Strategic Financial Management for Cosmos Café and Restaurant

This report discusses the importance of strategic financial management for Cosmos Café and Restaurant, including the use of financial information by stakeholders, impact of financial information on decision making, and the linkage between financial management and achievement of set goals. It also provides an understanding of the financial management model used by the company.

RUNNING HEAD: Strategic financial management
1
Name of the student-
Topic-
University Name-

RUNNING HEAD: Strategic financial management
2
Table of Contents
Introduction...........................................................................................................................................2
Use of financial information by internal and external stakeholders..................................................3
How each source of financial information could impact the strategic management decision making..4
Linkage between financial management and its contribution towards achievement of set goals........4
Understanding of the financial management of Cosmos Café and restaurant......................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

RUNNING HEAD: Strategic financial management
3
Introduction
With the ramified economic changes and complex busienss structure, management of
company should implement strategic financial manager. In this report, new business taken is
Cosmos Café and restaurant in Netherland. This company is incorporated to offer best quality
coffee products to clients.
The people in Netherland are more inclined towards best quality of coffee products. It
is evaluated that Cosmos Café and restaurant will offer high quality of coffee and other
beverage products to clients in Australia. Nonetheless, the main focus of company would be
to use advanced cyber computing enterprises resources planning methods.

RUNNING HEAD: Strategic financial management
4
Use of financial information by internal and external stakeholders
It is analysed that in order to run the business effectively management needs to
implement proper strategies and effective business functioning. It is observed that there are
several statements which could be used by managers and stakeholders to make effective
decision making such as balance sheet, cash flow statements, budget analysis and other
financial statements. In order to communicate imperative information with the internal and
external stakeholders, company record all of its financial details through the accounting
practice and reporting standards (Duchin and Sosyura, 2014).
Internal stakeholders of company
There are several stakeholders of Cosmos Café and restaurant such as Chief financial
officer, management, promoters, employees, owner and who take imperative decisions for the
betterment of organization. These stakeholders are the key persons who are very important
decisions.
Chief financial officer- It is the main person who takes all the financial decisions.
CFO of company uses financial statements, inventory documents and other details to plan the
strategies. For instance, by evaluating the profit and loss account, CFO of company could
assess the financial performance and set business (Laeven and Valencia, 2013).
Management- It is observed that by evaluating the assets and liabilities, the
management of Cosmos Café and restaurant could implement strategies and new business
plan as per the assessed resources. It will help management to determine whether Cosmos
Café and restaurant is having adequate resources to run the business effectively.
Promoters- It will help the owners of Cosmos Café and restaurant to determine
whether Cosmos Café and restaurant is having adequate return on capital employed from the
business (Gitman, Juchau and Flanagan, 2015).
Employees- The employees of Cosmos Café and restaurant will evaluate the books
and other statements to determine whether they are performing up to the mark.
External holders of company
These external stakeholders of Cosmos Café and restaurant could such as government,
tax authority, investors, customers and regulatory authority. These stakeholders will use this
key imperative information to make who imperative decisions.
Creditors- These persons provides capital to company. It is observed that creditors use
creditworthiness statement of company to increase the overall effectiveness of the business.
Suppliers and vendors- It is observed that suppliers need to check the inventory
management documents to evaluate the business functioning of organization (Ehrhardt and
Brigham, 2016).

RUNNING HEAD: Strategic financial management
5
How each source of financial information could impact the strategic
management decision making
Strategic decision making is based on the long term strategic planning and proper
assessment program. It will assess the valuable internal and external factors of business
which will help Cosmos Café and restaurant to avoid possible problems and issues in
determined approach. It is observed that the source of financial information helps
management to make effective decision making. It provides clear about the fluctuation and
trend of business in determined approach. For instance, if Cosmos Café and restaurant wants
to expand the business then management could use financial information such as balance
sheet, profit and loss account and cash flow statement to set the busienss trend in future. It
will help in determining in which Sector Company could make improvement. In Netherland,
Cosmos Café and restaurant could focus on increasing the quality of products and services in
market. Nonetheless, it is also found that people in Netherland are less interested in
considering the price while buying a good coffee from the market. In addition to this,
management could also reduce the unnecessary cost of its coffee products by reducing the
amount blockage in the raw material. This could be done by using proper inventory
management book. This will help Cosmos Café and restaurant to achieve its determined
goals and objective in easy and determined approach. The financial book of account helps in
assessing the financial position of company and implement proper strategic plan to increase
the overall outcomes of the business (Laeven and Valencia, 2013).
Linkage between financial management and its contribution towards
achievement of set goals
The financial management is accompanied with the raising funds from the market and
deployment of the same in the busienss. The cost of the coffee products and foods are highly
based on the cost of capital of company and deployment of the same. It is observed that this
financial management will reduce the cost of the capita and reduce the chances of business
destruction. If Cosmos Café and restaurant does not have proper financial management then it
will eventually increase the overall cost of its products in market. The main linkage between
financial management and its contribution towards achievement of set goals is based on the
associated business cost and use of financial sources. If proper financial sources are not used
then management of company could not estimate the future data for the business expansion
plan. In addition to this, management could also use financial management process to
determine whether company is having appropriate return on capital employed process. There
are several sources of finance such as issue of share capital debt funding and applying for the
loans. The financial management will also help company to determine the possible methods
to reduce the cost of production and increasing the efficiency of the business. The ultimate set
objective and goals of company is highly increasing the overall sales and profit. If the coffee
products offered in the market are high in quality and less in cost then it will increase the
overall sales and profit in determined approach. This could be done by using proper financial
management technique. Therefore, it is considered that with the use of financial management
company could increase the efficiency of the business (Vogel, 2014).

