4192 Finance For Strategic Managers

Topics: Financial statements, Finance, Cash flow Pages: 26 (4161 words) Published: February 7, 2015

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Finance for Strategic Managers

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Number of words: 3000
Table of Contents
1Introduction1
2The role of financial information in business strategy2
2.1Need for financial information in business2
2.2Risks related to financial and business4
2.3Financial information required in strategic business decision making5 3Analyse financial statements for strategic decision making purposes6 3.1Purpose, structure and content of published accounts6

3.2Interpretation of financial information in published accounts9 3.3Financial ratios from published accounts11
4Assess and finance non-current assets, investments and working capital14 4.1Long and short-term finance requirements for businesses14 4.2Sources of long and short-term finance for businesses15 4.3Importance of managing cash flow and examine cash flow management techniques16 4.4Methods for appraising strategic capital or investment projects17 5Different ownership structures and the way they influence and measure financial performance18 5.1Corporate governance, legal and regulatory requirements of different business ownership structures18 5.2Accountability for and roles of owners and managers in decision making for different business ownership structures20 6Conclusion21

7References22
8Web References24

1 Introduction
In today’s market financial information of a company plays a major role compared to past and this is mainly because of the more volatile environment that companies have to work within. In assessing finance requirements and obtaining funds, reporting and setting up targets and mainly in managing risks this is really important. Also with that it is important to identify different risks related to the company and use them in the future business decision making. In analysing financial information it is really important to have properly structured accounts and the ability to calculate different ratios to support business decision making. Sainsbury's is the second largest chain of supermarket in the UK and in the market that they operate it is more important to get all these correct in the first place. A company must differentiate their long and short term finance requirements and find different sources as suitable for them and their financial structure. With that it’s also important to get a good understanding different ownership structures and their influential company’s financial performance. In this assignment while giving focus to these different topics they will be matching with Sainsbury’s activities.

2 The role of financial information in business strategy
2.1 Need for financial information in business
As per Linzer (2008), in the modern business era it is clearer that financial information plays a more vital role than the days we came pass by. With the dynamic or volatile economy in each country and with the increase rate of competitors coming into the market without more accurate financial information it would be really difficult for a company to carry on their business activities in their environment. For a company like Sainsbury's financial information will be more critical as they operate in a sector where there are many players as well there is a high risk in operating of losing out profit if they are unable to plan out the requirements properly. These financial information are important in assessing financial requirements where for Sainsbury's it will about funds required to obtain more market share, different sectors they haven’t looked into yet. In doing this financial information will also be helpful to decide in obtaining finance for those requirements as they prefer.

Figure 2.1‑1: Source: 2014 Annual report of Sainsbury’s
According to Scarlett (2009), these financial information is also important in giving a detailed report to the owners/shareholders and the other stakeholders...

References: Finance, J Sainsbury plc. (LON: SBRY) (Online), Available from: http://www.google.com/finance?cid=4062698 [accessed on: 02-09-2014]
Annual report, Sainsbury PLC (2013/2014), (Online), and Available from: http://www.j-sainsbury.co.uk/media/2064053/sainsbury_s_annual_report_and_accounts_13-14.pdf [accessed on: 02-09-2014]
Financial Statements, Sainsbury PLC (2013/2014), (Online), and Available from: http://annualreport2014.j-sainsbury.co.uk/financial-statements/ [accessed on: 02-09-2014]
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