BAA754 - Know About Advanced Finance for Decision Makers


Implicating the advance finance for decision making will be helpful and adequate as per analysing and making the appropriate decisions which will be relevant with the operations of the business. In the present report there will be discussion based on various operational techniques, budgeting methods etc. which will be helpful in meeting the level of revenue and structural capital. Analysing the various outcomes which are comprised of making qualitative changes in various operations which will be helpful and adequate as per meeting the goals and stabilising the firm in ascertaining the financial requirement. The suggestion will be provided to the professionals working in various organization as per controlling the costs as well as managing the operations of firm.


1.1 Examine and Explain the factor that guide and drive business decision-making.

Decision making is one of the most important function in an organization. Every operation in a company needs a decision on the working of the company. Decision-making is the crucial task for the management, there are many factors which effect and influence the decision making in the present and future. Some of these factors are:

Return On Investment: it is one of the main factor that influence the decision making process in any organization. Considering the factor of profitability of the company at the time of decision making is very important. Return on investment is the difference between in  the money which a company invest in different activities in the business  like marketing, operations , inventory etc. and the actual return a business is getting (Nash, 2018). By estimating the return on investment it is very east to decide for the business weather the potential returns justifies the expenses and risks involved in creating implementing different activity plan  business.

Image and Brand Management: Decisions on where to advertise and sell and  at what price the product is to be sold, the social activities a company engaged in have a huge impact o the brand image of the company. Brand image of the company focuses on public perception and intangible gains for the company. At the time of making decisions , concerning about public perception can influence decisions about product, sponsorship and public relation campaigns. Brand awareness can influence the sessions regarding pricing, marketing and displaying products and services.

Opportunity cost: decision on making involves the best use of available resources which involves the decision of choosing best alternatives between two or more options. An opportunity cost trade off is an influencing factor in these type of decisions (Libby, 2017). what a business gets by choosing one alternative over another and what a business has to give up is the trade off decision of a company.

1.2 Assess the significance of financial factors in business decision-making.

In decision-making process of any organization, finance is very important factor. It Is the basic requirement for any activity in the business. Based on the revenue and outflow of the business many decisions is taken. The significance of financial factor in business decision-making are:

  • Personnel: Labor is one of the most important costs for a business which it securely sustains. Each employee in the company represents a significant dedicated cost, which it expects a return on investment while hiring the employees. The cost of an employee is considered as an investment in growth and revenue of the business, hiring more employees is considered as business expansion and growth of companies capabilities. When finance of the company allows, companies may take the personnel related risk to achieve growth.
  • Growth: any company wants to grow to increase revenues, margins and profits. The financial position of the company is to be calculated in order to grow  the size of business, market, to ascertain risk management and ownership (Klychova and, 2015). Available capital includes cash in hand, available credits and investment capital is the main resources for the growth of the company.
  • Cost cutting: the company has to make decisions to cut the cost in order to preserve the profit margins if the finance resources is not up-to the mark. If the revenue of the company is decreasing, it may lead the company to become tighter on its various activities like purchasing, training and equipment, travel expenses etc.

1.3 Identify the characteristics of business risks that impact on financial and business decisions.

Any difficulties in business and financial and operational activity in business can leads to the possibilities of the business risk and uncertainties. Each risk carries different implications for business owner to overcome. Financial and economic condition can also  effect the financial and business decision of the company. The business risk that will effect the financial and business decision are:

  • Market fluctuations: the fluctuations in the demand and supply of the product in the market can effect both financial and business decisions. With the decline in the demand of the product, the decision regarding operational management will be effected, as well as the financial decision regarding the increase in production and inventory amount will be effected. market fluctuation leads to worsened the gross margins and profitability which leads the management to change the business decisions.
  • Fluctuations in foreign currency and interest rates:since the cost and the value of assets and debts of business operation  are influenced by the fluctuations in interest rates or currency rates in market, it will affect the financial condition of the business (Heitzman and Huang, 2018). The business, than has to make new decisions regarding sales volume and material volume in foreign currencies.
  • Competition: More the competition in the market more the risk of loosing the customer for the business. The business has to take new marketing decision to attract the customer. With the increase in competition in the market, the sells of the product will decrease which leads the business to reduce its price which will affect the profit margin of the company.

