Strategic Financial Management PDF

Added on - 21 Apr 2020

  • 51

    pages

  • 9741

    words

  • 8

    views

  • 0

    downloads

Showing pages 1 to 8 of 51 pages
Running Head: Strategic Financial ManagementProject Report:Strategic Financial Management1
Strategic Financial ManagementContentsTools and techniques of cost accounting..........................................................................4Concepts, features and importance of cost accounting.................................................4Tools of costing design and system..............................................................................5Recommendation..........................................................................................................6Analysis of the financial performance..............................................................................8Financial statement analysis.........................................................................................8Financial statement evaluation...................................................................................11Recommendation........................................................................................................15Budgetary process of organization.................................................................................16Evaluation of budgetary targets..................................................................................16Development of master budget...................................................................................17Evaluation of the budget and its process....................................................................18Long term and short term sources..................................................................................21Need for short term working capital and long term funds..........................................21Appropriate source of short term funds......................................................................21Choice of sources........................................................................................................22Investment appraisal.......................................................................................................25Financial appraisal methods.......................................................................................25Strategic investment decision.....................................................................................27Analysis over strategic investment decisions.............................................................30References.......................................................................................................................32Appendix.........................................................................................................................352
Strategic Financial Management3
Strategic Financial ManagementQue 1)Tools and techniques of cost accounting:1.1)Concepts, features and importance of cost accounting:Cost accounting is the concept of accounting which assists the manufacturingcompanies to identify the total cost of the company to make various decisions about theproduction, sales etc of the company. It helps the company to analyze various new strategiesfor the betterment of the company and for managing the entire activities of the company. Costaccounting is a process of classifying, recording, analyzing, allocating and evaluating variousalternative actions to control and evaluate the total cost of the company1.The main purpose of cost accounting is to offer information for various decisionsmaking in a good manner. Cost accounting assist the company to analyze all the informationrelated to the total cost of the company and it evaluates the information and presents them inan understandable state so that a better decision could be done2. Cost accounting uses theinternal as well as external sources to manage and maintain the business in a proper manner.Cost accounting evaluates the internal operations and the activities of the company in order toenhance the overall performance and the business management of the company.Cost accounting is important for every business to manage the cost and activities ofthe company. The main importance of the cost accounting is its capability to put a light overthe entire profitability position and the performance of the company. It depict about thefinancial position and workings of the business. Cost accounting permits the manager tomanage the cash flows of the company. it also assist the manager to identify that whether the1Don, Hansen, Mowen Maryanne, and Guan Liming.Cost management: accounting andcontrol. Cengage Learning, 2007.2Richard Lambert, Leuz Christian, and Verrecchia Robert E. "Accounting information,disclosure, and the cost of capital."Journal of accounting research45.2 (2007): 385-420.4
Strategic Financial Managementcompany is making profits or not, whether the organization need some tighten system andsome priorities must be reassessed according to the current performance and the position.Thus according to the above evaluation, it has been found that the cost accounting isvery significant for the organization.1.2)Tools of costing design and system:Costing design and system of an organization depicts that an organization is alwaysrequired to look over various factors and aspects while taking a decision about the costingdesign system. The costing design system is a tool which helps the organization to make thecosting reports in order to make better decisions about the performance and the position ofthe company3.A cost design system helps the manager of the company to collect the information andarrange them in such a manner that the good decision could be taken from the company andthe manufacturing process of the company could also be managed. Overhead or indirect costis calculated through it which assists the company to make various new decisions. The toolsof costing design system are as follows:a.external cost design system controlb.internal cost design system controlExternal cost design system control:External cost design control system applied for analyzing the performance and theposition of the company4. These standards are used by the companies to shape the firm in aproper way and the cost ratios are also calculated through it. Ratio analysis and the3Arik Azoulay, et al. "The use of the transition cost accounting system in health servicesresearch."Cost Effectiveness and Resource Allocation5.1 (2007): 11.4Charles T.Horngren,Cost accounting: A managerial emphasis, 13/e. Pearson EducationIndia, 2009.5
Strategic Financial Managementcontrolling power of the government and the stakeholders are the external cost design systemwhich is managed by the companies through external sources to analyze and evaluate theposition of the company as well as it also helps the company to make various better and newdecisions about the position and the performance of the company.Internal cost design system control:Internal cost design control system applied for analyzing the performance and theposition of the company through internal factors. These standards are used by the companiesto shape the firm in a proper way and the cost ratios are also calculated through it5.Budgeting, capital budget, revenue budget, standard costing and variance analysis are theinternal cost design system which is managed by the companies through internal sources toanalyze and evaluate the position of the company as well as it also helps the company tomake various better and new decisions about the position and the performance of thecompany.1.3)Recommendation:Lastly, the study has been performed over the costing and pricing system of thecomapny to analyze the best policies and strategies for improving the position of the pricingsystem and costing system of the company. An organization is always suggested to look overvarious factors and aspects while making a decision about the costing system and the pricingpolicies of the company.Costing and pricing decision of the organization could be taken through analyzing allthe internal and external cost factors of the company. These would help the comapny to makea better decision about reducing the level of the cost and enhancing the level of the price. Theinternal aspect which must be considered by the comapny while making a decision about thecosting and pricing is capital budgeting, budget evaluation, variance analysis and standardcosting whereas the external costing system are the cost ratios6. All of these technologies andthe aspect are the method to evaluate the total cost of the comapny and predict the future on5Glen, Arnold.Corporate financial management. Pearson Education, 2008.6Horne Van, James and Wachowicz John Martin.Fundamentals of financial management.Pearson Education, 2008.6
Strategic Financial Managementthe basis of financial information so that a better policy and strategy could be made by thecompany for managing the cost and pricing of the company.7
Strategic Financial ManagementQue 2)Analysis of the financial performance:2.1)Financial statement analysis:Financial statement analysis is the accounting method which is used by the companiesto analyze the financial position of the company. The financial position of the company isanalyzed on various bases. Mainly, the analyst and the financial manager of a companyanalyze the financial position and the performance of the company through analyzing thefinancial statement of a company7. For this analysis,ford motorshave been analyzed and thestudy has been done over the financial statement of ford motors.The financial statement of Ford Motors could be analyzed by the financial analyst andfinancial manager of a company on various bases such as through analyzing the last 3 yearstatement, through analyzing some key financial figures from the financial statement of thecompany, by conducting the study of the trend analysis of the company, by analyzing thestudy of horizontal analysis of the company and by conducting the study of ratio analysisover the company and through comparing these figures from the financial statement8. Theanalysis study over the financial statement of ford motors is as follows:7RobertHiggins,Analysis for financial management. McGraw-Hill/Irwin, 2012.8AlanShapiro,Multinational financial management. John Wiley & Sons, 2008.8
desklib-logo
You’re reading a preview
card-image

To View Complete Document

Become a Desklib Library Member.
Subscribe to our plans

Download This Document