Supporting Financial Sustainability

The provided document is a solution to an assignment that assesses the role of financial decision-making in achieving long-term financial sustainability. It covers various aspects, including capital planning, risk involved, and irreversible decisions. The assignment requires students to apply different approaches to support effective decision-making, analyze financial management principles, evaluate the role of management accountants and accounting control systems, and assess how financial decision-making supports sustainable performance.

Pearson
Higher Nationals in
Business
ASSESSMENT BRIEF
Unit
:
15 Financial Management
For use with the Higher National Certificate and
Higher National Diploma in Business
Brief Number: 1
First teaching from September 2016
Issue 1

Higher National Certificate/Diploma in
Business
Assessment Brief
Student Name/ID
Number
Unit Number and Title 15 Financial Management
Academic Year 2019
Unit Tutor Mohammad Ahsan Khan
Assignment Title Principles of Financial Management
Issue Date
Submission Date
IV Name & Date
Submission Format
The submission is in the form of a 10 minute individual PowerPoint presentation and 5
minutes allocated for questions. The presentation slides and speaker notes should be
submitted as one copy. You are required to make effective use of power point headings,
paragraphs and subsections as appropriate. Your research should be referenced using the
Harvard referencing system. Provide a bibliography using the Harvard referencing system.
The recommended word limit is 2,000 – 2,500 words including speaker notes, you will not be
penalised for exceeding the total word limit.

Unit Learning Outcomes
LO1 Apply different approaches used to support effective decision making.
LO2 Analyse financial management principles which are used to support effective financial
strategies.
LO3 Evaluate the role of management accountants and accounting control systems
Assignment Brief and Guidance
Scenario
You have recently established your own management accounting practice firm and have
been
invited to make a ‘pitch’ to a potential client (choose your own choice). In your presentation,
your aim is to persuade the client of the value of management accounting and management
accounting techniques in informing decisions, maximizing performance and helping to
ensure long-term sustainable growth.
Your presentation will cover:
1. How the formal approach (using structure, systems, processes) differs from the informal
approach (relationships, networks, unwritten rules) and analyse it.
2. Critically examine the contribution of internal (employees and mangers) and external
stakeholders (Clients and suppliers) to decision making
3. Explain the factors which we need to consider before taking a decision about to make
(In house) or Buy inventory from external supplier.
4. Briefly discuss the impact of different constraints on production which could prevent
the growth of the organization in terms of sales and production.
LO2 Analyze financial management principles which are used to support
effective financial strategies
Your presentation will also cover :
1. Analyse the key financial management principles required by organisations to achieve
effective financial strategies for long term financial sustainability.(P)
2. Critically analyse the key financial management principles (M)
3. Critically evaluate the importance of key financial management principles in supporting
and delivering effective financial strategies for long term financial sustainability (D)
LO3 Evaluate the role of management accountants and
accounting control systems
3HNC/HND Business

Your presentation will also cover :
1. Evaluate the role of management accountants and their value as part of an integrated
system in any organisation.
2. Evaluate the use of accounting control systems and their value as part of an
integrated business system.
3. Critically evaluate the role of management accountants and accounting control
systems to support a culture of ethical financial management.
4. Explain briefly Why it is important to place a control in organisation internally and
externally.
5. Explain that how can we use the financial management to detect and prevent
fraud .Explain the fraudulent activated and the techniques used to prevent and detect
them.
4HNC/HND Business

Higher National Certificate/Diploma in
Business
Example Assessment Brief
Student Name/ID
Number
Unit Number and Title 15 Financial Management
Academic Year
Unit Tutor
Assignment Title Analysis of Financial Statements for Decision Making
Issue Date
Submission Date
IV Name & Date
Submission Format
The submission is in the form of an individual written report. This should be written in a
concise, formal business style using single spacing and font size 12. You are required to
make use of headings, paragraphs and subsections as appropriate, and all work must be
supported with research and referenced using the Harvard referencing system. Please also
provide a bibliography using the Harvard referencing system. The recommended word limit
is 2,000 to 2,500 words, although you will not be penalised for exceeding the total word
limit.
Students are expected to submit, alongside their assignment, the full annual reports and
financial statements (including notes to the accounts) for the company
5HNC/HND Business

