You are a longstanding manager in a family firm which is a small but growing organization. Your particular responsibility is finance. A new member of the family has just joined the firm fresh from Completing a postgraduate (level 7) qualification at college. He is clear that in order to ensure the business’s continued success he must develop the financial skills required to assess and manage finance within the business. He wishes to begin by understanding the role of financial information in business strategy and given your experience he has asked for your advice.
He intends to create a file on finance for strategic managers which he can use as an aide memoire.
Prepare the first section of the file providing examples where appropriate.
This must have the following sub sections
1.an assessment of why financial information is needed in business
2.an identification of the business risks related to financial decisions
3, a Summary of the financial information needed to make strategic business decisions.
The second section of the file must provide information on published financial statements. You must include at least one actual example of published accounts in order to illustrate the points you are making. This section must include
1.an explanation of the purpose, structure and content of published accounts.
2.your interpretation of the financial information in these accounts
3, a Calculation of the financial ratios from the accounts and an explanation of how they support strategic decision-making
The new manager has made it clear that he needs to understand how businesses assess and finance Various activities. The next section of the file must therefore cover
1.an explanation which clearly distinguishes between long and short-term financial requirements for businesses
2.a table comparing the sources of long and short term finance for businesses
3.an examination of cash flow management techniques and an assessment of why the management of cash flow is so important.
As the business is growing, the new manager wishes to have a section of the file which considers a number of issues related to expansion
In this section of the file you must
1.Consider different business ownership structures and analyse the corporate governance, legal and regulatory requirements of these. For each of these structures compare and Contrast the roles and accountability of Owners and managers in making decisions.
2.Carry Out an evaluation of methods for appraising strategic capital or investment projects.