1.4 Summarize the financial priorities that need to be considered when making financial decisions.

Before making financial decision, management should ascertain what are the financial priorities of the company. Financial decisions is a comprehensive financial planning and wealth management firm that helps high-net-worth business to achieve their financial goals. Financial goals are made by making the financial priorities. The financial priorities to be considered for decision making are:

  • Cost control: this measure is used to reduce or control the business expenses. By identifying and evaluating  the business's expenses, management can determine weather those cost are reasonable and affordable. For this a proper budget should be made, and on the basis of this budget operation cost could be reduced through methods such as cutting back,moving to a less expensive plan or changing service providers. Cost control is one of the financial priorities of the company to set a goal of cost effective measures of operations.
  • Profit Maximization: a companies most important goal is to make profit. Profit maximization is the foremost important priority of a company. High operating profits can mean that company has effective control of cost. To maintain the expenses the profit maximization should be achieved. A specific measure should be set to determine weather the company has achieved the the profit as per the aim or not (Pratt, 2016). For example, the company has make a goal to attain 10% of profit margin of the business per year, so the decision will be made according to aim set by the business.
  • Sales-revenue enhancement: sales revenue is company's sale over a given period of time. Increasing in  the sales revenue is to be considered before making financial decision. Increasing in the sales revenue will increase the market share of the company at the same rate as the total market. A business weather small or big will always want to enhance its market share as it will enhance its sales revenue for the business.


2.1- The method of cash focuses on the instant identification on the expenses and revenues while accrual basis focuses on forecasting of incomes and expenses. 

Basis of        comparison

Cash basis

Accrual basis


The cash basis method of accounting in which incomes are recorded in the statement when the cash is actually received and expenses are recorded when they actually paid out.

The accrual basis is the accounting in which incomes are earned, (yet not received) recorded in the statements and the expenses occurs (yet not paid) are recorded in the statement.


Cash basis of accounting is effortless in nature

Accrual basis of accounting is complex in nature


Cash basis of accounting is not recognizing under the companies act 2013

Accrual basis of accounting is recognized by the method of companies act 2013.

Income statements

In this method of accounting, statement of accounting shows the lower income

In this accrual basis method, the income statements show the high income comparatively.

Applicability of matching concept

Cash accounting do not adjust with the matching concept

Accrual accounting fully implies with matching concept.


Cash is received in the case of income and paid in the case of expenses (Graham and, 2017)

Revenue is earned in the case of income and expenses incurred in the case of expenses.


This method of accounting is more suitable for the sole proprietorship or contractors,

This method of accounting is more suitable for, enterprises, firms.

The change in cash and accrual basis effect the business decision making as businesses grow their financial need keeps on changing. Whether a company is experiencing a change in revenue or in expenses.

2.2- explain the structure and content of final accounts and their uses for business decision making

The structure of final accounts consists of the following -

1- Profitability account

A profitability account is an amended form of trading and profit loss account. It records all the trading expenses through which the gross profit identifies and records all the expenses which the part of trading is not (Bruch and Feinberg, 2017). The profitability account provides a deeper insight of margin generated over the expenses. Profitability statement shows manager and investors whether the company made or lost money during the period being reported.

Its sub-content is

  •  gross profit or loss
  •  office expenses, selling and distribution expenses
  •  miscellaneous expenses (Loan, interest on capital, repair charges etc.)
  • other income (rent received, commission earned etc)

 2- Balance sheet

After making a profitability statement, balance sheet is prepared which shows the exact financial position of the business (Veatch, 2017). To ascertain this balance sheet statement contains all assets and liabilities of the enterprise.

The sub contents of asset and liabilities are as under

  • Current liabilities  
  • Fixed liabilities
  •  Reserves
  • Capital
  • Current assets
  • Fixed assets

3- Statements of cash flow

Cash flow is the statement which shows the inflow and outflow cash and cash equivalent. It includes the following sub content -

  • Cash from Operating activities (receipts from sales of goods and services, interest payments, income tax payments etc)
  • Cash from Investing activities (purchase or sale of an asset)
  • Cash from Financing activities (Issue and redemption of shares and debentures etc)

2.3 interpret the financial information in the financial statements you have obtained and illustrate differences between the sets of accounts

financial statements include a preparation of balance sheet and an income statement. Preparation of balance sheet consist of assets and liabilities, equity of a specific date in time. And the statement consists of company, revenue, expenses, and net income (Karl, 2018). The interpretation of financial statement is an important management tool as it signifies the analysis.

