BSc (Hons) Business Management with
Foundation
BMP3005
Applied Business Finance
The concept and importance of financial
management and the processes
businesses might use to improve their
financial performance
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Contents
Introduction
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Section 1: Definition and discussion of the concept and importance of
financial management
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Section 2: Description and discussion of the main financial statements and
explain the use of ratios in financial management
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Section 3: Using the template provided
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i. Completing the Information on the ‘Business Review Template (Ensure that
you display your calculations for this detail)
p
ii. Using Excel producing an Income Statement for the Sample Organisation
(see Case Study). This should be included within your appendices
p
iii. Using Excel completing the Balance Sheet
p
iv. Using the Case study information describing the profitability, liquidity and
efficiency of the company based on the results of ratio analysis
p
Section 4: Using examples from the case study describing and discussing the
processes this business might use to improve their financial performance
p
Conclusion
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References
Appendix
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1
Introduction
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Section 1: Definition and discussion of the concept and importance
of financial management
Finance is still the application of science of money management. Finance applies economics
and accounting principles to numerous difficulties in the company, according to Musa
Essayyad (2013).
Following Musa Essayyad (2013), the second of these two primary categories are financial
management. A finance manager oversees the personal finances of any form of firm, whether
it is financial or non - financial, publicly or privately, for profit or not for profit.
Use these objectives:
o Keeping a sufficient number of finances on hand for the organisation;
o Guaranteeing that the organization's owners receive a satisfactory return on their
investment;
o Optimal and effective use of finances;
o Creating genuine and secure investment possibilities.
A financial manager oversees the financial management section of any company. This
department is responsible for a wide range of tasks, including:

Calculating the quantity of capital required - the financial management must determine
the amount of funds that an organisation requires.

Development of capital structure - after estimating the amount of capital required by
the company, a capital structure must be constructed.

Investment capital - in order to obtain additional capital and earn consistent returns,
every company or corporation must invest money.

Profit allocation - that once company has made a good amount of net profit, it is the
finance manager's responsibility to efficiently distribute it.

Efficient financial management - this department is also in charge of managing the
firm's money.

Financial control - in addition to planning, organising, and obtaining funds, the financial
management must also track and review the firm's accounts in the medium and long term.
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This management style is important for a variety of reasons. Consider some of the following
reasons:
o Facilitates organisations in their budget analysis;
o Assists companies in their funding strategy and acquisition;
o Supports organisations in making informed business decisions;
o Increases the total worth of the companies or organisations.
Section 2: Description and discussion of the main financial
statements and explain the use of ratios in financial management
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Section 3: Description and discussion of the main financial
statements and explain the use of ratios in financial management
Section 3: Using the template provided:
v. Completing the Information on the ‘Business Review Template (Ensure that
you display your calculations for this detail)
Start writing here
vi. Using Excel producing an Income Statement for the Sample Organisation
(see Case Study)
This is included within appendix
vii.
Using Excel completing the Balance Sheet
Start writing here
viii. Using the Case study information describing the profitability, liquidity
and efficiency of the company based on the results of ratio analysis
Start writing here
Section 4: Using examples from the case study describing and
discussing the processes this business might use to improve their
financial performance.
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Conclusion
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References
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Appendix:
Income Statement
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