Accounting for Decision-Makers (Assessment 2): Sainsbury's Report

This report analyzes the financial management practices of Sainsbury's, focusing on corporate planning, growth, and success. It explores strategic planning, profit planning, and fund-raising strategies essential for the company's financial health. The report delves into key aspects such as cash management, ratio analysis, and budgeting within Sainsbury's. It highlights the importance of strategic financial management, including risk management and customer review, and discusses elements like budgeting, investment appraisal, and financial decision-making processes. Furthermore, the report examines how Sainsbury's utilizes various financial tools and techniques, including ratio analysis and budgeting, to make informed decisions. The conclusion emphasizes the significance of financial planning in optimizing resource utilization and ensuring business growth and success.

ACCOUNTING FOR DECISION-
MAKERS
(ASSESSMENT 2)

Table of Contents
INTRODUCTION...........................................................................................................................3
ASSESSMENT 2.............................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Financial planning is the process of setting policies, rules and regulations for the fund
collection, effective utilization and proper management to reach the financial outcome. The
report will determine the role of corporate financial management in corporate planning, growth
and success.
ASSESSMENT 2
In the Sainsbury's firm the business planning and strategy are required for the
management of the financial condition and these are essential for the growth and development of
the company. Strategic planning is required for the firm to achieve the long term organizational
goals. Financial management in the Sainsbury's is refers as the process of collecting required
fund and its proper management in an effective manner to achieve the set target goals
(Holtzblatt, and Tschakert, 2011).
Corporate finance is the area in which Sainsbury's have to take the right actions for the
betterment of enterprise increase their value related with entity so they gain more profit.
Preferential target of the financial management can be to increase the profitability, gain and
minimize the expenses and market share. This is the most important target for the firm to make
the money and keep for the long term objectives in future (Kemal, 2011).
There are various role of financial management in which the management of Sainsbury's
should prefer the proper utilization of the fund and acquisition of the fund for the future security.
In the business planning and strategy of the financial management there are some points included
in it like; raising the fund, profit planning, understanding the market trend, allocation of the fund. Profit planning: Profit planning is the main factor included in the finance managing
process of the Sainsbury's organization in which they planned the investment of the fund
in right place so that they can gain more profit in compare with the other firms. Profit
earning is the major factor consist in every firm to boost their business growth, Moreover
this planning is require for the firm to sustain the recent market trend and survive
properly (Quattrone, and Hopper, 2001). Fund raising: It is also main section of finance managing in which Sainsbury's can raise
their fund by applying the sources related with deabt and equity oriented sources of
finance. Or it can be referred as the accountability of managerial personnels of finance

field to maintain proper ratio related with the internal and external liabilities. Because it
is very important to maintain the ratio between both of them for the betterment of the
firm.
 Management of cash: It is the major factor because cash is required for many purposes
like salary, wages, and payment of the bills like electricity and water or more. Pre
planning must require for the managing the cash and maintain it with the all members and
workers who belongs to the firm (Saleem, and Rehman, 2011).
The definition of strategic financial management is referred to reach the objectives of any
business company there are some financial resources which are to be used and their shareholders
have will get the maximums return value. For utilising financial resources at maximum values a
plan should be devised and through this they does meet their goals. To take an appropriate action
for the betterment of the company, analyzing the data, financial decisions, budgeting and
problem identification these are some task that a company has to do. Operation of Sainsbury and
elements which are involved into those operations are constructed to use the financial resources
on maximum level. Strategic financial management have key elements on which it depends,
budgeting, management of risk, customer review and a detailed evaluation. These are elements
that Sainsbury should have in his financial strategy. In a strategic financial planning it is so
important for Sainsbury to maintain a budget so carefully and operation of its expenses should be
managed. The above mentioned company can have a help in functionality with the correct
budgeting and financial efficiency can also be maintained by this factor.
Risk management is also a key element for the strategic financial management and this is
so essential to hold the possibility of risk at minimum level. Risk management of Sainsbury can
be done by potential financial evaluation and a capital expenditure should be made by the
financial manager of the organization. They will reach a better position if their expenditure is all
above the expectation of market (Saleem, and Rehman, 2011). The resources should be utilised
on maximum size. The expenditure must have the involvement of the legal and financial policies.
Sainsbury is a retail company of UK so their financial plans should have the details of its relation
with relative customers and shopkeepers. Ratio analysis: There are so many factors that make an impact on decision making of
Sainsbury, one of them is ratio analysis. It is basically a way to make financial statement
of particular organization. It provides a overview about performance of any Sainsbury on

financial stage. The basic ratios which are included in that analysis are short term ratios,
debt management ratio, asset management ratio, profitability ratios, market value ratio,
current ratio etc.
 Budgeting: It is an expression which redirects the financial plan of any organisation.
Sainsbury do have their budgeting plan in which they have sales budget which is planned,
it also covers the revenues, quantities of resources, cost of the expenditure, expenses
record, assets of the organisation, and files of cash flow. In this context there is another
form of budgeting which is containing the budget of investments of long terms and
various planning process. The hosted retails company in UK also made so investments in
the firm for the machinery, new offices, packing equipments of the products and project
of research development and the other investments (Kemal, 2011). Capital budget of
Sainsbury is formed by various techniques like Payback Period, NPV, Profitability Index
(PI), and Internal Rate of Return(IRR), discounted payback period and Accounting Rate
of Return.
CONCLUSION
Report concluded that financial planning is of great importance that enables Saisnbury to
gather required amount of capital for the operational as well as capital expenditures and optimum
use of resources. Moreover, various key techniques like budgeting, investment appraisal, ratio
analysis and trend evaluation can be used by the directors for assessing their performance and
make excellent decisions for the business growth and success.

REFERENCES
Books and Journals