Finance for Strategic Managers: Data, Risk & Expenditure

This report provides a comprehensive overview of finance for strategic managers, focusing on the sources of financial data used to evaluate business strategy, the necessity of financial information for formulating business strategies, risk analysis related to financial business decisions, and the various methods employed in strategic capital expenditure projects. It delves into both internal and external sources of financial data, highlighting their importance in assessing revenues, expenses, profitability, and debt. The report also identifies several types of risks, including credit, market, operational, liquidity, legal, and equity risks, that can impact financial business decisions. Furthermore, it reviews methods like Net Present Value, Profitability Index, Internal Rate of Return, and Payback Period, which are crucial for appraising strategic capital expenditure projects and guiding strategic direction. This assignment solution is available on Desklib, offering students a valuable resource for understanding strategic financial management.

Finance for Strategic
Managers

CONTENT
 Sources of Financial Data used to evaluate business strategy
Slide 3
 Need of financial information and data for formulating business strategy
Slide 4
 Risk Analysis relating to financial business Decisions
Slide 5
 Types of Methods used in strategic capital expenditure projects and strategic direction
Slide 6

Sources of Financial Data used to evaluate business
strategy
 The sources of financial information are divided into two categories that is Internal and
External. Internal sources are related to internal accounting system, payroll management
whereas external sources include supplies and customer of entity, the annual budget of
the organisation, publication made by government on regular intervals etc.
 The financial data is essential for the users connected with the business concern as it
provide information related to revenues, expenses, profitability and debt of the entity.
The financial information is available to the stakeholders from the financial statements
which includes statement of financial performance, statement of financial position, cash
flow statement, statement of changes in equity and notes to accounts.1.1 An evaluation of sources of financial data which cab be used to inform business strategy.

Need of financial information and data for
formulating business strategy
 Net Cash Available
 Growth in Revenue
 Profitability Ratios
 Economic Value Added
 Operational Efficiency
 Liquidity of Entity
 Capital Efficiency and Solvency
 Profits of Organisation1.2 An assessment of need of financial data and information in relation to formulation of business strategy.

Risk Analysis relating to financial business Decisions
The following types of risk affects the financial business decision of an entity: -
 Credit Risk
 Market Risk
 Operational Risk
 Liquidity Risk
 Legal Risk
 Equity Risk1.3 An analysis of risk related to financial business decision.

Types of Methods used in strategic capital
expenditure projects and strategic direction
The following are the methods used by the entity in order to take strategic decision relating
to accepting or rejecting the proposed project which is under consideration: -
 Net Present Value
 Profitability Index
 Internal Rate of Return
 Payback Period
 Discounted Payback Period
 Average Rate of Return1.4 A review of methods that can be used for appraising strategic capital expenditure projects andstrategic decision.

REFERENCES
 Bouaziz, F. and Hachicha, Z.S., 2018. Strategic human resource management
practices and organizational resilience. Journal of Management Development.
 Chen, Y., and et.al., 2018. High‐commitment work systems and middle managers'
innovative behavior in the Chinese context: The moderating role of work‐life
conflicts and work climate. Human Resource Management. 57(5). pp.1317-1334.
 De Luca, V.V., Margherita, A. and Passiante, G., 2019. Crowdfunding: a systemic
framework of benefits. International Journal of Entrepreneurial Behavior &
Research.

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