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Financial Management in Organisation: Assignment

   

Added on  2021-01-03

6 Pages1250 Words16 Views
Financial Management

Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11 Discussion on the role of management in meeting stakeholder objectives includingapplication of agency theory.......................................................................................................12 Defining various policies.........................................................................................................32.1 Use of various policies in achieving macro economic targets..............................................3CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................5

INTRODUCTIONFinancial management is a vital process of an organisation which enables managers andaccountants of an organisation to plan, organise and control their financial resources in order toachieve organisational objectives. To assess the financial management in organisational context apublic limited company is chosen which is Sainsbury's. Main aim of this report is to analyse keyfinancial decisions in finance and capital markets. In this project report, role of management isdiscussed along with various decisions. Role of various policies is also analysed (Lumby andJones, 2003). MAIN BODY1 Discussion on the role of management in meeting stakeholder objectives including applicationof agency theoryFundamental financial objectives:Every business organisation operates in order to earn profitability and attain financialsustainability. Sainsbury's is a retail supermarket chain which has various outlets in UnitedKingdom. This organisation has set various financial objectives which they achieve from theirbusiness activities such as manufacturing and distribution of products. Main financial objectivesof this company includes profit maximisation, higher revenue generation, financial sustainabilityand appropriate liquidity. These financial objectives are related with growth and development ofan organisation. Agency theory and its significance to achieve fundamental financial objectives:Agency theory is a relationship between principle and an agent. In the case ofSainsbury's, managers of this company acts as principle and distributors of products areconsidered as agents. Sainsbury's is a supermarket chain which sells their products by using retailoperations but in order to increase their sales, management of this company has hired few agentswhich distributes their products to end users. According to this theory, principle and agent arebounded with a contract in which agent sells products of Sainsbury's (principle). This theory isadapted by various organisation in current scenario in order to attain its benefits. Some of theimportance of this theory is mentioned below:1

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