University Finance Report: Financial Management of Tesla Company

This report provides a comprehensive analysis of financial management practices within Tesla. It begins with an introduction to financial management, defining its role in the organization and highlighting the importance of the finance department. The report then delves into specific aspects such as financial planning, working capital management, and risk management. It examines Tesla's approach to financial reporting, outlining the steps involved in preparing financial statements and adhering to reporting standards. A significant portion of the report focuses on cash flow management, discussing how financial managers utilize various methods to monitor and control cash inflows and outflows, including the use of accounting software and the analysis of operating, investing, and financing activities. The advantages of employing a financial manager are also explored, emphasizing their role in investment, tax compliance, and financial resource management. The report concludes by summarizing the importance of financial management for Tesla's success, emphasizing its contribution to stakeholder relations and decision-making processes.

Report

Table of Contents
INTRODUCTION...........................................................................................................................1
A. Financial management............................................................................................................1
B. Role of finance department.....................................................................................................1
C. Knowledge of financial management and reporting...............................................................1
D. Cash flow and management of cash flow by financial manager............................................1
E. Advantages of financial manager............................................................................................1
F. Importance of financial management......................................................................................1
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
Financial management is an important function of any organization. It deals with the
financial resources of the organization (Brigham and et.al., 2016). Report will highlight the
meaning of financial management, role of finance department, knowledge of financial
management and reporting. It will tell about the cash flow & role of financial manager in cash
flow, advantages of financial manager and important of financial management. For the report, we
are choosing Tesla as an organization.
MAIN BODY
A. Financial management
Financial management (FM) refers to the business area or business or administration
function which deals with the finance, cash & its equivalents and credits of the business
(Financial Management, 2017). It is an important function of the company which is directly link
to the company's profitability and attainment of the organizational objectives and goals.
B. Role of finance department
There are various department in Tesla Company who are working together in order to
achieve their departmental as well as organizational goals. Finance department of Tesla
Organization plays an important role within the firm. These roles are as follows -
Finance department deals with the bookkeeping system and financial statements reporting
system of the organization.
Business has to pay tax and fulfil the another tax requirements demand by the tax
authorities. These all tasks are handle and manage by the finance department of the company.
Finance department has to deal with the financial planning for the future. This helps
company to control their expenses, forecast the financial results and evaluate the financial
position of the organization (Bekaert and Hodrick, 2017).
Another roles finance department has to carry within the Tesla organization are Working
capital management, risk management, capital budgeting and cash flow management etc.
C. Knowledge of financial management and reporting
Financial Management of Tesla Company
Company will first analysis its objectives, after that they will analysis the requirements of
money. Company will try to reduce its cash outflows so that resources can be maximize. After
1

that company will arrange the funding. After that company will invest the money into the project
and do evaluate the achievement of the objectives timely.
Financial Reporting of Tesla Company
Tesla Organization do reporting by following steps which are mentioned below -
Company has to prepare the financial statement templates and put the values of
transactions into the templates. This will lead to preparation of all the financial statements as
well as integrated reports. After that company follow all the reporting standards in order to
prepare the final reports of the organization (Barr and McClellan, 2018). Like this, reporting are
done by the organization.
D. Cash flow and management of cash flow by financial manager
Cash Flow
Cash flow refers to the net amount of cash inflow and cash outflow within the business.
Cash inflow refers to the coming of cash and its equivalents in the business from its customers or
clients. Cash outflow refers to the going of cash and its equivalents from the business to pay the
expenses and loans etc. Cash flow can be negative (Cash inflow < Cash outflow) or it can be
positive (Cash inflow > Cash outflow).
Management of Cash flow by Financial Manager
There are various ways through which financial manager of the Tesla Company are able
to manage its cash flow. Management of cash flow are as follows -
Financial manager of the company use various accounting software which helps him to
prepare the accounts daily, monitor the expenses & revenue and plan the future budget. This will
improve the cash flow of the company (Weetman, 2019).
Financial manager of the company measure the cash flow by dividing it into three
activities such as – operating activities, investing activities and financing activities. This lead
him to better understanding of the cash flow of the company. Overall it will help manager to
control the negative cash flow.
Financial manager of the company must decide the break even point of the organization.
Break even point refers to the point where an organization don't have any profit or loss. This will
help financial manager to maintain their profits due to keep the break even point as a
benchmarking.
2

E. Advantages of financial manager
Financial manager is a key employee of the Tesla Company. It plays an important part in
the organizational success of the Tesla. Due to hiring financial manager in the organization,
Company are able to invest their excess monetary resources in proper investment avenues which
increase their as well as their stakeholders' wealth. Due to this, company are getting more and
more investors which is beneficial for the company's shares value and funding. With the help of
financial manager, Company are able to pay tax time to time which lead company not to face any
kind of government actions. This activity enhances the company's goodwill as well. Due to
financial manager control over company's financial resources, Tesla is able to maintain their
financial resources as well as financial position in the market. Financial manager helps company
to forecast their revenue and expenditure which is beneficial for the organization to prepare the
budget and accordingly plan for the future (Finkler, Smith and Calabrese, 2018).
F. Importance of financial management
Financial management is an integral part of the Tesla Company as it plays a significant
role in the success of the organization. Importance of financial management in Tesla
organization are as follows -
It helps business to prepare financial statements and reporting which is necessary for the
purpose of retaining the stakeholders of the company. It will help company to gain resources and
trust easily.
It helps business manager to take accurate decisions as every decisions taken by the
manager will affect the financial situation of the company. Thus, financial management is
important for running in the business activities within the financial context (Brigham and et.al.,
2016).
CONCLUSION
From the above study, it has been summarized that without financial management,
Company cannot survive in the competitive environment. Financial management helps company
to manage and use its financial resources optimum so that organizational objectives can be
achieve.
3

REFERENCES
Books and Journals
Bekaert, G. and Hodrick, R., 2017. International financial management. Cambridge University
Press.
Brigham, E.F., and et.al., 2016. Financial Managment: Theory And Practice, Canadian Edition.
Nelson Education.
Finkler, S.A., Smith, D.L. and Calabrese, T.D., 2018. Financial management for public, health,
and not-for-profit organizations. CQ Press.
Weetman, P., 2019. Financial and management accounting. Pearson UK.
Barr, M.J. and McClellan, G.S., 2018. Budgets and financial management in higher education.
John Wiley & Sons.
Online
Financial Management. 2017. [ONLINE]. Available through:
<https://www.toppr.com/guides/business-environment/business-functions/financial-
management/>
4