Financial Management Report: Cash Flow and Financial Planning

This report provides a comprehensive overview of financial management within a business context. It begins by defining financial management and highlighting its significance for organizational success and profitability. The report then delves into the role of the finance department, emphasizing its importance in maintaining the financial health of a company and utilizing tools like budgeting and ratio analysis for effective control. Furthermore, it discusses the critical aspects of cash flow management, including the importance of maintaining sufficient cash reserves and the use of cash budgets and flow statements. The report also explores the role of the financial manager, detailing their responsibilities in monitoring financial resources, making investment decisions, and navigating the capital market. It concludes by reiterating the importance of financial planning and the use of various methods to improve a company's financial performance. The report references several academic sources to support its analysis.

Report

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
A report can be defined as the summary of numerous information. Basically, reports are
an organized form of a range of information that are needed to be communicated to their users.
The present essay includes brief description of financial management and role of finance
department in an organization. Information regarding cash flow and way of managing cash flows
within an organization. In addition, the essay also provides information regarding advantage of
having a finance manager along with importance of financial planning and financial management
in the business.
MAIN BODY
Financial management is the basic need of each business organization in order to gain
success and improve profitability of the firm (What is Financial Management?. 2018) . It
concerns with a process that entails development of financial plans for the business, organization
of each financial activity and maintaining monitor and control over each activity of the business
that have impact over the financial performance of company. In simple words, it can be said that
the financial management is nothing but application of each management principles and
performance of various managerial functions in order to manage and improve the financial
performance and position of the company.
Finance department of a company is a major part of overall organization. Smooth
functioning of each of the business organization depends upon the efficiency of its finance
department. It leads in maintenance of healthiness in the financial performance of the company
(Khan and et.al, 2018). There are various tools and techniques such as budgeting, ratio analysis,
financial reporting, etc. with the help of which finance department maintains effective monitor
and control over the financial activities of the firm.
A company needs to develop efficiency and effectiveness in the financial management
and reporting within its functioning. By gaining knowledge regarding financial management and
reporting, the business organization would be able to develop more effective plans and
procedures regarding improving the financial health of the company. In addition, through
effective knowledge regarding financial reporting, the firm becomes able to summarize each
business transaction in an effective way along with keeping records of all the activities
performed by the company as well. In this regard, it can be said the gaining knowledge regarding
financial management and financial reporting is essential for each business unit.
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Effective management of cash and cash equivalents is one of the core function of
financial management. Movement of cash and cash equivalents with or outside the business
organization is being termed as cash flow in the company. Maintenance of sufficient amount of
cash and cash equivalents is an essential requirement of each business units as it has a direct
influence over the liquidity of firm (Roy and et.al, 2018). Cash is one of the most important
financial resource of the company that helps the firm in meeting its day to day requirements. In
this regard, a company needs to develop an effective management of cash in order to eliminate
insufficiency of cash within the firm. For the purpose of improving the quality of cash flow
management, financial managers can prepare cash budgets in order to pre estimate the
requirement of cash in the business within a specific time period. In addition, they should also
prepare cash flow statement after certain time period. It would help them in analysing the actual
liquidity of the company. Through analysis of both cash budget and cash flow statements, the
company would be able to develop their more effective plans as per the need of company for the
purpose of improving quality of its financial performance.
Financial managers are those who performs their managerial functions for the purpose of
monitoring and controlling various utilization of financial resources of the company (Role of a
Financial Manager. 2019). They keep their eyes on each transaction performed by the company
that have impact over its financial performance. In addition, the financial managers are also
given a task to develop the plan for having the best use of various financial resources held by the
company. For example, in case the company has excessive of financial resources with it,
financial manager is responsible to detect the best utilization of the excessive financial resources
held by company. For this purpose, they can detect the best option where the company can invest
its excessive fund and generate the maximum amount of profit from it.
In addition, the financial managers are also responsible to have a better understanding of
the capital market. The trading in the capital market involves a huge amount of risk with it. In
this regard, it is essential to trade securities and debentures in the capital market in order to
eliminate the risk of suffering from financial loss (Hassan, 2018). Furthermore, taking effective
decision of security trading leads in improving the financial health of the company. In this
regard, it can be seen that the financial manager plays an essential role within a business unit.
Moreover, it can be said that adoption of effective strategies and plans regarding the
financial activities of the company is one of the essential element of each type of business unit.
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With the help of developing more effective plans and procedures regarding improving the quality
of financial performance in competitive market. Further, with the help of financial transactions,
the company can improve its profitability by investing the excess amount of funds held by in the
most appropriate option (Gabilondo, 2018). By developing financial plans for the company by
using a range of methods, tools and techniques such as budgetary control, variance analysis,
investment appraisal techniques, etc., the business organisation can improve its ability in
utilisation of financial resources and efficiency of generating profits from various business
activities.
CONCLUSION
The above essay states that financial management is one of the most important part of a
business. It enables the ability of firm in improving its capability of profit generation. Further,
the essay has also concluded that financial manager is one among the key managerial persons of
the company as they perform their tasks in order to ensure improvement in the financial position
of the company. Moreover, by adopting appropriate strategies and plans for management of
financial resources, the business can develop its efficiency in using resources held by the
company and generate the maximum amount of profit from it.
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REFERENCES
Books and Journals
Khan, A.A. and et.al, 2018. Apparatuses and methods for operating a portable electronic device
to conduct mobile payment transactions. U.S. Patent 9,864,984.
Roy, A., and et.al, 2018, April. Deep learning detecting fraud in credit card transactions. In 2018
Systems and Information Engineering Design Symposium (SIEDS) (pp. 129-134). IEEE.
Hassan, M.K., 2018. The Global Financial Crisis and Islamic Finance. Available at SSRN
3263920.
Gabilondo, J., 2018. Understanding OFAC’s New Restrictions on Direct Financial Transactions
with the Cuban Government. Donald J. Trump Y Las Relaciones Cuba-Estados Unidos En
La Encrucijada (Orfila, Mexico, 2018), pp.19-05.
Online
What is Financial Management?. 2018. [Online]. Available through :
<https://www3.fundsforngos.org/financial-management/2-what-is-financial-
management/>.
Role of a Financial Manager. 2019. [Online]. Available through :
<https://www.managementstudyguide.com/capital-structure.htm>.
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