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FINANCIAL REPORTING TABLE OF CONTENTS INTRODUCTION

   

Added on  2021-01-01

7 Pages1415 Words291 Views
FINANCIAL REPORTING

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Evaluating the purpose of financial management...................................................................12. Critically evaluating the main decision from stakeholder perspective...................................23. Explaining the factors within each decision affect financial position of shareholder.............3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5

INTRODUCTIONFinancial reporting refers to a procedure of disclosing financial information tostakeholders of organisation regarding financial position and performance of company over aspecific time period (Gartenberg, Prat and Serafeim, 2019). Thus, this report will articulate thepurpose of financial management. Further, critical evaluation will be developed on investmentdecision, financial decision and dividend decision with stake holder's perspective. Later, in thisreport discussion will provide on factors within each decision may affect the financial position ofshareholder.MAIN BODY1. Evaluating the purpose of financial managementInvestment decision in firms are unavoidable and continuous and in order to make themrational, entity use the tool financial management. Thus, the purpose of financial management isto maximise owner's economic welfare which could be maximised through profit maximisationor through wealth maximisation. The very first task of FM is to estimate short terms as well aslong term financial requirement of business with the help of analysing different securities whichwould further helps in raising funds for entity through which its profit get maximised. It mainlyhelps entity in creating financial planning through which entity effectively utilise and allocate thefunds which has been received or acquired (Finkler, Smith and Calabrese, 2018). It's anotherpurpose is to ensure the safety funds which only get developed through the creation of reserveand the reserve which created for this purpose are generally known as sinking funds, generalreserves etc.Thus, the main purpose of financial management can be said as creating wealth,generating cash, return on investment and to analyse the corporate risks.1

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