Financial Management Principles for Effective Financial Strategies

This document analyzes the key financial management principles required by organizations to achieve effective financial strategies for long term financial sustainability. It discusses the importance of financial stability and the principles that organizations should follow to ensure long term financial sustainability.

FINANCIAL MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1. Apply different approaches used to support effective decision-making................................4
P1 Apply different formal and informal approaches used to support effective decision-making
.....................................................................................................................................................4
M1. Analyze formal and informal approaches applied to support decision-making addressing
both advantages and disadvantages.............................................................................................6
LO2. Analyze financial management principles which are used to support effective financial
strategies..........................................................................................................................................8
P2. Analyze the key financial management principles required by organizations to achieve
effective financial strategies for long term financial sustainability.............................................8
M2. Critically analyze the key financial management principles and their importance in
delivering effective financial strategies for long term financial sustainability..........................10
LO3. Evaluate the role of management accountants and accounting control systems..................11
P3. Evaluate the role of management accountants and their value as part of an integrated
system........................................................................................................................................11
P4. Evaluate the use of accounting control systems and their value as part of an integrated
business system..........................................................................................................................12
M3. Critically evaluate the role of management accountants and accounting control systems to
support a culture of ethical financial management....................................................................13
LO4. Evaluate ways in which financial decision-making supports sustainable performance.......14
P5. Evaluate the ways in which financial decision-making is important for supporting long
term financial sustainability.......................................................................................................14
M4. Critically evaluate how different ways of financial decision-making support long-term
financial sustainability...............................................................................................................15
CONCLUSION..............................................................................................................................17

REFERENCES..............................................................................................................................18

INTRODUCTION
Every business activity is directly or indirectly related to finance. Financial aspects are involved
in production, marketing, purchasing etc. Problems of finance are closely related to problems of
purchasing, production and marketing. Thus the problems of finance are inherent in some form
of activities of all departments. Financial management encompasses all activities that affect
future fund flow volume and time-related decisions. Finance, between production and marketing,
performs the same function as oil content in running a machine. There are some aspects in
production and marketing decisions that do not come in the field of financial management,
although they affect in finance.
This project report consists of two scenario’s; A and B. In which scenario A; consists of value
management accounting concept and techniques of management accounting for decision making
process and performance maximization for sustainable growth. The other scenario consist of
discussion on the annual report of Tesco Plc and additional to this various investment appraisal
techniques and ratio analysis for the company has been done in this report. The long investment
method provides the local council with the equipment to help determine options for methods,
groups and other diversionary issues using conventional understanding as it is.
The methodology better informs the Council when considering various organized options that
affect organizations, such as a reasonably long housing approach, a centralized vehicle and a
stimulus from the available funds left. It guarantees that the components, for example, the effect
of the cost / comfort level on the resident, the risk and the levels of consistency and the
motivating forces for the money will be considered determinants of these choices.

LO1. Apply different approaches used to support effective decision-
making
Decision-making is an integral part of the current administration. Fundamentally, rational or
sustainable dynamics are considered the essential ability of managers. Each boss makes hundreds
and many choices subliminally or deliberately making it a key part of an administrator's job. The
choices take on important roles as they decide both authoritative and administrative exercises.
Choice can be defined as a deliberately studied strategy with many options to achieve
classification or administrative goals or objectives. The dynamic approach is an inevitable and
essential part of the management of any society or business. The choices are made to continue
the exercises of the commercial centers and their authoritative work.
P1 Apply different formal and informal approaches used to support effective
decision-making
Some of the informal approaches are given below:
Structure: Each special unit is led by its own pioneer, who is, in principle, better prepared to
understand the needs and problems of that particular unit. This takes into account a regulatory
intelligence union of the user where the official level gets exactly the most important information
for targeting and the board. This highlights the content of the classification exercises and simply
feeds the results of the specifications that will make the stool pass to the officers and the
administrative team.
Develop the structures of physical experts to release dynamic evolution. The implementation of
the factory membership chart involves a number of important forces that start with the boss, the
CEO and the other authoritarian of Tesco Plc at the top while official officials set goals and
affects the society. Head positions below the official level are responsible for achieving these
goals in their areas of responsibility or departments, which are resolved by sufficient progress in
management information.
A multilateral structure that separates the capabilities of offices in specific workplaces allows
supervisors in those offices to oversee issues and bring methodological and editorial efficiencies

