Financial Managements Role in Business

Financial Managements Role in Business

I have encountered the use of financial statements in different life activities. One encounter that was so important was the assessment of the financial performance of a company that operates in the local market in the transportation services. Notably, I realized that assessing financial statements requires knowledge of different financial management. The specific knowledge that I utilized was financial ratio analysis. Financial ratios offer different metrics that assess the financial performance of a company regarding liquidity, profitability, efficiency, turnover, and market valuation (Brigham, 2016). Essentially, all these metrics rely on information drawn from financial statements. After analyzing the financial performance based on these metrics, I was able to decide whether to purchase the stock of the company or not.

While thinking of finance, different concepts come to my mind. They include capital budgeting, financial analysis, cost of capital, and the time value of money. Accordingly, these terms and concepts come to my mind once finance is mentioned because I found them interesting during the course. For instance, the concept of the time value of money interests me on how it is applied to other major concepts in the course. For instance, the concept is applied in capital budgeting, whereby certain capital budgeting techniques rely on the concept to derive meaning. The famous net present value technique is one central technique discussed in the course. It is applied in evaluating different projects to select one upon which funds should be invested. The method greatly relies on the concept of the time value of money. As advice to an individual undertaking a financial management course, I would encourage them to focus on the lecture materials and undertake further personal studies. I believe that doing so and adding effort will make the course easier.

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References

Brigham, E. F. (2016). Financial management: Theory and practice. Cengage Learning Canada Inc.

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It’s important to note how financial data and calculations are used to support an organization’s work, finances, and decision-making.
In this discussion reflect on finance, your experience, and this course.

Financial Management Role in Business

For your initial post, address the following:
• Have you ever used financial documents (such as tax returns and financial statements) to make a personal or business decision? Explain.
• What terms or concepts come to mind when you think about finance?
• What concerns or excites you about the course?
• What advice, resources, or encouragement would you offer to your peers to help them succeed in the course? Be mindful and respectful, particularly if you are responding to someone who is concerned about the course.