Following procedure is to be followed to interpret the financial statement

  • Firstly, prepare the common sized balance sheet for the financial statement which shows the dollar value of the income and expenses account.
  • Secondly, do the comparative analysis of the financial statements taking common sized balance sheet as a base.
  • Thirdly, apply the ratio analysis. By calculating the several financial ratios that helps to measure the company's performance. Therefore, the interpretation of all the financial statements should be done separately (BucherKoenen and, 2017). For example- To interpreting the balance sheet interpretation is done with the help of quick ratio, current ratio, debt equity ratio etc. To interpret the income statement, gross profit margin, operating profit margin, net profit margin etc. to be identified for interpretation. For interpreting cash flow statements, interpretation of cash from operating, investing and financing activity to be done.

2.4 Differentiate Between Financial Decisions Relating To Capital Expenditure And Those Relating To Revenue Expenditure.


Income statements

Balance sheet

Fund flow statements


Income statements shows the company's revenues and expenses during a particular period.

The position of assets and liability of particular company shown in balance sheet

The change in working capital between two balance sheet data is shown in fund flow statements 


It results revenue from entity's operating activities.

The value of asset and liability at particular point of time is discloses by balance sheet (Farrell and, 2017)

The fund flow shows the uses and sources of fund.


By providing management with an overall view of the business as its contribution.

Balance sheet cannot used as a tool for financial analysis to the top management.

Fund flow is the tool for financial analysis to the top management.


Capital expenditure

Revenue expenditures


The future economic benefits are generated by the capital expenditure

The current year benefits only generated by the revenue expenditures


Capital expenditures occurs one time only.

Revenue expenditures occurs frequently


Capital expenditures occurs for long term

Revenue expenditure occurs for the short term

Shown in

Capital expenditure is shown in the balance sheet, in asset side as well as in income statement

Revenue is shown in only income statements.

The above differences in capital expenditure and revenue expenditure mainly effects the financial decision. Financial decisions are of mainly three types like investment decision, financing decision dividend decision. The effect of expenditures is mentioned below

  •  Investment decision – the different in revenue and capital expenditure effects the investment decision because funds are involved and are available in limited quantity, so the tenure of both the expenditure effects investment decision to achieve the goals of wealth maximization.
  • Financing decision - financing decision includes minimization of cost, maximization of sales etc. The capital and revenue expenditure effect financing decision as when they occur they cause derail in finance decision (Graham and, 2017).
  • Dividend decision - The third major financial decision relates to the disbursement of profits back for whom those invested. The term dividend refers to that part of profits of a company which is distributed by it among its shareholder. Dividend is the profit for shareholders but it increases the expenditures of company.

2.5 Financial analysis of Morrison and also suggesting the usefulness of ratios analysis in decision making










Profitability ratio

GP margin






Net sales



NP margin






Net sales




Current ratio

Current assets





Current Liabilities



Quick ratio

Current assets- inventories





Current Liabilities



Interpretation: Addressing the outcomes derived on the financial analysis of Morrison which consist of records of years 2017 and 2018. Thus, it can be said that there is not that much variations in the outcomes. The profitability index of both the year has reflected the same proportionate results. Thus, it can be said that revenue and costs incurred in operations are similarly rising in some proportion. Thus, it can be said that the profitability of firm is quite favorable and which helps in bringing them the most appropriate and adequate determination of the facts. On the other side, as per considering the liquidity or the short-term solvency of entity which brings the outcomes as there is no that much variations in the outcomes only the rise in quick ratio in 2018detremines the rise in liquidity level. Thus, it can be said that firm is having appropriate outcomes and will have profitable growth in the coming period.

Importance of ratio analysis in decisions making:

In relation with analyzing the financial stability and viabilities of the organization the determination of various ratios plays main role in bringing the accurate analysis over the outcomes which have been analyzed and tasted by the professionals. Ascertaining the financial strength of firm will be helpful to the investors in analyzing capacity of entity in meeting debts in the right time (Bruch and Feinberg, 2017). Analyzing profitability ration which will be helpful in addressing operational capacity and efficiency of unit. Similarly, identifying the liquidity ratio which in context with helps in analyzing the short-term solvency as well as measurements of various operational units. Moreover, the benefits which are associates with the planning and administration will be helpful in measuring the operational gains and the viabilities to meet the debt, solvency and profitability level. It discloses the clear details regarding efficiency of firm on which investors will make investment decisions. On the other side, as per considering the internal benefits where professionals will make decisions relevant with operational improvements in the firm.


