Financial management “is the operational and financing activity of a business that is responsible for obtaining and utilizing the funds necessary for effective operations. Thus, Financial Management is concerned with the effective funds management in the business process. Finance is interrelated functions which deals with marketing function, production function, Human Recourse function and Research & development activities of the business concern. Financial Management is concerned with the financing, acquisition and management of assets with some overall goal in minds. There are three major areas in Financial Management decision making.
This ratio is increased to 67.6% by 2015. Which are way higher than the industry average of 32.23% and sector average of 39.17%. This change is caused by the notes issuance and debts Costco entered. Firstly, Costco issued $3,500 million of Senior Notes in December 2012. Secondly, its Japanese Costco Subsidiary issued $102 million of promissory notes and got an approximately $102 three-year term loan.
There are 2 advantages of the target cost pricing: one is setting the expected costs as the pricing basis can enhance the competitive power of commodity prices; the other one is that the target cost formulation has good elasticity that can help enterprises explore their potential. And on the side of consumer, company can price the product more acceptable. That would help to popularize Lucozade(Red). Profit Margins Profit Margin is a percentage of profitability calculated as Net Profit (Net Profit = Revenue-Cost) divided by Revenue. People use it to measure how much the company actually earn out of sales.
Work within a multi-disciplinary team in a critical and lead role; identifying chances, predicting production and reserves, checking impact of change to production, cost or schedule, providing economic gain. Being able to influence team members through important tasks and be able to make and inform a personal team work. Provide production predictions and reserve tasks through application of appropriate logical and reservoir simulation techniques on assigned fields. Help coordinate multi disciplinary team, focus and deliver work in order to meet project targets. Provide economic observations to support, justify and optimize existing and future producing tasks and ensure recommended projects meet or pass corporate investment criteria.
He explained that ROE provide a quantitative measurement of management 's effectiveness at generating profits from a company 's net assets which lead to better trust on the company capability to generate profit and consequently higher demand on its share. Net profit margin is the percentage of revenue that business left with after paying all the expenses. The net profit margin is a clear evidence to the company performance ‘The higher the net profit margin ratio, the better is the profitability
The method is used for decision making and planning in the organization and used by the managers of the organizations. Organization uses this method to have accurate costing allocation in the production. It helps to have an accurate value of cost and profitability of each products and services. This methods help to convert indirect costs into direct costs which helps to achieve an accurate costs. The method helps to support decisions related to pricing, removing or adding items from the product protfolio and implementing evaluating processes for improvemnets in the organiation.
Fair value accounting (FVA) has pros and cons itself. It depends on how the fair value applied by the companies. Supporters of FVA argue that FVA can increase transparency for presenting financial statement to the third parties (Ian E. Scott, 2010). Increased transparency allows users to better understand financial performance and true picture of the company and gain additional insights in making decisions. According Zijl and Whittington (2006), fair values are useful for investors and increase transparency.
Roles of financial forecasting i. Business and investments are forward looking activities. Both the business manager and the investor look towards the future for financial achievements in the form of profits and cash flow. Therefore it is necessary for these business managers and investors to seek and review financial plans and financial forecasts to help them determine financial viability and revenue prospects of the companies they are assessing. ii.
Competitive advantage of a firm is the edge that it has over its competitors (Altharti 2012).It is important to state that competitive advantage (CA) cannot be achieved without a business strategy or business model. It is the business strategy, which is the management game plan for creating value for stakeholders and earning a reasonable return on investment that gives a company a competitive advantage over rivals in terms of higher financial performance on revenue, return on investment etc. The author accepts that Porter’s generic strategy and value chain are important tools in understanding the competitive strategies being deployed by rivals in any industry analysis. An understanding of the generic strategies such as the broad low cost provider, broad differentiation strategy, and narrow focus strategies on cost and differentiation being deployed by competitors can provide opportunities for existing and potential competitors by trying to achieve a lower cost or better differentiation by rivals. The value chain is an internal analysis of how an organization organizes