Financial Management Report: Analysis of Financial Practices at Tesco

This report delves into the realm of financial management, emphasizing its critical role in organizational success. It begins by defining financial management and highlighting its significance, particularly in the context of a multinational corporation like Tesco. The report then explores the multifaceted importance of financial management, including financial planning, the allocation of funds, and its impact on profitability and economic stability. Furthermore, it elucidates the responsibilities of a financial manager within Tesco, encompassing capital assessment, investment strategies, fund management, and monitoring. The report also examines diverse sources of finance, differentiating between long-term and short-term options. Through this comprehensive analysis, the report underscores the necessity of effective financial management for sustainable business operations and overall market success, providing valuable insights for students on Desklib.

Financial
Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
Financial Management ...............................................................................................................3
Importance of Financial Management........................................................................................3
Role of financial Manager in a Tesco200...................................................................................4
Sources of Finance......................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
Books and Journal.......................................................................................................................6

INTRODUCTION
In the current market scenario, it is extremely vital and valuable for an organisation to be
equipped with adequate financial resources so as to regulate the cash inflows and outflows of the
same. Financial Management assists enterprises in carrying out effective financial practices in
the organisation (Chandra,2020). The report discusses the the meaning and importance of
financial management in an organisation in order run the daily operations productively. It details
about the role and duty of a financial manager of the leading and multinational organisation
Tesco Plc so as to facilitate the flow of funds effectively in Tesco. The report also highlights the
sources of funds available to the business enterprises in order to procure adequate and
satisfactory funds from the concerned institutions.
Financial Management
Financial Management can be characterized as a procedure of regulating the financial
resources i.e. expenses, revenues, incomes, losses, profits, funding etc. of a business entity. It can
be termed as a practice wherein the organisations work to operate, control and manage the
financial activities of an enterprise. It promotes the optimum utilization of funds available with
the organisation, regulation of the payment, accounting principles and procedures, assessment of
the financial risk etc. It is very necessary for business organisations to have systematic financial
management system so as to ensure that the management operations of the respective
organisation are accomplishes efficiently.
Importance of Financial Management
Financial Management is an essential and prominent element of an organisation's
management functions due to the following listed reasons :-
Financial Planning : Financial planning is a method that facilitates in identifying,
measuring and controlling the future financial conditions of an organisation. Financial
management assist an enterprise in formulating and processing effective financial plans that can
help the Tesco in acquisition of financial resources and regulating their financial operations
effectively and efficiently (Madura,2020).
Utilisation and allocation of funds : Financial management serves an organisation in
effective utilisation and allocation of their funds in order enhance their current operation in the
business environment and assist the same in achieving higher benefits as well.

Enhanced profitability : An organisation that involves an excellent and systematic
financial management system is likely to gain more profitability in the target market in
comparison to a business organisation that has ineffective and inefficient financial management
system. Hence, in order to achieve high profitability it extremely essential for a Tesco to have
competent and effective financial management system.
Economic Stability : In order to run the business operations for a longer period of time, it
is extremely essential for management to encourage economic stability in its concerned
organisation (Shapiro and Hanouna, 2019). Financial Management can be termed as prominent
factor in impacting the economic stability of a business organisation.
Role of financial Manager in a Tesco200
Financial manager is an individual that is responsible for regulation and control of the
financial functions and activities of a business entity. They are expected to form and develops
finance reports and documents as well as manage and determine the transactions summaries of
the organisation (Al Muhairi and Nobanee, 2019). Some of the duties and roles exhibited by the
finance manger of an organisation are listed below :-
Assessing the capital requirement : It is the duty of the financial manager of Tesco to
assess and ascertain the needs and requirement of the capital in an organisation. Financial
managers needs to identify and analyse the organisations financial environment of the Tesco so
as determine the amount of capitals that needs to be raised in order provide assistance to the
financial activities of the organisation.
Capital investment : It is the role of the Tesco's financial manager needs to invest the
capital of the organisation in profitable ventures so as to gain good return on investment and
leverage the same in the near future. The manager needs to do a deep analytical analysis and
needs to evaluate the pros and cons associate with investment purpose of the Tesco.
Management of funds : Financial manager is responsible for managing the funds of the
organisation in a proper and effective manner so as to make sure that the organisation do not
suffers from the inadequate funds (Apte and Kapshe, 2020). The Tesco's financial manager also
needs to take care that enough financial resources are available with the Tesco and the Tesco
does not face any shortage of the same while carrying out their operational functions.
Monitoring and Controlling : The financial manager is expected to supervise , monitor
and control the financial patterns and practices of the Tesco in order make them more effective

which in turn will help the organisation to realise greater results in the future run (Paramasivan
and Subramanian, 2020).
Sources of Finance
The reliable sources and institutions which provides with necessary financial support and
financial backing to the business organisation in need of the same can be determined as the
sources of finance. There are numerous sources of finance that can be utilised and approached by
the business organisation. Few of the same are mentioned below:-
Long Term sources of finance : Long term sources are acquired by the organisation
when they require funds for a time durations of more that five years. These are the most suitable
when capital investment is needed for plant and machinery, building and property etc. For
instance, preference shares, retained earnings, bond, debentures, equity shares etc. can be termed
as the long term sources of funds.
Short Term sources of finance : Short term funds are required by organisations for the
time period of less than an year (Al Breiki and Nobanee, 2019). These funds facilitates in
financial acquisition of raw materials, debtors, essential goods, minimal cash and balance in the
bank etc. For example, payables, short term loans, trade credit, advance, creditors, fixed deposits
etc. can be termed as the short term sources of finance.
CONCLUSION
From the preceding information, it can be said that in order to raise regular funding and
to assist in effective utilisation of financial resources, it is necessary that an organisation
provides major emphasis on effectual financial management. Financial manager of Tesco Plc
also plays a vital role in enhancement of the finance related functions and operations of the
business. It can be concluded that financial management alleviates the organisation in achieving
greater heights in the market environment.

REFERENCES
Books and Journal
Paramasivan, C. and Subramanian, T., 2020. Financial management. New Age International.
Shapiro, A.C. and Hanouna, P., 2019. Multinational financial management. John Wiley & Sons.
Madura, J., 2020. International financial management. Cengage Learning.
Chandra, P., 2020. Fundamentals of Financial Management|. McGraw-Hill Education.
Al Breiki, M. and Nobanee, H., 2019. The role of financial management in promoting
sustainable business practices and development. Available at SSRN 3472404.
Apte, P.G. and Kapshe, S., 2020. International Financial Management|. McGraw-Hill
Education.
Al Muhairi, M. and Nobanee, H., 2019. Sustainable financial management. Available at SSRN
3472417.