Wednesday, October 16, 2019

Understand the implications of finance as a resource within a business Assignment

Understand the implications of finance as a resource within a business - Assignment Example The estimation of cash requirements of a company and the various decisions related to the ways of generating cash is also sometimes referred to as the financial plan. Financial planning is thus important and helpful in determining the ways through which the companies can generate cash to make the various investment decisions possible for them. Cash budgeting, which is a part of financial planning, helps assess the ways in which available cash should be utilized y the company to achieve its financial objectives. Failure to arrange for adequate finance could lead to problems for the company, and it will not be able to carry on its business activities because of limited funds required for the purpose of implementing its various investment objectives. All these facts suggest that financial plan is critical to any business organization for its future growth and sustainability. Financial information of a company is generally presented through the financial statements prepared by its accountants. The users of financial information of an organisation can either be its external users or the internal users. The internal users or the users within the organisation are mainly the management accountants of the company, who use the financial information present in the financial statements of the company to make various business decisions (Sinha, 2009, p. 21). The managers of the company are also the internal users who are engaged in the activities related to planning and controlling the daily business operations of the organisation (Nikolai, Bazley and Jones, 2009, p. 7). The financial information is utilised by them to make decisions regarding internal operations to be conducted within the organisation. For example, the managers decide on the purchase of new equipment based on the financial information provided to them by the management accountants through the fin ancial

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