Financial managers play an important role in any organization. They are responsible for an organization’s financial resources. They are guardians of these funds and have a responsibility to invest these funds in a way that yields the highest possible return and at the same time providing liquidity to an organization. …
Good financial decision making can make or break an organization. Hence, the role of a financial manager is vital to any firm and they are the heart of an organization. Market prices are great indicators for a financial manager. They are usually signals that help the financial managers in planning and controlling, mergers and acquisitions, deciding on financial policy and a lot of other things. A good financial manager does not make decisions based on intuition. Instead, a good decision is only made after a careful examination of the markets and a lot of other external influences. Market prices are one of the external influences that have to be dealt with. Market prices guide the financial managers to set their financial policies and where to invest their funds. If a price of a commodity or an investment is rising, it is better that the financial manager move his funds or resources to that investment and make capital gains by selling those investments when the market has peaked or the investment prices start falling. Similarly, market prices are also very useful in mergers and acquisitions....
This principle guides the financial managers to determine the accurate price of these investments and hence preventing them to pay in excess of the fair price of an investment. This helps in keeping the profitability of a business high. This is important because most of the business investment is made in portfolio and if one of these investments is made in a venture that is not profitable or less profitable than the previous investments, then the entire portfolio’s profitability would decrease. Therefore, valuation principle is very important to an organization and financial managers. Net present value is calculated by discounting the future net cash flows and then subtracting the investment price of an equipment, plant or machinery. The positive result indicates that the investment is worth undertaking and negative result indicates that the investment in hand is inferior and should not be undertaken. This is similar to cost benefit analysis. Cost benefit analysis calculate the costs and benefits of an action. It states that only those actions should be undertaken that give more benefits than costs. In the very same way, Net Present value approach suggests that only those investments should be undertaken that give positive result. Positive result indicates that future net cash inflow’s present value is greater than the investment price and hence the investment yields good results. This is an important tool to evaluate and assess the profitability of an investment and helps the financial managers into making shrewd investment decisions. Interest rate is the cost of borrowing money. It is what an investor pays over and above the borrowed amount. Interest rate is the price at which the ...
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(Financial Concepts and Their Applications Essay Example | Topics and Well Written Essays - 750 Words)
“Financial Concepts and Their Applications Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.net/finance-accounting/40202-homework-assignment.
The mathematical analysis of such information can provide valuable guidance for future organizational decisions. However, all forms of data collection include the issue of sampling error. The sampling error problem occurs as a result of the ability to sample every member of a given population.
Therefore, the manager may evaluate the relative weaknesses and strengths of his or her business. This comparison of business ratios to those of other similar businesses will indicate the weaknesses or strengths within a business (Albrecht, 2011).
Fundamentally, we may differentiate these principles according to three arguments on the existence of financial intermediaries:
A. The argument on informational asymmetries - Market imperfections are generated because of the informational asymmetries like divergence from the neoclassical structure of financial system.
On the other hand, the non-current assets of WMT include fixed assets like property, plant and equipment acquired by the company for intended operations. In this section, the corresponding accumulated depreciation or depletion is deducted from the property, plant and equipment to account for the wear-and-tear of these fixed assets.
Advise to Dr. Leo Krusack on basic accounting procedures for the month of July showing how each transaction is handled on the accrual basis of accounting: - On July 1st, he paid out $1,200 in office rent for the month of July.
The author explains that Self Imposed Budget is known as a participative budget; it is a budget that is made with full participation and input from managers at all levels, thus naming it as participative. Input and participation of managers is an essentiality to proceed with success. The advantages is that the more concerned managers are involved.
Based on this model, systematic risk called beta is defined as the contribution of the variance of a well diversified market portfolio (Harvey, 2001). According to CAPM, for investing in a risky asset, an investor needs extra
Good financial decision making can make or break an organization. Hence, the role of a financial manager is vital to any firm and they are the heart of an organization.
Market prices are great indicators for a financial manager. They are
The same applies to creditors, shareholders, creditors, employees, managers, the government and society who are interested in knowing the financial health of a company to be able to make informed decisions. The information that external users are interested in are usually
According to the report the suspect’s DNA is matched with the sample DNA collected from the crime scene to assess the levels of matching, so that is the match is 100%, the DNA samples collected the crime scene can be used as evidence against the suspect. Forensic scientist also uses DNA when solving paternity disputes.
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