into their workplaces. It also reflects the degree of business organization in which data about
efforts are made, tried and somewhat set aside for future office activity, in the same open way as
those in more senior administration higher than the blame for unlocking a major campaign.
Processes: The suggested methods are simple. More fully, they can delegate - and only
collectively - collect collections of commissions and activities that change commitments. Within
companies, these sources and information products can be monitored as resources, information
and people. Typical application scenarios include new product development, performance
application and customer support; Investors are very nice, but in addition they are equal in terms
of property and vitality.
Systems: Supervisors should quickly obtain information to make decisions on key issues
identified by revenue, transparency, and activities. The associations collect a collection of
information models, including customer records, process data, fact search, cash accounting
records, information collection and warehouse data and individual property records. Nonetheless,
most of this data is eliminated from office problems, which makes it difficult for pioneers to get
the data quickly.
The audit data framework improves and accelerates information management by placing the data
in an open and solitary position with the framework. The result is a quick and general guide to
the political decision.
Informal approach:
Some of the informal approaches have been given below:
Connections: When two people enter into a relationship, the amount of decisions they should
make regarding their killing is essentially due to the approach of their respective decision-
making dissolution circles. This is not based on how these decisions are to be made together, but
necessarily because you see someone who influences the other person on all the decisions you
make or - dependent. In order to maintain a reasonable relationship, all facilitators should think
about its performance in any case. Whether you choose options together or consider each other in
your individual decisions, there is usually very little to do alone.

However, the extent to which your circle of two decisions depends entirely on you and your
presentation, and is one of a kind for each couple. However, the more options a couple can share
or give the better. If a couple of supporters choose irregular and irregular decisions, then once in
a while, the relationship will last.
Systems: The dynamic approach to introducing new antibodies into national immunization
programs is often surprising, involving several members who provide clear information, set a
record and include compiling information, taking action and increasing political assistance.
Members can have a variety of levels of information, data and motivation to understand new
approaches. If it does not seem necessary, the estimate of general wealth or the ability to present
a system selected for Unilever can dilute procedural decisions.
Efforts to empower powerful people across the country have largely focused on building gains
worldwide and informing delegates about the approach. Less attention has been given to the
cooperative energy of the characters on the screen and to how the whole flow of emotions
influences the dynamic approach and technique.
Unwritten instructions: politics, nonviolence and favors influence the dynamic process. In the
best case, societies executed 75% of their decisions and 25% on associations and government
affairs. Many people influence decisions and, from time to time, authoritative matters are the
best. Strive not to accept that someone's position means that person has power.
M1. Analyze formal and informal approaches applied to support decision-
making addressing both advantages and disadvantages
Advantages of formal approach to support decision making:
The main advantage of a formal approach over an informal approach to decision-making
practices is that it reduces the competitive vitality that is essential for all majority management
systems. A formal agreement protects all inclusive interests through comprehensive, open and
direct means that urge constructive goals to fight, rather than a strong conflict to maximize votes
realization. The expected long-term structure and formal approval allow for simpler investments,
even by those members who may feel reduced or damaged.

In addition, the formal decision stipulates that once an offer has been recognized, it has been
modified to meet the needs of everyone in a company. Of course, every recognized proposal is
with the help of the whole society and every difference is now open information. This type of
dynamic approach deals with the faster and more efficient execution of some random proposals.
Disadvantages:
A disadvantage of the formal decision-making approach is that support requires a deep and
standard understanding of the basic understandings that structure the structure and the approach
by which choices are made. are made. Because of this need, newcomers may find it difficult to
enter and become interested in mainstream society.
Informal Approach:
Advantages of Informal approach
1. Quick result:
The accommodating structure does not follow a divisive chain, so the spread of the letters can be
faster.
2. Meeting social needs:
Easy communication gives proper weight to the mental and social needs of the staff who are
freeing agents.
3. Correct comments:
Through a simple structure, senior managers can learn authenticated employee analyzes of
various systems and plans.
The informal approach can be used to obtain benefits in the best possible relationship by
following the path:
• Data on accommodating social relationships can be used to gather employee support and
improve their inclusion.
• Through the screw you can quickly provide great information.