3.1 Difference between business ethics, corporate governance and accounting ethics as controls on business accountability

The major point of difference between business ethics and corporate governance of an organization is that ethics are termed as descent standard of philosophy and moral which a corporate attempt to stand but the corporate governance is a way with the help of which an organization attempts to remain ethical with the maximizing of profit. Depending on the type of organization corporate governance, vary in terms of obligations. Whereas, accounting ethics are the access of financial information to an accountant. This power of an accountant of the firm benefits the organization in terms of enhancement of company's perception regarding the abuse of information or manipulation of numbers. The main difference between business ethics, corporate governance and accounting ethics is that al of them are set by different authorities in order for the smooth functioning of a firm (Crane and Matten 2016.). Business ethics are decided by the management of an organization itself, corporate governance are abided by the law which includes honesty and transparency in accounting or in other management practice of the organization and accounting ethics are decided by International Accounting Standard Committee (IASC) and International Financial Reporting Standards (IFRS) with the usage and application of these standards. All the ethics and the corporate governance are set for the to carry the one objective and that is smooth functioning of an organization by remaining ethical but all have different aim of application and are formed to solve the various issues of a business.

3.2 Assessing the role of the finance director/chief financial officer as a guardian of business ethics

The operation in finance of a corporation is uniquely qualified in order to take the role of leadership in fetching out the ethics of an organization because finance has been plugged virtually into all the facets of a business. A chief financial officer has so many responsibilities and roles to carry very effectively (Soltani  and Maupetit 2015). They put all the emphasis on face to face conversation with the employees which includes the financial boot camps and different skill-up meetings where a CFO has to be present for employees at various levels of an organization. Some of the roles has been discussed below: -

  • The primary role of a finance director is to identify the individuals with appropriate financial profile in order to act properly in the primary function with the finance eye. '
  • To provide the various training programs according to the enterprise.
  • Conducting the implementation of compliance practices and ensuring the activities that support governance.
  • In order to have best results, a CFO has to partner up with the technology function to fetch the best results for the organization with less efforts which in return increases the technological productivity as the planning for resources of an enterprise are planned well beforehand and not autonomous.
  • The most vital function of finance director is to assist the internal customers including the individuals of organization such as operation manager, who needs the financial data to determine the decisions on pricing etc.

3.3 Analysing the key concepts and principles of corporate governance that may impact on business decisions

  • The Board has approved the corporate strategy which aims to generate sustainable long-term value for an organization by selecting a chief executive officer (CEO). This principle impacts positively to the organization in the form of capital allocation for long-term growth and managing the risks effectively by setting the objective of 'tone at the top' for ethical conduct of business decisions of an organization.
  • Management produces the oversight of the board and the committee for an organization who is responsible for producing the financial reports of the business that shows financial position of the organization (AUTHOR and DIRECTOR 2015). Business decisions are affected at the time of results of operations when there are disclosures of investors who are interested in assessing the financial and business soundness.
  • Corporate governance allows the organization to put forward the positive traits on display for the investors. On being made visible it impacts the organization to be accountable for the behaviours and actions and thus the companies are more away from duplicity.
  • In the attempt to minimize the risk of distrust, organizations go out of their way to fulfil the social responsibility in the materials of corporate governance.
  • Another strategy of corporate governance which lays emphasis on various organization's culture in order to put business priorities aside. The unique culture of a firm evades everything from vision to values, work environment etc. in this way it impacts the business decisions to set values, rules of working and vision.

3.4 Examining key national and international financial reporting standards that are relevant to business decisions

International Financial Reporting Standards (IFRS) are a specific defined set of accounting standards which states the way of reporting the particular type of transaction and other business events. They are issued by International Accounting Standard Board (IASB), which clearly describes the working of an accountant and the way in which they can maintain and report the accounts. IFRS were introduced in order to have a common language of accounting which is helpful for accountants and businesses to understand company to company and country to country. The standards mainly aims at maintaining the stability and transparency in the financial world. (Tricker and Tricker 2015)

Following are the various aspects of business practices for which IFRS set the mandatory rule:-

  • Statement of financial report- It is also known as balance sheet which impacts the way in which the reporting of elements of balance sheet are made.
  • Statement of comprehensive income- It is a form of a single statement, or it can be stated as profit or loss account and statement which shows the position of equipments and property.
  • Statement of changes in equity- also termed as statement of retained earnings which states the changes in earning or profits of the company for a given time period.

Statement of cash flow- this is the summary of financial transactions for a given period with the separation of cash flow into operations, investing and financing.


4.1 Explain the difference between long-term financing needs and working capital needs for businesses.

Basis of Difference

Long term financing

Working capital need


Long term financing means financing that compasses a longer stretch of time that could go for a year or more to face the shortage of capital.

