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Finance for Strategic Managers

   

Added on  2020-01-15

15 Pages3390 Words371 Views
Finance for StrategicManagers

TABLE OF CONTENTSINTRODUCTION.........................................................................................................................1Task 1...............................................................................................................................................11.1 Assessment of the need of financial information in a business.............................................11.2 Business risks related to finance decisions:...........................................................................21.3 Summary of financial information needed for strategic decision making.............................3TASK 2............................................................................................................................................32.1 Purpose, structure and content of published accounts...........................................................32. Interpretation of the financial information in these accounts..................................................73. Financial ratio analysis............................................................................................................7Activity 3.........................................................................................................................................81. Difference between long and short term finance requirements for businesses.......................82. Comparing the source of long and short term finance for businesses.....................................93. Importance of cash flow management.....................................................................................9TASK 4............................................................................................................................................91. Corporate governance, legal and regulatory requirements of different business ownershipstructure.......................................................................................................................................92. Comparing roles and responsibilities of owners in decision making for different businessownership structures..................................................................................................................10CONCLUSION..............................................................................................................................10references.......................................................................................................................................11

TABLE OF FIGURESFigure 1: Income Statement of Vodafone........................................................................................4Figure 2: Balance sheet of Vodafone...............................................................................................5Figure 3: Cash flow statement of Vodafone....................................................................................6LIST OF TABLESTable 1: Financial Ratio analysis.....................................................................................................7

INTRODUCTIONThe financial statement of a company reflects its performance. A company has limitedfinance available with it as such it is of utmost importance that these resources are usedefficiently (Murphy and Yetmar, 2010). The strategy and objectives are woven around thefinance availability of a company. The current research project is based on finance for strategicmanagers and it has chosen Vodafone which is one of the leading organization of UK. Study willdiscuss different available sources of finance for various decisions and different methods foranalysing financial information of the organization. TASK 11.1 Assessment of the need of financial information in a businessManagement of the company is responsible for the decision making and strategyformulation. The financial statement of the company act as a guide which helps in decisionmaking. The managers can evaluate performance of Vodafone as well as the future of thecompany can be decided. The need of financial information for Vodafone is:To evaluate the performance of Vodafone: The most important aspect for any business isto see whether it is profitable or not. The financial statements provide breakup and thefigures of sales, expenses, revenues, etc. which are very beneficial for the managers tostudy the business (Menifield, 2013).Solvency: The solvency needs to be maintained in the long run. A proper track of thefinancial position of Vodafone ensures that the solvency is maintained. This would beimpossible without income statements.Liquidity: There should not be any shortage of cash and liquidity with vodafone. Thefinancial management ensures that this situation does not arise as it may be determinedfor the business.Cash Flows: Inflows and outflows could be studied and the area in which the money isused can be tracked. If unwanted expenses are there it can be rectified.Allocation of scarce resources: Financial decisions and management decisions togetherhelp in allocating scarce resources as management has the better idea about availability ofthe resources. They can allocate it properly and effectively (Watson and Head, 2010).1| P a g e

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