• By supporting easy events, the boss can abuse formal and easy connections.
Disadvantages of Informal association:
1. Spread the word:
According to a study, 70% of the information disseminated through an advanced dynamic
structure is fragmentation of chatter that can deceive employees.
2. No systematic operation:
The easygoing structure does not model a structure for the proper operation of a relationship.
3. It can have negative results:
In the event that a stay bond restricts officer procedures and changes, then enforcing them in a
relationship becomes difficult.
4. More emphasis on the interest of individuals:
The accommodation structure provides greater satisfaction with individual arousal satisfaction
when expressed differently with respect to several leveled interests.
LO2. Analyze financial management principles which are used to support
effective financial strategies
P2. Analyze the key financial management principles required by
organizations to achieve effective financial strategies for long term financial
sustainability
Financial Stability definition: Financial stability is a state in which the money framework, such
as the major money markets and the institutional framework of intangible cash for cash stunts, is
appropriate to easily meet the necessary capacities: budget asset fund entomb intervention, risk
board and compensation plan.

Financial stability is one of the most common issues of modern financial writing. The
importance of the financial soundness tests was first seen during a universal budget crisis in the
late 1990s, similarly reinforced by the development of the 2007 financial and financial crisis.
These contributions include an obligation to advance the expert evaluation through investigation
and concrete image of the state of the budget department of a particular nation. As a result of
shared relationships of trust - which govern understanding at both the simple and even the level -
the tests must cover the entire inter-currency framework.
Financial management principles required by organizations to achieve effective financial
strategies for long term financial sustainability:
Financial sustainability standards have been defined as a direct consideration against which to
focus financial practices and choices. The number of sensitive staff presidents is thought to rely
solely on human resources agreements or ideas to build their business, and generally has no idea
where they are or where they are going.
While agents will immediately clarify their commitment - working for them, fulfilling the jobs of
individuals, satisfying a need in the mall - you will not go far without the hard and practical
benefits of development. Some of the standards include:
1. STRATEGIC PLAN AND CORPORATE PRIORITIES
The disposition of life is a management tool. It is used to allow the audience to become a
character of the future - to bring together the essentials and help people in the audience move
towards similar goals. The company's approach changes the course of the general public as
changing circumstances.
Negotiating life is a limited effort to support key decisions and activities that shape and guide
what an audience is, what it does and why it does, with an emphasis on where it should go and
how to get there.
2. PROVIDE SERVICES IN AN EFFICIENT MANNER
In the thriving outlook on Internet-based life, customer support needs must be met through
relevant communications and must be made quickly. 42% of customers hope to receive a

response via the online media system within an hour. To make you think about how this happens
from time to time, most associations on Twitter basically respond to this request for every day.
3. PROVIDE SERVICES AT AN EQUITABLE (FAIR) AMOUNT
With information that offers attention and updated letters to executive collections, we maintain
quality collections before or after peak periods twice a year. Nearby, by dividing the problems
and framing the peak hours, a quality manual is used and sanctioned to guarantee quality control.
For return speculators, our basic approach is to pay for stable and reliable benefits, considering
internal and external evaluation of company performance and working conditions. At a critical
level, the net income level is set at 30% or more.
4. WITH KEY STAKEHOLDERS
Participants can influence the outcome of the fight as they will have normal access to the
necessary data and results. Whether it causes recognition of the features of the cross or support
for an even more subsidized offer, members influence the viability of any activity or fight.
Participants can represent the members of your society, corporate leaders or combat pioneers,
group leaders, crusader supporters, ambassadors and finalists of what you expect from a job.
M2. Critically analyze the key financial management principles and their
importance in delivering effective financial strategies for long term financial
sustainability
Long-term financial stability methods are used as rational practices and techniques that are used
to achieve a specific purpose or that can be prudent and guarantee the security of a currency
against the currency world. The current monetary frameworks are strengthened and provided in
the structure and used as a positive outlook in currency development. In addition, significant
financial aid and reflection measures are applied to the Council's financial procedures.
In any case, an adequate expenditure financing process is needed. Since there are some methods
for budget negotiation, a collaborative approach will help determine which strategies should be
undertaken and first reclassify to address problems and assist in problem analysis. The
methodology includes scenarios of gas production and long-term consumption to consider the