Working capital financing is to finance the everyday operations of the company.


Long term financing is less flexible because amount of fund raised using sources of long term financing can not be changed as per requirement.

It is more flexible than long term financing  because the amount of fund raised can  not  be changed as per the requirement (Oulasvirta, 2016).

 Time  period

Long term financing is more than one year

Working capital or short term can be financing for a shorter span of time from one day to  18 months.


Long term funding can be done from shares, debentures, public deposit, term loans from bank, loan from financial institution, etc.

Working capital sources are customer advances, short term bank loans, overdraft agreement, letter of credit etc.



Long term financing is used to buy non current fixed assets, expansion of companies, construction on a big scale.

Short term funding is raised to meet daily expenses, to increase level of current assets and working capital.


4.2 Compare sources of long term finance and working capital finance for businesses.

  • Long term financial sources: it is a source of financing that is provided for more than a year. The firm which are facing shortage of capital, take the long term financing.

 The long term financial sources are:

1. Equity Shares: the public limited company can raise funds from public or promoters as equity share capital by issuing ordinary equity shares. Equity share capital also provides security to other investors of funds. Hence, it will be easier to raise equity share capital.

2. Debentures: it is a document of acknowledgment of the debt with the seal off the company. t contain the term and condition of loan,payment of interest, redemption of the loan and the security offered by the company. It is an instrument of raising long term loans.

3. Loans from Financial Institution: firm getting long term loans by raising loans from the financial institution. Term loan also referred to as term finance, represent a source of debt finance which is repayable in less than 10 years (Marshall, 2016). Term loans are secured borrowing  a s significant source of finance for investment in the form of fixed assets.

4. Retained earning: When a company retains apart of its profit in the form of free reserves and same is utilized for further expansion and diversification programes , it increases the net worth of the business. It is the cheapest method of raising a long term finance. Short term or Working capital:Working capital finance is a loan that has the purpose of financing the everyday operations of a company. Working capital loans are used to cover accounts payable, wages, etc.

The sources of working capital financing are:

1. Loans from Commercial banks: small scale business can take loans from commercial banks with or without security. This loans can be repaid either in lump sum or  in installment.

2.Public deposits: short term funds can be raised by inviting shareholders,employees and general public to deposit their savings with the company. It is simple method of raising funds from the public.

3. Bank overdraft and Cash credit: overdraft is a facility of exceeding the current account balance for a short period of time. Cash credit is an arrangement whereby the banks allow borrowing money up to a specific limit called cash credit limit.

4. Advances from customers: demanding the advance payment from the customer is an easy way of raising short term funds.

4.3  Identify why access to working capital is critical to business continuity.

Working capital is the part of the capital employed of the company. It is the difference between short term liability and short term assets. In general it is the cash required to meet the day to day expenses on salaries, wages, rents, advertising etc . It is more like  heart of a company, if it is weak ,the business can not survive or will be difficult to survive. Working capital not only important but should also be in adequate amount. Working capital is the lifeblood of the company as it is important for the smooth operational function. Working capital is important for a company and its continuity, importance of working capital are:

  • Strengthen the solvency: Working capital helps to operate the business smoothly without any financial problem for making the payment of short term liabilities (Gordon and, 2017). Purchase of raw materials and payments of salary, wages, and overhead can be made without any delay.
  • Enhances the goodwill:  A firm with strong working capital position can make timely payment of its outstanding bills. This enhances the reputation of the firm.
  • Meeting of contingencies: any unforeseen contingencies like business depressions, financial crisis due to huge loss can be overcome if the working capital is maintained by the firm.

4.4 Critically examine techniques needed to manage cash flow and the impact of cash flow on key business decisions.

The success of the business often depends on how healthy its cash flow is and how well it is managed. For a new business this is very important as in the starting the company will have lower level of working capital. Following are some techniques needed to manage cash flow.

  • Keeping the track of status of cash flow in order to be able to manage it. It involves to have knowledge of every area of business where money is needed.
  • Monitoring any inefficiencies which hampering your cash flow immediately, as even small one can make a huge losses.
  • Increasing cash flow doesn't means to cut down the operational cost, investing in the business by hiring people and purchasing resources is important to increase productivity of the business (Laudon and Traver, 2013).
  • Making payments on time is an important cash flow technique.

Cash flow in the business is estimated by preparing cash flow statements. It is a financial report which shows the cash inflow and outflow at a given time. Cash flow statement is important indicator for decision making as it show's firm's liquidity. It has a huge impact on the company's decision making, as it deliver the key information that helps in making financial decisions like making short term budget. Positive cash flow helps the manager to fix the daily budget of the company and the proper use of working capital.

