(PDF) Strategic Financial Management Assignment
Added on 2021-02-20
16 Pages4113 Words626 Views
Finance
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Finance for StrategicManagers
Contents
INTRODUCTIONStrategic financial management is a process by which company manages its finances toby doing business operations in efficient and effective manner to succeed in enhancing itsprofitability. Strategic managers of an business organisation shall required to have fullknowledge related to financial management which is essential for long term survivability of thecompany. For better understanding of this topic, a company named Samsung Plc is given forbetter understanding which is engaged in providing various electronic innovative products suchas smart phones, television and so on. Evaluation of financial statements of Samsung Plc is alsogiven in such report to asses the current viability of the company and making recommendationsbased on such interpretation.TASK 1Evaluation of the sources of financial data that are utilised for knowing the business strategy:Financial information of an company like Samsung Plc are very useful for it keystakeholders to measuring the its business strategy which a company has made for its futurebusiness operations. Such information is also help the company in evaluating its businessprocesses in finding that whether it perform well in achieve its goals and objectives (Gliedt andHoicka, 2015). some of the financial data that are helpful in identify its business strategy whichis as follows: Net cash available: Any company's net cash may gives information about itsfinancial fitness. More cash in hand in an organisation indicates that company hasutilising its financial resources in efficient and effective manner to generate morecash for new investments (Ward, 2012). Revenue Growth: A good growth in company's revenue shall indicate that it hasperformed its business operations in good manner and it indicates that company hasgood scope in future and company has capability to succeed in the long run. Profitability ratios: It ratios provides the information about operational efficiency ofan company and provides the areas where company is required to take somecorrective actions. It may be helpful for various key stakeholders in knowing thevarious information about the company's business strategy because it takes variousaspects of its operations such sales, profits in the given accounting period.1
Assessment for need of financial data and information for formulation of business strategy:In any business organisation, financial data is very beneficial as they provide the valuableinformation about the such company to the management and helps the management staff in informulation of its key business strategy. Some of need of financial data in formulation processare as follows:Vision statement: Creation of this statement of a company requires the information anddata related to its financial data because by assessing the current financial position of anorganisation, it may be able to make its vision statement (Stead and Stead, 2014).Therefore, it is said that such statement acts as a road map that help the company inguiding the management staff related to its internal works. But on the other hands,preparation of such is not so much easy because company has to take a balanced viewthat includes both forward looking view along with providing ideal state while creatingvision statement. Mission statement: This statement may be defined as company's long term plans which itwants to fulfil in log run. For establishing the mission statements of an company, variousfinancial information such net cash available in present, its profitability position etc.(Hill, Jones and Schilling, 2014). In other words, it may be said that it is a statementwhich defines about organisation's philosophy, identify and their future plans. This willassist it in formulating its goals and objectives to provide direction for its day to daybusiness activities. Analysis of risks related to financial business decision:These include various type of risks when an organisation its finance related decisions,some of are as follows:Market risk: It relates with risk when a company wants to change the conditions relatedto market place from where it compete for its business. In other words, market fromwhere an organisation sells its products plays a significant role, if market is neutral forits new product then it is said that company has no power to influence such market. Credit risk: It is risk which is related to its customer when a company decide to changeits credit period. Company shall required to assess all the possible effects of such changeand according take decision. If by decreasing the credit period given to customer,2
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