Managing Financial Resources and Decisions
Introduction
Success of any company can be attributed to many factors. Financial management is one such vital factor. A company requires finance not just to start a business but also to operate a business, to expand its operations and to modernise it. Therefore it can be said for sure that “Finance is the life blood of business” (Donegan, p.53).
In nutshell the term financial management indicates “money management”. Financial managers spend a good section of their working hours in developing investment plans, analysing prevailing projects, balancing cash inflow & cash outflow and developing future financial strategy of the company. Managers believe that finance promotes a better understanding among departments and assist them to achieve corporate strategy (Shim & Siegel, 2008, p.5-7).
There are different tools through which the management analyses the efficiency of their financial management strategy. Few of the commonly used tools are ratio analysis, budget forecasting and analysing, net future cash flow though NPV. Management also uses certain specific tools to determine the profitability and the rate of return through tools like IRR, ROI and profitability index. Any problem existing in the financial policy followed by the company can lead to a major problem in future. Therefore the financial department should analyse the efficiency of these policies on a periodic basis and should update them to cope up with changing market scenario.
British Airways (BA)
British Airways is a full service providing global airline that offers low fare routes throughout the year. The airline has an extensive network almost all over the world and connects all the vital destinations. The huge fleet size, large number of international flights and dense networking makes British Airways the largest airline in UK. At present the company has it’s headquarter at London Gatwick Airport as well as London Heathrow Airport. The airline service provided by the company connects more
Success of any company can be attributed to many factors. Financial management is one such vital factor. A company requires finance not just to start a business but also to operate a business, to expand its operations and to modernise it. Therefore it can be said for sure that “Finance is the life blood of business” (Donegan, p.53).
In nutshell the term financial management indicates “money management”. Financial managers spend a good section of their working hours in developing investment plans, analysing prevailing projects, balancing cash inflow & cash outflow and developing future financial strategy of the company. Managers believe that finance promotes a better understanding among departments and assist them to achieve corporate strategy (Shim & Siegel, 2008, p.5-7).
There are different tools through which the management analyses the efficiency of their financial management strategy. Few of the commonly used tools are ratio analysis, budget forecasting and analysing, net future cash flow though NPV. Management also uses certain specific tools to determine the profitability and the rate of return through tools like IRR, ROI and profitability index. Any problem existing in the financial policy followed by the company can lead to a major problem in future. Therefore the financial department should analyse the efficiency of these policies on a periodic basis and should update them to cope up with changing market scenario.
British Airways (BA)
British Airways is a full service providing global airline that offers low fare routes throughout the year. The airline has an extensive network almost all over the world and connects all the vital destinations. The huge fleet size, large number of international flights and dense networking makes British Airways the largest airline in UK. At present the company has it’s headquarter at London Gatwick Airport as well as London Heathrow Airport. The airline service provided by the company connects more