Importance of Accounting and Finance Functions within Skanska PLC

WRITE A REPORT TO THE
MANAGEMENT OF
SKANSKA PLC
CRITICALLY
EVALUATING THE
IMPORTANCE OF
ACCOUNTING AND
FINANCE FUNCTIONS
DUTIES AND ROLES
WITHIN SKANS

TABLE OF CONTENTS
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
TASK 1.......................................................................................................................................................3
Importance of Accounting and Finance functions and duties within SKANSKA PLC............................3
TASK 2.......................................................................................................................................................6
a) Calculating the financial ratios of Skanska Plc................................................................................6
b) Commenting on Skanska Plc. Financial performance.....................................................................8
CONCLUSION.........................................................................................................................................13
REFERENCES..........................................................................................................................................15

INTRODUCTION
Financial Decision making is systematic procedure of formulating important strategic
planning for the purpose of acquiring, managing and controlling monetary resources of
organization. In the current era, it play significant role in continuing business operations in
smooth manner. The present report is based on the Skanska Plc. (SP) that’s UK based
construction firm. In current report importance of finance and accounting functions with its role
will be mentioned. Present case study will show calculations of ratios for SP and will comment
on its financial performance.
MAIN BODY
TASK 1
Importance of Accounting and Finance functions and duties within SKANSKA PLC
Accounting function and roles within company
Accounting plays a vital role in order to provide the financial information to all
stakeholders of a business. With the help of accounting functions, SKANSKA PLC also
measures and summarizes the activities of a firm and then communicates the results to
management as well (What are the function of accounting,2021). There are different roles and
functions of an accounting and some of them are as mentioned below:
 Accounting assists a business for a systematic record-keeping of its financial transaction
on regular basis. Such that, with the help of accounting, company is able to feed day to
day activities within a business in order to track the performance and maintain inventory
as well.
 Through accounting, company is able to communicate the results to the management of a
firm (Cockcroft and Russell, 2018). For example, through accounting, SKANSKA PLC
is able to determine the overall net profit for a month, quarter, half-yearly and yearly with
the help of its financial statements. Further, it can be stated that it helps a business to

communicate the profit to its relevant stakeholder so that they make their rationale
decision-making.
 With the help of accounting standards, quoted company also keep complied with te
relevant laws in order to its smooth functioning (Cvitanović, 2018).
 Accounting not only plays an important role in recording all business transaction, but also
ensures no one uses assets in an unauthorized manner which belongs to the enterprise.
This function assists a business to maintain the overall performance and keep track upon
its overall activities.
 The biggest role played by accounting within SKANSKA PLC is to ascertain the profit
earned or loss sustained by an enterprise within any accounting period (Crookes and
Conway, 2018). So, it is possible only when business have effective records of all its
business transaction, revenue and expenses. This in turn assists a company to meet the
defined aim and also track the performance of a company.
 Accounting is related to its final statement like balance sheet and profit and loss accounts
which entails the actual financial performance of a company. Therefore, with proper
record keeping, company is able to determine the exact performance which includes
profitability, liquidity, solvency of a business. Along with this, it also compares the same
with last year profit margin.
 With the help of accounting, company is able to analyse and interpret the data in order to
receive the meaningful information. Therefore, it assists to determine the actual
performance and examine the overall performance of a company.
 SKANSKA PLC is able to improve their decision making process with the help of
collecting information from accounting. Hence, accounting provides a crucial
information and evaluating a viability of an investments. Thus, it can be stated that
through effective accounting knowledge and records, company is able to determine the
actual performance and make relevant decision for future as well.
Finance function and roles within company
Finance functions calculate the financial information and also suggest the best ways
through which the company enhance the overall performance of a business. This function is
relied upon two main aspects such that speculation decision in which company determine where