Financial Management For Global Decision-Makers Assignment Sample  

Financial Management For Global Decision-Makers Assignment Sample

1.0 Introduction

The construction industry is one of the largest industries in the world. The business of construction industries is growing. The competition of construction industries is also growing. A sufficient amount of money is required to complete the construction work. A huge amount of money is required for a huge construction project. Therefore the size of construction determines the required money for construction. “Smith construction LTD” is a private construction company. This company was developed by a sister and brother. This company was developed in 2017. The financial condition of this company is not so good. To complete huge construction projects sufficient money is required. The financial condition of this company is to be developed properly. Without sufficient money, huge construction projects cannot be completed. The sources for financial support are to be identified. It can help to increase the construction business of this company.

2.0 Discussion and analysis

2.1 Analysis of the accounts

Ratio analysis helps to describe the financial condition of a company. The operational efficiency, liquidity, profitability can be easily known with the help of ration analysis. The current situation of the financial condition can be easily known with the help of ratio analysis. Comparative data can help to describe the performance of a company. The balance sheet and income statement can be known by ratio analysis. Ratio analysis also helps to compare the financial condition of two same industries. The financial health of a company can be obtained by ratio analysis. In the construction sector, ratio analysis plays an important role. The financial condition of construction industries can be easily known by this method. Comparison is done between two construction industries by this method. The current and past financial statements are analyzed by ratio analysis. Estimation of future performance means the progression can be known. Ratios are an important part of a company. With the help of a ratio, a comparison can be done. There are various types of ratio analysis. These are liquidity ratios, solvency ratios, profitability ratios, efficiency ratios, coverage ratios, “market prospect ratios”. Liquidity ratios help to understand the ability of any company to clear the due amount. It is done by the quick or current assent of the company. “Working capital ratio”, quick ratio, current ratio are included in liquidity ratios. Solvency ratios help to compare the debts levels of a company with the earnings, equity and assets. Long term debts are paid by this ratio. Profitability ratios help to understand how much profit is done by the company by the operations. There are different examples of profitability ratios. These are “profit margin, return of equity, return on assets, return on capital “etc. Efficiency ratio means how the construction company uses its liabilities and assets efficiently to get maximum profit. It also helps to increase sales of construction industries. The business of construction is riskier compared to any other business. Financial management helps to maintain the financial condition of a company. In the construction sector, there is also financial management. In this management assets and cash are used. Every decision regarding construction affects the financial future of the construction industry. In this report, the financial condition of Smith construction LTD is evaluated. The bidding process impacts the financial condition of smith construction LTD. Hence to bid on any kind of construction project the manager should estimate the financial condition of the company. Wheatear the company can perform the operations or not should be also examined. Whether the company has enough cash or not, also is examined. If not what are structure should be developed to improve the financial condition are should be discussed properly. This can help to grow the financial condition of Smith construction LTD.

2.2 Discussion of misappropriation and identification of weak areas of internal control

The business of the world is increasing rapidly. There are various types of companies that use different methods to develop the business of the company. The construction sector is one of them. Construction sectors are not similar to other companies. Every decision affects the operation and financial condition of this kind of company. Therefore the operation of the company affects the future growth of the company. Various kinds of challenges are to be faced in the construction sector. The challenges which are faced by construction companies are not similar to other companies. Construction companies are responsible to construct huge buildings, roads, other structures. The manager is responsible for financial management. All the tasks of financial management are related to construction works. For the development of the construction business, the managers should give proper training to their workers. The construction knowledge can be increased via training sessions. Therefore the growth of the business can happen. Therefore the financial conditions of Smith construction LTD can be improved. Internal controls of a company mean the used system by the company to manage the risks. The “internal control structure” can be made with the accounting system, control environment and procedures. Different aspects are needed to manage the risk of construction companies. The procedures and formal policies that are in the “internal control system” are given below-

  1. It should be seen that all the assets of construction companies are used properly.
  2. It should be seen that the “accounting system” works properly.
  3. The operation of construction industries should be properly done to increase efficiency.
  4. Security of the assets is also needed. Therefore all the assets regarding construction should be kept properly.
  5. It is seen that all the employees of construction industries should follow all the policies.

These all internal matters should be properly addressed. A proper design and function of an “internal control system” helps to eliminate the risk of business in construction industries like “smith construction LTD”. The risks in companies are not similar. Therefore the risk in the construction sector is not similar to any other sector. Misuse of the assets in construction sectors will lead to a loss in business. The assets of the construction company can be secured with the help of internal control. The financial condition of “smith construction LTD” can be developed with the help of above mention activities. The proper records of accounting help to establish financial statements. From the financial statements, the managers and directors of the construction sector can manage all the operations in the construction sector. The accounting records help to increase the business of ‘SMITH CONSTRUCTION LTD”. Through the financial statement, the managers of construction industries get to know the future condition. If the activities of the employees in the construction sector are managed properly then the profit can be increased. Every construction sector has specific policies. The policies of the construction sector should be properly followed. The assets that are needed for construction work like materials should be kept securely. In this way, the financial condition can be improved. The financial condition is a very important topic for business. If the financial condition of a construction company is weak then a proper framework is to be established. The proper design and function of an “internal control system” can manage all the works in a company. Thus the benefit and profit can be increased.