elements that will subsequently be identified with real money and the potential withdrawal
opportunities. found. The theories and scenarios generated, characterized by the achievement of
key results, control the specific angles that should be made and further updated. . In addition, the
method acts as a clock to isolate and address changing requirements and conditions, new issues
and potential risks and their impact on gases, plans, methodology and practices. . When a model
of the method is complete, the framework will be examined to validate changes in standards,
systems and strategies, where appropriate.
The withdrawal of the financial support structure was made to reflect future spending limits
through its measures, strategies and strategy. Use of the framework controls the organization in
determining important options that help understand the goals and objectives of the retreat. The
creation of the structure faces an important development in establishing the financial capacity of
the financial plan, to help reach the key agreement.
LO3. Evaluate the role of management accountants and accounting
control systems
P3. Evaluate the role of management accountants and their value as part of an
integrated system
The role of the management accountant is to take the actions to ensure the safety of his
association's spending plan, manage all financial problems and, in this regard, assist in the look
at organization and general method of organization.
The main body of accountants is the key person in determining the status and performance of an
association. Some choose to turn to a qualified management accountant (CMA), a capability
such as a CPA, however with a gradual focus on cost accounting, cash association and board of
director’s issues.
Job duties can usually be fulfilled. Depending on the society, your level of experience, the season
and the type of activity, you could fulfill one of the commissions that come out of it:
• Design

• Pay attention to the assessments
• Monitor the benefits of making a pay and reinforcement contract decision
• Assist with basic connection
P4. Evaluate the use of accounting control systems and their value as part of
an integrated business system
Any type of accounting framework can bring incredible benefits to an independent company.
These benefits are enhanced by a coordinated accounting framework, which naturally receives
and distributes a constant flow of information through money-related activities. A coordinated
framework meets the requirements for information retrieval and also ensures that your records
are constantly advanced.
At a hierarchical level, the internal control objectives are identified with the budget name
dependencies, the appropriate criticisms of the achievement of operating objectives or key
objectives and stability with laws and guidelines. At a specific exchange rate, internal control
refers to the actions taken to achieve a specific objective (for example, how the company's
indemnities are granted to outsiders for substantial content management.). Internal control
strategies reduce process combinations, promoting increasingly intuitive results.
Accounting controls basically involve the reconciliation of companies and the methods and
strategies regarding the protection of benefits, the expectation and detection of hatred and error,
the accuracy and performance of the accounting records and adequate design of reliable balance
sheet data. Accounting checks have a significant impact on the dependence of the balance sheet
data.
The accounting controls are planned, performed and maintained to manage certain corporate
risks that harm the achievement of the objectives of the element of hard currency disclosure;
feasibility and effectiveness of the actions; consistency of laws and material guidance; and
welfare protection.

M3. Critically evaluate the role of management accountants and accounting
control systems to support a culture of ethical financial management
The management control systems (MCS), assumes that controls are addressed using top
management in business, which covers the execution policy and applicable award structures
come at predetermined steps.
The level of organization can be found in the different stages of the formulation, in short, a
conspiracy that identifies with the currency, which differs in each organization when the system
receives, which depends on the individual characteristics half of their leaders, the size of the
organization and the views of the organization and the position of dictator. MCS has been cited
in various ways, as this is the system by which the council includes resource security and their
use with vigor and profit to achieve the organization's goals realization.
Any type of accounting structure can bring unrestricted benefits to the free agency. These
advantages are enhanced by an accounting system, which in turn receives and spreads a constant
flow of data through money-related exercises. A comment system eliminates the need to recover
data while ensuring that your records are updated regularly.
With an established accounting framework, accounting skills are enabled in a solitary application
that changes itself. This means that there is no valid reason to reset the data starting from one
edge and then later on the next, for example by changing the data from seeking the card cover. to
an autonomous accounting structure. This eliminates the possible human error. Moreover, there
are no convincing reasons to understand the different records and capabilities, as they update
routinely and regularly.
All in all, the agency will get the exact information about consuming much faster. This helps
leaders quickly select excellent commercial and medication options for courses, according to
comprehensive and beneficial data.
Most of the edges allow testing so you can try the thing before you get it. However, an employee
may set aside a small effort to mow the grass. So it is a sensible plan to hire staff with one or two
alternatives before choosing a useful, simple to use and - clearly - expensive system.