Unit Learning Outcomes
LO4 Evaluate ways in which financial decision making supports sustainable performance
Assignment Brief and Guidance
Scenario
1. Compare and contrast three investment appraisal techniques and evaluate their
effectiveness in helping to maximise return on investment (ROI).
2. Demonstrate the value of techniques (e.g. cash flow statements, break-even analysis) in
helping to inform financial decision making.
3. Analyse how financial decision making supports long-term sustainability.(M)
4. Make recommendations for how management accounting can be used to improve
financial
sustainability. (P)
P2 Analyse the key financial management principles required by
organisations to achieve effective financial strategies for long term
financial sustainability.
SOLUTION:
Financial management includes controlling, monitoring, planning
and organising financial resources in order to achieve
organisational objectives. Financial management can be
accomplished just in the event that you have a sound hierarchical
arrangement. A plan in this setting implies having set targets and
having concurred, created and assessed the approaches,
methodologies, strategies and activities to accomplish these goals.
Sound financial management will include you in long term
strategic planning and short term operations planning. This
financial management should turn out to be important for your
association's continuous arranging measure.
6HNC/HND Business

KEY FINANCIAL MANAGEMENT PRINCIPLES:
 Powerful acquisition and productive utilization of money lead to appropriate
use of the finance by the business concern. It is the fundamental part of the
financial manager. Subsequently, the financial manager should decide the
essential targets of the financial management.
Financial Management’s objectives are divided into
two categories:
1. Profit maximization
2. Wealth maximization.
 Profit Maximization
Primary point of any sort of economic activity is acquiring profit. A business
concern is also working mainly to earn profit. As profit is the estimating
procedures to comprehend the business effectiveness. Profit expansion is
likewise the narrow approach which focuses on, maximising the profit.
Profit maximisation consists of the following significant highlights:
1. Profit maximisation is additionally called as liquidating per
share augmentation. It leads to boosting the business activity for
revenue maximisation.
2. Extreme point of the business concern is earning profit
consequently, it thinks about all the potential approaches to build
the productivity of the concern.
3. Profit is the boundary of estimating the effectiveness of the business concern. So it
shows the whole situation of the business concern.
 Wealth Maximization
7HNC/HND Business

1. Wealth maximisation is one of the advanced methodologies, which includes
most recent developments and upgrades in the field of the business concern.
The term wealth means investor or share holder’s wealth who are engaged in
the business concern.
2. Wealth maximisation is also called esteem maximisation or net present worth
expansion. This goal is an globally accepted idea in the field of business.
3. Finance is the backbone of business association. It needs to meet the necessity
of the business concern. Every single business concern should keep up
satisfactory measure of money for their smooth running of the business
concern and furthermore keep up the business cautiously to accomplish the
objective of the business concern. The business objective can be accomplished
uniquely with the assistance of viable administration of money. We can't
disregard the significance of money at anytime and at any circumstance.
P3 Evaluate the role of management accountants and their value as
part of an integrated system.
Solution:
Different tasks are performed by management accountants to make sure that
their company is financially doing well and secure and management
accountants handle all the financial matters and thus it helps to lead the
business's overall management and strategy.
Management accountants do work for private organisations, public companies,
and government agencies.
Management accountants play the key role in determining the status and
success of a company.
Management accountants make reports about profit and loss, and they
compare budgets, and examine processes and procedures. They maximise
business operations by doing this. Managers then use the information
generated from these reports to better allocate money and maximise the
revenue and profit. Job responsibilities of these management accountants can
range widely. It also depends on the company they are working in, The role of
management accountant includes reporting, collecting and recording financial
data from different units of a business, they also observe and analyze their
budget and suggest their allocation and funding. In a small business
8HNC/HND Business

Management accounting's main role is budgeting. The main goal of
management accountants is to assist the management of a company in
different functions such as planning, organizing, directing, and controlling.
Their duties can include the following tasks:
 Managing company’s investments
 Budgeting
 Handling taxes
 Planning
 Strategising
 Decision Making
P4 Evaluate the use of accounting control systems and their value as
part of an integrated business system
Solution:
Accounting controls are the methods and procedures that are used in the
organisations to make sure the accuracy and validity of its financial statements.
The accounting controls do not guarantee consistence with laws and guidelines,
but instead are intended to assist an organization with working the most ideal
way for all investors and stakeholders.
Accounting controls are implemented in firms and businesses just to make sure
finance is being managed smoothly and it provides efficient and accurate
financial statements. It also ensures that all the departments of the
organisations avoid fraud. The consistence with laws and guidelines are not the
motivation behind accounting controls, but instead to assist an organization
with being simply the best form for all partners. Every organisation uses the
different accounting control systems, it depends on the type of business. The
three fundamental territories of accounting controls are detective controls,
preventive controls, and corrective controls.
Examples of corrective internal accounting controls includes physical audits.
Auditors are always assigned with a major task by reviewing and evaluating the
internal accounting control systems due to the legal, professional and economic
concerns. It makes it unprofessional for the auditor if be conducts an audit
9HNC/HND Business

