Project Finance management assignment
Added on -2021-02-21
| 13 pages| 3368 words| 61 views
Trusted by 2+ million users,
1000+ happy students everyday
Showing pages 1 to 4 of 13 pages
Project Business Finance
EXECUTIVE SUMMARYThis study has evaluated that, business finance helps company to manage their fundseffectively within the business. This study has highlights that, profit is referred to as the incomegenerated by the business after deducting total cost from the total revenue. Cash flow is referredto as the amount of money that has been transferred in and out of the business. It has beendetermined that, working capital is referred to as the difference between current asset and currentliability of the company. This study conclude s that, change in working capital results in changein cash flow of the company. Furthermore, this study has developed an understanding ontraditional budget and various alternative budgetary tools. Lastly, it concludes that, budgetarytool helps in planning future cost management.
Table of ContentsEXECUTIVE SUMMARY.............................................................................................................2INTRODUCTION...........................................................................................................................4PART 1............................................................................................................................................41. a.) Assessment of Profit and cash flow....................................................................................4b.) Analysing working capital, inventory, receivables and payables..........................................4c.) Assessing how change in working capital influence cash flow of the company....................52. Determining how the current management of the company affects financial results..............53. Analysing and recommending ways to improve cash flow of the company...........................6PART 2............................................................................................................................................61. Understanding on the various budgetary tools.........................................................................62. Application of budgetary tools for planning future cost management....................................83. Analysing traditional and alternative budgetary system..........................................................9CONCLUSION ...............................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONBusiness finance is referred to as the information which is contained in the financialreports like balance sheet, income statement and cash flow statement (CFS). It helps company tomanage their funds effectively within the business in order to attain higher operational goals andefficiency. This study will highlight, the difference between Profit and cash flow statement. Itwill further analyse working capital, inventory, receivables and payables. This study alsodemonstrating how change in working capital influence cash flow of the company. Furthermore,this study focuses on developing an understanding on the various budgetary tools and it helps indetermining how is it useful in planning future cost management. PART 11. a.) Assessment of Profit and cash flow.Profit is referred to as the financial gain from the business after deducting all theexpenses. Profit is referred to as the income generated by the business after deducting total costfrom the total revenue. Cash flow is referred to as the amount of money that has been transferredin and out of the business. This is the net amount of cash which has been received and disbursedby the business during the particular financial year (The Critical Difference Between Profit andCash Flow, 2019). The cash flow of the company can be positive while having no profit. Thishappens when the company has other source of funds other than income. On the contrary, thecash flow of the company can be negative while having large profit. This happens when thecompany tends to make various personal expenses. Profit is one of the most common measure toevaluate the financial position and success of the business. On the contrary, cash flow isconsidered to be more important for the business because it focuses on running the business forthe sustainable period (Aktas, Croci and Petmezas, 2015). Profit is useful in determining thesuccess of the business. Cash flow is considered to be one of the important metric to effectivelyevaluate and assess the long term and short term borrowings of the business. b.) Analysing working capital, inventory, receivables and payables.Working capital is referred to as the capital of the company which is effectively used forcarrying out day to day operations of the business. It is referred to as the difference betweencurrent asset and current liability of the company. The key elements of current assets includesinventories, accounts receivables and cash. The key elements of current liabilities includesaccounts payables and bank O/d.
Found this document preview useful?
You are reading a preview
Upload your documents to download
or
Become a Desklib member to get accesss
Paid Plans
Free Plan
Single Unlock
Monthly Plan
Yearly Plan