With inconvenient or self-contained accounting, someone should remove the information from
the society's claim structure and pass it on to the accounting system. This requires human error
and means the accounting data is updated regularly. Administrators will not be able to choose the
best alternatives when the information they receive is old and likely to be missing.
LO4. Evaluate ways in which financial decision-making supports
sustainable performance
P5. Evaluate the ways in which financial decision-making is important for
supporting long term financial sustainability
Apparently, a large company around the world usually spends huge amounts of dollars on new
specifications. The way these exercises are organized, conceived and managed at the moment is
clearly affecting costs, but it is also having a significant impact on the strong position of the
company.
An important test is that most business support specialists within an organization do not initially
participate in business applications. Brochures that bring money into a company are met with
other benefit options with direct costs and expected revenue. They go far beyond thinking about
the natural risks and benefits of the activity. Organizing cash and support options may still
prevent financial action today, but may never meet administrative pressure. For example, an
association may place structures in a monetary structure to be manufactured, but then realize that
it is in an area that holds them when it purchases vital sources depending on the oil item.
A serious obstacle to the failure to adhere to the balance sheet report and to the regulatory
elements is the reduction of the group's standard operating support. However, as WRI found in
its new work archive, Profit Alignment and Environmental Sustainability: industry stories, there
are associations that are starting to provide us with methods to evaluate it to complete.
Experience of Tesco Plc:
Some companies, for example, Tesco, are trying to ensure that the great indoor cooling exercises
consider sustainability effects from the start. For example, Unilever, one of the world's leading
food associations, started to make progress between the association's money controller and the

Chief Sustainability Officer (CSO). Capital spending that currently exceeds $ 5 million should be
controlled by both the president and the CSO. The CSO determines cases on the basis of a
number of common principles and may reject applications for practice that do not meet the
models or provide an appropriate explanation of why the governing features of the society were
not considered. As a result, the CSO may request greater security before making a decision.
M4. Critically evaluate how different ways of financial decision-making
support long-term financial sustainability
Some of the financial decision making process includes; choosing various technologies such as
cash flow statement, income statement and break even analysis for making decisions. These
techniques have been discussed below:
Cash flow statement: The cash flow statement provides an important element of dynamics due to
the strength and rationalization of the group's liquidity. The success and sustainability of each
company depends on their ability to generate water funds. Revenue is an idea that overall we are
a subconscious. Organizations survive because they have money, they bomb when they don't. In
this way we should commit to an organization's ability to make its money and secure it from a
variety of sources. This is clearly found in the definition of income.
Income statement: The income statement varies from the cash flow statement in the broadest
ways: it includes intangible assets, for example depreciation, but does not show when income is
received interest and debt paid and shows the expected benefits of time. It is also a useful tool for
comparing group presentation to others of comparable size in similar campaigns. The
information in the wage release reflects options that control labor costs and the cost of products
offered to keep total income useless.
Various cash issues and concerns can damage Unilever's financial stability. These issues include,
however, not limited to, the use of stress, a new turn of events, promotions, and guaranteed
reasonable wages and sources of funding and attempts at metropolitan responsibility to stay
moderate. The Liquidity Enhancement Structure (LTFSF) intended to detect future financial
issues through integrated rules, procedures and systems. The implementation of a framework
controls the public in choosing excellent options for preparing to make money on the table,
maintaining a certain degree of flexibility, to help visualize the crucial condition determined.

CONCLUSION
A budget feasibility study will contribute to an assessment of the ramifications associated with
cash to provide sufficient evidence of the dynamic approach. The FIA has a competency test
related to money compared to the FIA (see next area) because it thinks about how to draw a new
capability, function or option and the relative costs, availability of important functions to achieve
it, in the same way as other definitive consideration. This type of budget analysis is needed not
only for large financial years, for example entire development departments, but also for small
capital efforts or various financial years and alternatives. Like the FIA, the examination of tax
expectations is seen as a money-related approach, although its conclusion and the type of
information associated with it may have suggestions. the test of alternatives that affect long-term
mobility radius.

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