(BM414) Financial Decision Making | My Assignment Tutor

London School of Science and Technology Module: (BM414) Financial Decision Making CW1 Alternative Opening Line. In order to make appropriate and informed decisions for the advancement of a business organization, in terms of its goals and objectives, the Management, particularly the Top Level Management of every business organization should have accurate and up-to-date information about every area of the business. ………………………………………………………………………………………………… TASK 1: Report to the management of SKANSKA PLC Introduction Successful business organizations are well aware and conscious of the role that Accounting and Finance play in the long-term success of the business, leading to the accomplishment of the company’s set goals, objectives and targets. This assignment provides a brief analysis of the Skanska PLC, a UK-based global contractor that provides a wide range of engineering and construction services. In particular, the report identifies and outlines a variety of functions, roles and duties of both Accounting and Finance within the above-mentioned company. Furthermore, in Task 2, the report provides details of the calculation of five key ratios that shed light on the performance of the company, particularly the company results pertaining to both 2017 and 2018 financial years. The report addresses possible causes of the changes that occurred with regard to the abovementioned ratios; and any resultant impact and effects on the financial status of the company. The report concludes with a brief evaluation of the strengths (advantages) and weaknesses (disadvantages) of some specific areas that call for the Senior Management’s attention aimed at bringing about stability, progress and achievement the company’s set goals and objectives. Analysis of the Functions of Accounting and Finance Accounting is one of the functions performed by every business organisation. It is defined as the systematic and detailed recording of financial transactions of a business. Its functions include: Recording, classification and summarization of transactions; Ascertainment of financial results of business operations; Exhibition of the financial position of a business organization during specific periods; Communication of relevant information obtained from analysis and interpretation of accounts; Preparation of financial accounts and statements, including Income Statement or Profit and Loss Account, Balance Sheets and Cash Flow Statements; The day-to-day record-keeping and reporting of financial matters to the Management for purposes of decision-making. Analysis of the Roles of Accounting and Finance Accounting provides management information regarding, among other things: The financial position of the business regarding profit and loss, cost and earnings, liabilities and assets, etc. Management information, which is of interest to stakeholders regarding the performance of the company. Information about legal requirements, such as HM Revenue and Customs, VAT assessment, Corporate Tax and Income Tax. Information for other interested parties – prospective lenders of money e.g. banks § Information for prospective investors in the business The role of Finance within a business organisation includes: The provision of financial information to the other departments in order for them to operate effectively and efficiently. Finance supports the business with planning and decision-making. Analysis of the Duties of Accounting or Accountants The core responsibilities of Accountants include the preparation of accounts, budgets, and managing financial information and records. Some of the key duties of Accountants include the following: They prepare the business accounts and tax returns; They monitor budgets and general spending; They advise the Management on various aspects of Financial Management; They analyse financial records in relation to the company’s performance; and They scrutinize financial records and ensure that they comply with legal requirements. Explanation of the structure and terms used within the financial statements The key structures of financial records and statements include: Income Statement (also known as the Profit and Loss Account); The Balance Sheet; and The Cash Flow Statement. Some of the terms (5) used within financial statements include the following: Example: Liquidity – this refers to a situation whereby a business organisation has sufficient funds (cash) to pay its debts or to pay its creditors. (1) – – – – –Search for Accounting Terms on Google; Then pick any five terms that you already know. List them and briefly explain their meaning. Application of management accounting techniques for planning, control and decision-making within a business organisation Management decisions that require Management Accounting information to help and support managers with making decisions fall into four major areas, namely: Developing long-term plans and strategies Performance evaluation and control Allocating resources; and Determining costs and benefits. The Role of Management Accountants Management accountants are qualified to work across the business, not just in finance. They fulfil the following role: They advise managers on the financial implications of big decisions. They formulate business strategy and monitor risk – much more than just crunching numbers. They use information of all kinds to lead and inform business strategy and drive sustainable success within the business organisation. Evaluation of any aspect of Accounting and/or Finance Identify any three strengths and three weaknesses of Accounting and/or Finance: Strengths/ Advantages Weaknesses/ Disadvantages Example: By formulating a businessExample: Whereas ratios can diagnose strategy and constantly monitoring risks,the strong and weak areas of the accounting and/or finance can save thebusiness performance, they can often business potential losses.not identify the causes. 1) 2) 3) STRENGTHS WEAKNESSES. Take this draft home Familiarize yourself with it Customize it and make it your OWN Then, let’s move on to TASK 2 after the Easter Break v