RUNNING HEAD: Strategic financial management
6
Understanding of the financial management of Cosmos Café and
restaurant
Financial management is the main important point which is considered by the
company to decrease the cost of the business and increase the efficiency of the business.
There are several tools and models which are used by company while implementing financial
management such as capital budgeting, ratio analysis, bottom up analysis and other methods.
These methods are used to evaluate the best possible sources of finance available to company
and deploying the capital in the business. In simple words it could be inferred that financial
management is the process of efficient and effective management of funds in such a manner
as to achieve and accomplish the set objectives and goals (Gitman, Juchau and Flanagan,
2015).
Cosmos Café and restaurant needs to follow the following financial management
model to increase the efficiency of its financial performance.
Financial stability- The management of Cosmos Company needs to evaluate whether there is
adequate funds available for the effective business functioning or not.
Minimizing the tax burden- It will increase the busienss outcomes and also reduces the tax
burden in determined approach. Company needs to implement proper taxation planning
process to increase the business efficiency.
Positive cash inflow- The business of Cosmos Company should reflects the positive Net
present value. It is observed that Cosmos Company should have inflow of cash more than the
cash outflow form the business (Weygandt, Kimmel and Kieso, 2015).

RUNNING HEAD: Strategic financial management
7
Growth, Wealth and Stability- The growth of the Cosmos Company should be more than
10% each year. In addition to this, in order to expand the busienss of restaurant it should
consistently invest at least Euro 3 million (Vogel, 2014).
Cosmos organization is following Capital budgeting theory while selecting the
particular investment project. It helps management of Cosmos Company to increase the
overall return on capital employed. For instance, if two projects require same amount of
initial investment then with the help of capital budgeting technique, management would
select the project which gives higher Net present value in the busienss.
The key concept of the financial management of Cosmos Company is based on the
deployment and sources of finance regardless of its products and services sale in market.
Company uses proper accounting and financial policy to increase the business efficiency in
determined approach. It helps management to develop an understanding of the role of
financial planning within the business operations.
Conclusion
Now in the end, it could be inferred that financial management is very crucial for the
effective business functioning of organization. If a company uses strong financial
management then it will increase the outcomes of the business.

RUNNING HEAD: Strategic financial management
8
References
Brigham, E.F. and Ehrhardt, M.C., 2013. Financial management: Theory & practice.
Cengage Learning.
Duchin, R. and Sosyura, D., 2014. Safer ratios, riskier portfolios: Banks׳ response to
government aid. Journal of Financial Economics, 113(1), pp.1-28.
Ehrhardt, M .C. and Brigham, E.F., 2016. Corporate finance: A focused approach. Cengage
learning.
Garrett, J., Hoitash, R. and Prawitt, D.F., 2014. Trust and financial reporting quality. Journal
of Accounting Research, 52(5), pp.1087-1125.
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson
Higher Education AU.
Kundakchyan, R.M. and Zulfakarova, L.F., 2014. Current issues of optimal capital structure
based on forecasting financial performance of the company. Life Science Journal, 11(6s),
pp.368-371.
Laeven, L. and Valencia, F., 2013. The real effects of financial sector interventions during
crises. Journal of money, credit and Banking, 45(1), pp.147-177.
Laudon, K.C. and Traver, C.G., 2013. E-commerce. Pearson.
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis.
Cambridge University Press.
Weygandt, J.J., Kimmel, P.D. and Kieso, D.E., 2015. Financial & Managerial Accounting.
John Wiley & Sons.

RUNNING HEAD: Strategic financial management
9