Managing Finances: A Comprehensive Guide for Effective Financial Management

Manage Finances

Table of Contents
INTRODUCTION...........................................................................................................................1
Overview about company:...............................................................................................................1
Questions.........................................................................................................................................1
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................11

INTRODUCTION
In present scenario, it is very crucial to manage money and finance related objects that
help to survive in dynamic environment and sustain for long. Managing finance is a systematic
approach that support in tracking expenses (Archer, 2012). Investing, budgeting, banking and
evaluating taxes of money so that meaning full decision are taken for improvement. Finance
management is a important method to form money produce the advanced interest output worth
for any amount spent within specific time frame. To better understand the context the managing
finance Wesfarmers has been selected. It is an Australian company that is engaged in various
business operations so there it is essential to manage finance for manager.
In this topic, review and analysis of previous financial data, reasons for previous profit
and loss, various resources, requirement for compliance and liabilities foe tax, review about
existing software is discussed. Report also shows allocation for resources, estimates of new items
for inclusion in budgets, prepare budget for requirement and statutory needs, circulate budgets
and ensure managers to take decision, manage risk by checking opportunities for misappropriate
of funds, review of profit and loss statements. Apart this, proper structure and reports, significant
issues in statements, prepare recommendations have been discussed.
Overview about company:
Wesfarmers Limited is Australian company which has its headquarter in Perth, Western
Australia and it also cooperate business in New Zealand (About Wesfarmers, 2018). Company
deals in retail, fertilisers, chemicals, coal mining and industrial and safety products. Respective
firm was established in 1914 as a cooperative company by the Farmers' and other settler
association of Western Australia. It has different business operation such as home improvement,
outdoor living, general and apparel merchandise, office equipments and also industrial sections
fertilisers and energy product, chemicals and safety products.
Questions
1. Examining previous financial data important for managing current and future finances.
Financial informations are the essential need of any organisation it helps to run a business
effectively by generating profits. Its main object is to increase profit margins and establish areas
to generate profitability. It is very important for every organisation to compare present financial
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data with past data because it helps to take better decision to run a business by comparison. This
information helps to decide whether a department is making profit or loss and also give ideas
what steps should be taken to reduce the loss. Previous data of any firm defines business area
that gives suggestion to organisation in which area can expand the business to earn more profits.
Each enterprises need to have past year financial statements such as income statement and
balance that can be helpful to compare and further business decision activity (Cavenaghi, 2014).
2 Need to understand the reasons for profit and loss.
Profit and loss statement is a document of measuring and reporting company's expenses
and revenues during a certain period of time. It helps to show firm's progress and its financial
status while surveyed time. Any industry can get an opportunity to make improvement in
financial position after analysing previous profit and loss. As above discussion, previous
financial statements shows whether company is in profit or loss and give suggestion to get solve
the problems which is occurring in business. For knowing profit and loss a company should
research and analysis the previous profit and loss and need to make further finance budgets that
helps to give suggestion in which department a firm should invest in order to make profits. If
firm is in loss situation then it should find the reasons and information to get the solution.
3 Examples of your business critical dates and describe how they can be used to increase profit.
Critical dates defines the planning in financial year that allow a organisation to make
most busy and slow period in order to manage the finances as well as resources. It includes black
Friday, end of financial year sales, boxing day etc. For instance, Wesfarmers is a retailer
company which deals in chemicals, fertilisers, coal mining and industrial safety products. This
company is planning to increase sales by providing online and expected busy period. For
establish this plan manager need to make solid strategy which will attract to customer such as
black Friday and boxing day. By providing black Friday strategy customer will purchase
products in huge number at less prices than other day and boxing strategy will offer customers
flock to purchase discounted products after Christmas. This strategy will help Wesfarmers to
increase in number of sale and increase financial position of the company. Company need to use
proper resources such as human resource, raw material, cash management etc. that helps to
generate cash and profits for the organisation. All the financial information company will need to
present in general meeting and annual meeting that would define whether company in profit or
loss (Cronqvist, Makhija and Yonker, 2012).
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