FINANCIAL DECISION MAKING

Financial Decision Making

Financial Decision Making

Introduction

Managerial accounting, in a deeper sense that focused exclusively on the management company, looking to supply information that they fit validates and effective in the decision model administrator. Managerial accounting is characterized as a focus on providing information for managers, in this case, a tool for administration. It is a necessary tool within the accounting procedures in accounting financial, cost accounting, in financial analysis, etc in order to assist managers in decision making (McLaney, 2009, p.21). The current focus is centered on creating value by providing considerable information necessary to the success of organizations, generally accounting management relies on other fields of knowledge, including the concept of management production, organizational structure and financial management, the broader field of all business accounting.

Business accounting has helped the individuals in developing the plan and then analyzing then against the financial concepts in order to ascertain the feasibility of the decision which they are making. The investors primarily the use the concepts of opportunity costs, Investment curves, the concepts of present value of money which will be explained in depth in the paper below. The primary application of these concepts is that it helps investors and companies in making a strong business decision which can achieve the objectives of the business and investment. The business objectives and investor objectives will be explained in depth (McLaney, 2009, p.21). Business and investor objectives are the primary motives for which any investment decision is being taken. The investment decision is also evaluated on the basis of these business objectives that whether they are being satisfied fully, partially or not being satisfied at all.

Financial Tools

Analysis, financial planning and control

Based on coordinate activities and assess the financial condition of the company through financial reports prepared from accounting data results, analyze the capacity, make strategic decisions regarding the overall direction of the company, always seeking to leverage their operations, check not only the statement of income on an accrual basis, but the situation of cash flow to develop and implement measures and projects with a view to growth and adequate cash flows to obtain financial return as an opportunity to increase investments to achieve the business goals.

Making investment decisions

Is the decision of the application of funds in current assets (current assets) and non-current (long-term assets and permanent), the financial manager is studying the situation in search of desirable levels of assets, it is also the financial managers who determines which fixed assets must be purchased and when they should be replaced or settled, always seeking balance and optimum levels between current assets and non-current notes and decide when to invest, how and if it is worth purchasing a good or right. They always avoid waste and unnecessary spending or risk irreparable, and even the immobilization of current resources, with very high expenses property and that will bring some positive feedback and a lot of depreciation in its value, which prevent the operation of the working capital phenomenon for any ...