Deca Flashcards
Nature and scope of Financial Information Management function
The goal of Financial Information Management is to ensure Businesses or Clients with accurate and timely data for effective planning, control and decision making. It refers to gathering data from sources like financial statements, organizing it to create useful reports and storing it securely in databases
‘Numbers that project Financial Status and condition, for example, Interpreting A Financial Statement may give a Company a promising a promising outline of their common procedures.’
role of ethics in Financial Information Management
Financial planners and Professionals Must establish boundaries that prevent Professional and Personal interests from appearing to conflict with interests of the employer and provide their Client with accurate, timely Information that will Guide the Client to Making Financial decisions
Use of Technology in Financial Information Management function
Technology is currently used to process Financial transactions and to efficiently visualize Reports and Trends such as operating and capital budgets, working capital reports, accounting reports, and cash flow forecasts. Financial information systems yield mass amounts of data that are generated in big businesses
Budgeting applications
Budgeting helps entities plan and control finances. Popular commercial software typically allows you to see your inflows and outflows of money, including tracking your expenses to specific payees.
Most budgeting software measures the impact of different actions on a budget.
‘Automated data transfer enables a business to access information from its enterprise resources planning software program for use in its budgeting software program.’
Financial analysis applications
Financial analysis is vital to evaluate a company’s performance, profitability and future prospects.
‘software applications are available to help you seek out more in depth awnsers to financial questions.’
They help develop Financial goals and set forecasts.
‘In Addition, you can create Professional Reports of the results of your detailed analysis. Using Financial analysis makes performing Advanced Financial analysis quicker, easier and more visually appealing than with Basic Spreadsheets.’
Techniques used to Analyse Customer Financial Information
Verticle and horizontal analysis
Trend anslysis
Ratio analysis
Techniques used to Analyse Customer Financial Information
Analyzing financial information helps companies in areas like credit decision making, marketing and personalized offerings. Verticle analysis is a method of organizing a financial statement such as an income statement that lists all items as a percentage of a certain base item like net sales. Horizontal analysis compares data across multiple periods, allowing stakeholders to assess the trend of financial performance, identify significant changes, and detect potential issues. Trend analysis is a continuation of a horizontal analysis that interprets data over time to find trends. A ratio analysis uses a ratio to assess a customers financial situation. For example The ratio of their debt to their income measure how much of their income they spend on paying off debts. The lower it is the more financially healthy they are. The current ratio is the ratio of assets and liabilities, and the quick ratio is the same but excludes inventory from assets. The two ratios measure how easily a company can pay off liabilities.
‘relates multiple financial statements and comparisons to budgets and industry benchmarks. Five common categories of ratio exist: liquidity, asset turnover, leverage, profitability and solvency’
Discuss nontraditional uses of financial information
Financial information can enhance business operations, sustainability and strategic goals. LEAN management improves efficiency by using financial information to streamline inefficiencies and areas with excessive costs.
‘benefits are lower costs, higher product quality and shorter lead times. Sustainability is depleting the least amount of resources possible, increased cost balanced out by decreased waste disposal costs.’
Activity based costing allocates cost to products based on activities require to produce them instead of the labour or materials. It uses financial data to analyze how different activities contribute to overall costs. Six sigma is developed in and for the manufacturing industry. It quantifies costs of poor quality or inefficiency and demonstrate savings from process improvements. Financial metrics are used to track improvements.
What do chartered Financial Analysts do
Help Investment companies navigate Financial markets
General ledger
A Record of every Financial transactions a Company has ever made
Symbolic and comparative reasoning
Processing data through a structured, rule based approach. Comparative reasoning is comparing things to draw conclusions.
Reasons for active listening
Builds Trust and strong relationships
Resolve conflict
Identify or anticipate problems
Ingredients to buying a home
Enough down payment
Good credit score
Steady income
Reduce your debt
You need at least this much of steady employment to buy a house
Two years
