Finance report

This report aims to provide a demonstration of skills and knowledge obtained in order to interpret the basic financial data showing in the same time the exact same skills required in order to maintain basic financial records. An overview on illustration about how financial data analysis can help decision making in business will be provided next to calculations of liquidity, profitability and ratios analysis detailed in the case study provided.

Financial Management

In order to have and maintain healthy and sustainable any organization, regardless we are talking about profit or non-profit organizations, it is required to achieve a certain degree of knowledge regarding financial management operations and practices (Quesada, 2019). It is proven that any business, large or small, is demanding a particular system which is revealing financial records in order to maintain fiscally responsible the business.

The financial performance of an organizations can be measured through all kind of ways, such as gathering all available information from different sources. Financial Management department is using all this information in order to examine, in a particular period of time, if the organization is struggling or is performing well. Alongside all analytical tools available, arrangement and planning regarding profitability is what must include in financial management (Broyles, 2003).

According to Atrill and McLaney (2019) the aim of financial management is to provide support in decisional making process.

Accounting and Finance, two separate departments but in the same time very complimentary in what is concerned the actions enterprised by an organization, are differentiated by the fact that ‘’accounting is concerned with collecting, analysing and communicating financial information’’ (Atrill and McLaney, 2019, p.2) whilst ‘’finance is concerned with the ways in which funds for a business are raised and invested’’ (Atrill and McLaney, 2019, p.2).

Financial Management includes the following:

- Financial statements analyses - balance sheet, income statement and cash flow statement

- Capital budgeting - comparison of different investment alternatives and may include analysis of future cash flow

- Taxation

- Legal considerations - risk management and public support

- Accounting - report of financial transactions

- Sustainability - characteristic of an organization to develop strategies for growth and development

Shareholders which are always interested in making profit from their investments will use the analysis of the financial statements. The same statements can be also used by any potential investor, this way being able to determine how the organization is performing, how reasonable are the investments made in the organization and eventually they can decide if they want to invest or not (Quesada, 2019).

Three are the main financial statements that represents the base of financial accounting (Atrill and McLaney, 2019) and which need to be understood in order to decide how the organization evolves.