4.5 evaluate – using illustrative examples – methods for making capital/investment decisions and criteria that may be used in the evaluation

The methods which are used to evaluate capital budgeting decisions are:

  • payback period: it is the calculation of time period to get the original investment back. This method is very easy to calculated. Payback method doesn't consider the time value of money.
  • Net Present Value: NPV approach does consider the time value of money for as long as the projects generate cash flow. The net present value method uses the investor's required rate of return to calculate the present value of future cash flow from the project (Cucchiella and Rosa, 2015). The net present value method considers the differences in the timing of future cash flows over the years
  • Internal rate of return: this method is simpler variation of the net present value method. It uses a discount rate that makes the present value of future cash flow equals to zero. A project that has the highest internal rate of return may not have the best net present value of future cash flows

4.6 Explain the benefits and drawbacks of off-balance sheet financing.

Off-balance sheet is the term for asset and liability that do not appear in company's balance sheet, but still considered as the assets and liability of the company. The items in off-balance sheet are those which is not owned by or are directly obligation of the company. The off-balance sheet financing includes operating leases and partnership. By using operating lease, the company is recording only the rental expenses, resulting in clear balance sheet.

The advantage of off-balance sheet are:

  • As the item is neither an asset nor a liability, a business doesn't want to include it on balance sheet. Because off-balance sheet item is not a liability it gives little risk to the company.
  • With off-balance sheet financing, the business obtains the funds or item it needs without affecting its debt burden. Off balance sheet financing gives the business the ability to use its remaining allowable borrowing capacity for other purposes.

Disadvantage of off-balance sheet are:

  • The balance sheet records the value of long term assets at the price paid for them known as historic or book value. A disadvantage of off-balance sheet is that it ignores the current value of these assets, it also ignores the value or the money it would take to replace an asset at current prices (Nash, 2018).
  • Only assets acquired by transactions are reported on the balance sheet. Therefore, it does not includes some very valuable assets that can be expressed in monetary terms.


5.1 Financial implication made by various business ownership structure

Importance of effective financial control in all the business activities on which the structure of business will be helpful in bringing the qualitative outcomes which in turn will be effective and adequate in analysing the requirements. There various common ways and variation sin the structure of the business such as:

Sole proprietorship: These are the businesses which are self-governed and operated by a single owner one which the utilisation of funds is mainly relevant with purchase of inventories and other overheads (Types of Ownership Structures, 2018).

Partnership: Considering the nature of this business where governance based on influences of more than 2 partners. Thus, the requirements of funds in making payments to the staff, operating expenses of business etc.

Corporation: These are the organization which seeks for the appropriate amount of revenue which will help them in rising the market share as well as making payments to the shareholders and meeting operating expenses.

5.2 Analysing the corporate governance, legal and regulatory environment

Demonstrating the corporate governance in relation with the various structure and nature of businesses. Thus, it can be said that in sole proprietorship the governance of funds will be based on making appropriate decisions (Veatch, 2017). However, in relation with partnership firms these are the decisions which has been made by professionals on their mutual understanding as per analyzing their requirements and managements of each operations. However, in relation with this it can be said that there are various issues which will be addressed as per having improvements in various business operations.

5.3 Interest of stakeholders and managers in decision making

The decisions made by stakeholders and managers are mainly based on financial discloser made by the company. Investors mainly seeks for the financial disclosure which consist of information relevant with turnover and the dividend policies of the organization. Similarly, internal managers seek for the information relevant with operating expenses and the valuation of firm on which they make decisions to overcome with expenses as well as plans for promotional activities.

5.4 Evaluating the significant return on capital employed as well as managing long term solvency

Analyzing the return on capital employed which will be helpful in managing the long terms solvency of the firm (Karl, 2018). Thus, the equity has been collected by the firm in the years will be measured as per analyzing the profitability which consist of information that the revenue of firm will be risen and have the most appropriate outcomes in return.

5.5 Importance of EPS in measuring business performance

Analyzing the Earning per share will bring the information that the how much a company is retaining on its generated capital (BucherKoenen and, 2017). Thus, it will be helpful tool in bringing the information relevant with the market value of firm.


On the basis of above report it can be said that there are various obstacles and changes in the operations which will help in meeting the targeted aims of organization. Analysing the impacts of various financial tools which are needed to be considered by the professionals of entity that will be appropriate in improving the efficiency, profitability, liquidity and solvency.


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