without taking some careful evaluation of internal control systems. It also
implies for the auditor that he should not take the same audit programs and
procedures for the organisations with with strong control as for those
organisations with poor control.
P5 Evaluate the ways in which financial decision-making is important
for supporting long term financial sustainability.
Solution:
We consider finance to be a critical switch to impact practical results. The
private area will assume a significant part in reclassifying the same old thing,
assisting with supporting the change from abusing nature to reestablishing
nature. The finance sector is in a novel situation to boost the change through
just consenting to loan to, put resources into and guarantee organizations that
deal with their tendency dangers and effects. Financing supportable business
has solid monetary just as more extensive cultural advantages, which is the
reason economical money keeps on acquiring foothold.
Among various financial decisions, the one identifying with interest in fixed
resources or capital planning is of unique importance. While taking this choice
monetary administrator needs to avoid potential risk. These choices are
moderately more significant as a result of the accompanying reasons:
(1) Long-term Growth and Effect:
These decisions are concerned about long term assets. These resources are
useful underway. Benefit is acquired by selling the products so delivered. It can,
hence, be said the more right these choices are, the more noteworthy will be
the development of business over the long haul. Notwithstanding that, these
influence future prospects of the business.
(2) Large Amount of Funds Involved:
Decisions with respect to fixed resources are remembered for the review of
capital planning. Enormous measure of capital is put resources into these
resources. On the off chance that these choices end up being incorrectly, there
happens hefty loss of capital which is a scant asset.
(3) Risk Involved:
10HNC/HND Business

Capital budgeting decisions are full of risk. There are two reasons behind it. To
start with, these choices allude to a significant stretch, and as such expected
benefits for quite a while are to be envisioned. These appraisals may end up
being incorrectly. Second, due to hefty speculation included, it is hard to change
the choice once taken.
(4) Irreversible Decisions:
Nature of these decisions is such as that it can't be changed so rapidly. For
example, if not long after setting up a cotton factory, it is considered evolving it,
at that point the old hardware and other fixed resources should be sold at
expendable cost. In doing as such, weighty misfortune should be caused.
Changing of these choices, subsequently, is troublesome.
11HNC/HND Business

Learning Outcomes and Assessment Criteria
Pass Merit Distinction
LO1 Apply different approaches used to support effective
decision-making
D1 Critique the use of
different formal and informal
approaches to support
decision-making in given
organisational examples.
P1 Explain and apply
different formal and informal
approaches used to support
effective decision-making in
given organisational
examples.
M1 Analyse the different
formal and informal
approaches applied to
support decision-making,
addressing both advantages
and disadvantages.
LO2 Analyse financial management principles which are
used to support effective financial strategies
D2 Critically evaluate the
importance of key financial
management principles in
supporting and delivering
effective financial strategies
for long term financial
sustainability.
P2 Analyse the key financial
management principles
required by organisations to
achieve effective financial
strategies for long term
financial sustainability.
M2 Critically analyse the key
financial management
principles and their
importance in delivering
effective financial strategies
for long term financial
sustainability.
LO3 Evaluate the role of management accountants and
accounting control systems
LO3 & 4
D3 Make justified
recommendations on how the
role of management
accountants and accounting
control systems can be
improved to support financial
decision-making in order to
achieve long term financial
sustainability.
P3 Evaluate the role of
management accountants and
their value as part of an
integrated system.
P4 Evaluate the use of
accounting control systems
and their value as part of an
integrated business system.
M3 Critically evaluate the
role of management
accountants and accounting
control systems to support a
culture of ethical financial
management.
LO4 Evaluate ways in which financial decision-making
supports sustainable performance
P5 Evaluate the ways in
which financial decision-
making is important for
supporting long term
financial sustainability.
M4 Critically evaluate how
different ways of financial
decision-making support long
term financial sustainability.
12HNC/HND Business