2.3 Sources of finance

 Globally the business in the construction sector is increasing. Competition between different construction companies is also increasing. In this competitive market, sustainable development is needed. For this appropriate approaches and strategies are essential. Without approaches and strategies, the condition of finance cannot be improved. To grow the business of construction industries investment is needed. Without investment, the growth of a business cannot be achieved. Therefore financing is an important topic in the construction sector. In the construction sector, heavy materials are used. To construct huge buildings, bridges and roads sufficient amount of materials are needed. From crew wages to heavy equipment, financing is needed for the construction sector. For the “smith construction LTD” a huge amount of investment is needed. Therefore the sources of finance should be identified. This company wants to complete huge construction projects. To complete the operation of construction projects a huge amount of investment is needed. 250000 investments are needed for “smith construction LTD”. Therefore the sources of finance should be identified.

Financial Management For Global Decision-Makers Assignment Sample  

Figure 1: Sources of investment of “smith construction LTD”

(Source: Self-created in MS-word)

There are several ways to get financial investment for this company. These are commercial banks, loan and savings associations, government agencies, “life insurance companies”, “mutual saving banks” etc. These are the most common sources from where the company can get financial investment to grow the business. For “major construction projects” commercial banks are needed for loans. The manager of “Smith construction LTD” can approach any commercial bank for investment. The cost of huge construction projects is very high. Therefore investment is needed. On the other hand another source for investment to “smith construction LTD” is “life insurance” companies. From these companies, loans can be got. The companies of life insurance can give loans for huge construction projects. These companies can give loans for huge commercial, retail, office and apartment construction. “Mutual savings bank” is another source of financial support for this company. On the other hand, various types of programs of government can also help the construction projects. These governmental programs are very much essential for the completion of construction projects. Therefore from governmental agencies, the “smith construction LTD” can get financial support. Financing is important for “smith construction LTD”. These are the sources that can help the company to increase the business.

3.0 Conclusion

 In this report, the financial condition of this company has been evaluated. The financial condition of this company is not so good. Therefore for the construction of a huge project, enough money is required. The sources of investment are identified in this report. The general manager in the construction sector is responsible for the benefit of the company. To grow the business he should give various types of training sessions to the employees. Thus the knowledge of construction can be increased. Financial management helps to understand the financial condition of a company. In this company, financial management should be properly developed. Thus the business of the company can be increased. Various types of procedures and methods are needed for an “internal control system”. Therefore every work in internal control should be performed properly. The employees of “smith construction LTD” should follow all the regulations and rules properly. To increase the business it is very much essential. The assets of construction should be kept properly. These steps should be followed properly. These steps are very6 much important for the growth of the company. Finally, the sources of financial support are identified in this report. The manager of “smith construction LTD” can get financial loans from different types of governmental agencies, “mutual savings banks”, commercial banks. These are described in the above section properly. In this way, the “smith construction industry” can grow its business properly.

Reference list

Journals

Abdullahi, A.H., Oyewobi, L.O., Ganiyu, B.O. and Shittu, A.A., 2021. E-Procurement Implementation in the Public Construction Sector in Nigeria: A Review.

Aldhamad, S.H. and Rezouki, S.E., 2020. Financing Cost Optimization in Construction Sector: A Review. Journal of Engineering26(10), pp.94-108.

Babatunde, S.O., Awodele, O.A. and Adeniyi, O., 2018. Opportunities and challenges of foreign direct investment utilisation and its impact on construction sector in developing countries. Journal of Financial Management of Property and Construction.

Balina, R., Idasz-Balina, M. and Achsani, N.A., 2021. Predicting Insolvency of the Construction Companies in the Creditworthiness Assessment Process—Empirical Evidence from Poland. Journal of Risk and Financial Management14(10), p.453.

Bărbuţă-Mişu, N., 2018. Analysis of factors influencing managerial decision to use trade credit in construction sector. Economic research-Ekonomska istraživanja31(1), pp.1903-1922.

Dash, M., 2018. WORKING-CAPITAL MANAGEMENT AND PROFITABILITY OF THE CONSTRUCTION SECTOR IN BANGALORE. Journal of Commerce & Accounting Research7(4).

Fragouli, E. and Lazaridou, A., 2019, September. Leadership and Strategic Management Effectiveness during Crisis in the Construction Sector: A case study. In BAM2019 Conference (pp. 1-53). British Academy of Management.

Khokhlova, G.I., Yushina, J.A. and Burov, V.Y., 2020, June. Some aspects of risk management in the investment and construction sector. In IOP Conference Series: Materials Science and Engineering (Vol. 880, No. 1, p. 012109). IOP Publishing.

Kikwasi, G.J. and Escalante, C., 2020. The Construction Sector in Tanzania. Mining for Change.

Węglarz, A. and Gilewski, P.G., 2017. Application of expert systems in the construction sector. In MATEC Web of Conferences (Vol. 117, p. 00176). EDP Sciences.

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