Importance of Financial Management in Business | Desklib

Applied Business Finance
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Introduction
The business finance is a core aspect in the organization. It is related to the funds and
credit employed in the business. Every organization has a requirement of fiancé for purchasing of
assets, goods, raw materials and other flow of economic activities. Internal departments use a
variety of financial statements to assess the firm's earnings performance and status over the course
of a fiscal year. It involves those activities that related to the purchase and saving of capital funds
in fulfilling the needs and objective of financial business enterprise. Business finance requires
money for doing business activities successfully (Amar 2018).
The study is done on the HSBC banking it is a multinational British investment bank and
financial services holding company. The company was established in 1991 in London. The
products and services offered are retail and corporate banking, investment banking, financial
services, wealth management, credit cards etc. This report basically includes, detail discussion that
is related with the importance as of financial management, the report also define the useful
accounts of financial statements that support in ratio analysis to determine the financial Stability
of business. Different calculation related with income statement, statement of financial position
by using Business Review Template is also part of this report.
Section 1: Concept and importance of financial management.
The financial management is the functional area in the organization associated with
the income, expenses, cash and credit so that business can meets its requirement and achieves
objectives. It is a base for maximizing the value of firm for stakeholders. It is linked with the
short term working capital management involving current assets and current liabilities. The
concept of financial management in a business state that use of financial resources by
planning and directing the cash generated through operations and capital obtain from
investors. The financial management reduces the finance cost by ensuring sufficient
availability of funds (Bryan and et. al., 2018).
According to various authors the definition of financial management it is the activity
connected with planning, raising, controlling and administering of funds in organization for
efficient operations. Another definition of financial management given by Phillippatus is that
financial management is concerned acquisition and financing of short and long term credits for
the managerial decisions of the company.
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