Financial Management: Approaches, Principles, and Role of Management Accountant

Financial Management

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1) Apply different formal and informal approaches used to support effective decision making
.....................................................................................................................................................1
TASK 2............................................................................................................................................3
P2) Analyse key management principles required for effective financial strategies...................3
TASK 3............................................................................................................................................4
P3) Evaluate the role management accountant and their value as part of integrated system......4
P4) Evaluate role of accounting control system and value..........................................................7
TASK 4..........................................................................................................................................11
P5) Evaluate the ways in which financial decisions making is important.................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Financial management plays a significant role in the growth of financial performance of an
organisation by recording, summarising and interpreting financial information from various
financial statements including profit and loss a/c, balance sheet etc. Finance manager brings
confidence among an organisation to make sound financial decisions for future projects (Chand,
2019). It also assist management accounting to make relevant decisions and suitable policies for
the betterment of shareholders who is known as pillars of an organisation. The present
assignment report is based on Marks and Spencer which is UK-based multinational retail
organisation selling wide range of products such as clothing, accessories and many more
throughout the world. The report divides into two parts in which first parts discusses the different
approaches used to make an effective decision whereas the second part contains information
related with financial stability of an organisation.
TASK 1
P1) Apply different formal and informal approaches used to support effective decision making
Decision making is the process with the help of which various choices are identified and
by efficiently analysing them various decisions are taken. For the organisations to take finance
related decisions are crucial as it considered to be their most important resource. To support this
formal and informal ways are used in structure methods are used for the prior one while for the
later decisions are taken on the basis of unwritten rules and relationships.
Approaches which contributes in effective decision making process in context of the
organization:
Formal or Informal approach: It will help the business to take the suitable decision by
which the reliable strategy will get developed. It has been used to beware of the rational decision
making and provides the brief explanation about the different elements that are required while
making the decisions. It will enhance the working capability by which the possible strategy gets
used by which the different requirement of the stakeholder will get fulfilled. It will include more
certain outcomes that are free from all the redundancy and more logical outcomes get received. It
is the approach by which the requirement of the partners and the changes in objective will get
evaluate (Purnomo, 2018).
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In addition to the formal and informal approaches to support the effective decision making
there are various other approaches that are used by the finance management of the organisations.
Knowledge based approach: It is the approach as from which the appropriate
information will get received that will helpful to get achieved the better productivity. In this
intelligence will required to build the strategy by the profit will get maximised that has direct
impact on the performance of the business. It is an approach that is more necessary for the
business as by which the effective decision making will get maintained that is referred to the
empirical basis (Barth, 2015). It has more stronger impact on the managerial decision making
and the Marks and Spencer has use this to take the collected knowledge from the market and by
this more adequate decision will be taken by the business.
Techniques used for decision making process:
 T-Chart: It is the graph that provides both positive and negative options by which more
clarity gets induced while taking the decision (Chand, 2019).
 Decision Matrix: The manager must get chose this strategy to take the decision as in this
all the different options will get put in tabular format and the different factor that affect
the decision making. In this then manager give the rating and set the criteria as per the
importance and then chosen more better option (Zainudin and Hashim, 2016).
 Ratio analysis: It is more useful to make the financial statements as in this all the
accounting parameters will get measured by the manager by which accurate information
will get conveyed that helps to make appropriate decision making by which more success
will get attained. It will also used to analyse the efficiency, profitability, liquidity and the
performance as well by which Marks and Spencer make more suitable choice of decision
making (Maynard, 2017).
 Financial analysis: The manager of Marks and Spencer must get develop the strategy by
managing the financial information and with this the efficiency will get developed thus
the efficiency also get more developed (Tjosvold, Wan and Tang, 2016).
As from the above discussion it is acknowledge that the effective understanding of the
different technique must get used by the manager of Marks and Spencer and with that several
decisions will get taken by them in order to get the improvised outcomes (Chen, Chou and
Huang, 2016).
Factors which affecting decision making process:
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