY
SECTION 1
financial management is the business function that deals with investing available
financial resources in such a way that can allow getting good level of organizational success
(Prihartono and Asandimitra, 2018). There are distinct types of the ways in which financial
management tend to play significant role in financial management as offer the proper level of
guidance in making reliable planning. This provides the assistance in increasing organizational
efficiency, reducing the funds, use of fun, taking financial decision by considering proper
financial reports, saving funds, etc. it allows to identity the right type of sources of finances so
that meeting the organizational objective of having higher ability to meet the organizational
requirement can become possible. This permits to get the approach for identifying the reliable
action for the improvement can be provided.
SECTION 2
There are distinct type of the objectives of the organization which is required to be taken
into the consideration by the organization so that effective processing to have profitability and
sustainability (Al Muhairi and Nobanee, 2019). There are four main financial statements which
is helpful in gaining the appropriate level of information so that making strategic decision to get
higher ability to meet the appropriate kind of the strategic growth can be derived.
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 Balance sheet is related with offering the overview regarding assets, liabilities and share
holder's equity so that significant financial performance of the company can be
evaluated. It permits use to have concise ability to identify its liquidity, credibility, etc.
kind of the performance in turn making the strategic decision can be done.
 Income statement is concerned with having the information regarding the income earned
and expenses incurred for the particular duration so that its ability to earn profitability
can be recognized for making effectual decision.
 Cash flow statement is related with providing the insights regarding the in & outflows of
the organization so that its capability to pay debt obligations can be done easily (Brigham
and Houston, 2021). This permits to have greater approach to recognize that firm is
having proper operating, financing and investing inflows which can make its overall
position in reliable pattern which can contribute in making appropriate decision.
 The statement of changes in equity allows to records how profits are retained within a
company for future growth or distributed to the external parties of the organization.
There are various ways in which thee ratios is taken into the consideration so that proper
recognition regarding the trends can be done in proper pattern (Shim, 2022). In addition, o this,
it provides the assistance in gaining the right type of efficiency prevailing into the firm. Trend
line of its performance can be recognized in most accurate pattern so that existing lacking areas
can be recognized to get the ability to have higher profitability & stability. This helps in taking
the right type of the organizational decisions in turn better growth & development in firm can be
derived.
SECTION 3:
Business review template:
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