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Significance of Financial Management - Report

   

Added on  2020-01-28

17 Pages4261 Words83 Views
FINANCE FOR STRATEGIC MANAGERS

TABLE OF CONTENTSIntroduction..........................................................................................................................................1Task 1....................................................................................................................................................1AC 1.2 Need of financial information in business.......................................................................1AC 1.2 Identification of business risks and relate to financial decisions....................................2AC 1.3 Summary of financial information needed to make strategic business decisions...........2Task 2....................................................................................................................................................3AC 2.1 Purpose, structure and content of published accounts.....................................................3AC 2.2 Interpretation of financial statements..............................................................................5AC 2.3 Computation of financial ratios from the accounts and explanation to support strategicbusiness decisions........................................................................................................................6Task 3....................................................................................................................................................7AC 3.1 Distinguish between short and long term financial requirements for Sainsbury............7AC 3.2 Table comparing short and long term finance sources....................................................7AC 3.3 Examination of cash flow management techniques and assessing the significance ofcash flow management.................................................................................................................8Task 4....................................................................................................................................................9AC 3.4, 4.1 Different business ownership structures, analysis of corporate governance, legaland regulatory requirements, roles and responsibility of owners and managers in makingdecisions.......................................................................................................................................9AC 4.2 Evaluation of Appraising strategic capital or investment projects................................10Conclusion..........................................................................................................................................12REFERENCES...................................................................................................................................13

LIST OF FIGURESFigure 1: Income statement.............................................................................................................4Figure 2: Balance sheet....................................................................................................................5

INTRODUCTIONFinance is considered as the major prospect of an organisation as it is required at eachand every stage. Irrespective to the level of business it is essential for the firm to manage is fundsin effective and efficient manner so that smooth functioning can be driven. However, it is theduty of finance managers of the firm to raise the funds and make optimum utilisation of it togenerate desired results (Bonham, 2008). Further, managerial level people are responsible forassessing and interpreting the financial business information and taking strategic decisions toachieve long term success. In the present report, researcher emphasis on evaluating thesignificance of financial management for accomplishing business targets. In addition to this,report illustrates need of financial data, its analysis for better judgement. Report entailsillustration of short and long term financial sources and their implications. Lastly, for makingsmart investment decisions report incorporate different techniques for the support of managers. TASK 1AC 1.2 Need of financial information in businessLooking at the present corporate environment it is important for every organisation tomake adequate use of their available resources so as to generate desired results and outcomes.Herein, managers play significant role by collecting financial information from the preparedaccounts and allocate and use resources. By the means of this, they are able to make effectiveand smart decisions for the future contingency (Bull, 2007). Financial statements of businesshighlights firm’s expenditures, revenues, operational performance, assets liabilities and owner’sequity so that managers can assess the status of business and accordingly makes decisionregarding future contingency. The main purpose of managers assessing the wide range of information is to employmethods of minimizing the costs and maximize the modes of revenues so that firm can attainlong term sustainability. In this regard, managers are accountable to make in-depth analysis ofprepared financial statements so that the best possible judgement can be made to enhance firm’ssales volume and costs and expenditures can be controlled. There are several techniques thatmanager undertake i.e. comparative financial statements, ratio analysis, capital budgetingtechniques to assess the business proposals and make smart decisions. However, they are alsoresponsible for maintaining the liquidity and solvency position of business so as to overcomeshort and long term financial obligations (Krzysko and Marciniak, 2001). Along with this, cash1

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