Financial Management and Use of Ratios for Business Improvement

Applied Business Finance

Contents
INTRODUCTION...........................................................................................................................................3
SECTION 1....................................................................................................................................................3
Financial Management and its Importance.............................................................................................3
SECTION 2....................................................................................................................................................4
Discussing financial statements and use of ratios...................................................................................4
SECTION 3....................................................................................................................................................6
SECTION 4....................................................................................................................................................9
Discuss the process which business use for improve its financial performance:.....................................9
CONCLUSION.............................................................................................................................................11
REFERENCES..............................................................................................................................................12

INTRODUCTION
Financial management includes planning how an entity will use money for productive
objectives, distributing existing funds in the most efficient and lucrative manner, exercising
control over one of those supplies, and disseminating statutory liquidity allocations to multiple
groups. It is in charge of planning, supervising, organizing and integrating the financial activities
of a firm. Financial planning ensures that the firm meets its highest targets, such as increasing
profits, decreasing finance expenses, and other moderately, such as those pertaining to the
authorities, employees, and manufacturing (Lu, 2021). This report is comes from a study of the
company's main financial operations and the preparation of various financial statements such as
income statement and balancing sheet. The necessity of financial management is discussed in
this study, as well as the many types of financial statements. In addition, use ratio analysis to
assess business results and track an individual's progress. Financial ratios are required for any
corporate organisation in order to assess development and performance over period.
SECTION 1
Financial Management and its Importance
Financial management can be described as "controlling the finances" in basic words (funds).
Essentially, it is concerned with the effective and efficient utilization of finances, i.e., when
monies were gained and whether or not they were fully achieved. Financial management aids in
the achievement of a corporate goals, such as ensuring the industry's existence and development.
Several businesses are liquidated simply since their finances have not been adequately managed.
Furthermore, businesses have limited resources that must be used in a way that generates a
greater yield than the expense. As a result, financial management is a must of the next day.
Importance of financial management
A freshly founded company's financial management is critical. When a business first
begins, it will consume a huge amount of capital, which may be obtained both from long- and
short - term methods. Those cash might be utilized to purchase assets. The key concern,
however, is that such money be invested in assets that would provide a greater yield.