Financial Management and Ratio Analysis of SKANSKA Plc

SKANSKA PLC

Table of Contents
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
Roles, responsibilities and functions of financial management...................................................3
Part 2................................................................................................................................................7
Calculating ratio of SKANSKA plc for the two years 2018 and 2019........................................7
Interpretation of ratio result with the causes, reason and effect of changes................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Financial management is a practice of planning, organising, directing and controlling the
financial activities associated with the respective financial year. This report is based on the case
study of Skansa Plc in respect to its management of finances in organisation. The organisation is
established in the year 1984. Company is associated with the construction sector in United
Kingdom. The organisation is further planning to expand its business operations in the next 10
financial year. The project will discuss the different aspects associated with the financial
management practices adopted at the business entity. Henceforth, the project will give emphasis
over the roles, responsibilities of the financial management operation in the organisation. The
importance of the financial management function will also consider in this project. Furthermore,
the aim of the report is to evaluate about the overall performance of the business entity in
respective financial year. The suggestion will also given about investing in the company.
Task 1
Roles, responsibilities and functions of financial management
Financial management is a standard practice adopted at the Skansa Plc Company in
context to management of the financial resources associated with the organisation. The practice
of financial management belong to each and every single functional direction adopted by the
organisation. Following are the points demonstrated about the all different roles and
responsibility associated with the financial management operations adopted by the company.
Take all financial decisions
The financial management at the Skansa Plc Company play a key role in improving the
managerial decision-making at the organisation. This is a key role that the financial management
practice play in the company that it allow the business entity to take on all important and
essential decisions related to the management of the financial resources at the business entity.
Financial resource ate limited in number which create a huge responsibility for the Skansa Plc to
make the optimum level of utilisation of the financial resources associated with the company.
Taking decisions in the organisation is based on different factors such as analysing the financial
requirements of company, taking significant decision in respect to allocation of funds at all
different functional activities entertain by the company, managing the finances, investment
related decisions and all other important decisions (Wakuła, 2020). The role of the financial

management technique is directly for taking the best suitable financial decision making based on
the needs and requirements of the Skansa Plc Company.
Improving investment decision-making of company
Financial management technique such as investment appraisal technique play a key role
in improving the investment decision-making at the organisation. Various investment appraisal
techniques such as net present value method, internal rate of return technique, accounting rate of
return and many other practices that support the best level of investment decision-making at the
organisation. The role of the investment appraisal decisions is that Skansa Plc Company is
involved in construction sector business. The industry constantly require investment related to
machineries, equipments and many other type of investment (Robalo and Costa, 2017). The role
of the financial management decision-making is such that when it comes to investment in
equipment or any other form of asset company need to choose particular investing option out of
availability of multiple choices. Investment appraisal technique support the organisation to take
on the best suitable investment decision-making on the basis of tne needs and requirements of
the business entity. Financial management technique support the company in maximising the
potential advantage against the investment decision-making has been done by the company.
Improving financial wealth
Financial management allow the Skansa Plc Company to maximise the wealth of the
business entity. This is a key role that the financial management practice ensure that company
get to deliver the maximum level of outcome against the financial resources adopted by the
company. Improving wealth involve channelising the financial resources associated with the
company in such a way that the business entity get to deliver the maximum possible outcome
against utilising the funds in the business (Axtell, Smith and Tervo, 2017). Wealth management
can be considers as among the key goal related to the financial management practice adopted by
the organisation. Role of financial management in enhancing the wealth of company support the
overall growth and development of the business entity.
Dividend decisions
Financial management is about to take all important decisions related to the business
operations. Dividend decision is among the crucial decision that financial manager take in
against to deliver the responsibilities. This is a decision that involve segregation of the profits in
all different investors and shareholder group associated with the company. In this aspect decision