Financial Information Decisions

Question: How does financial information affect decisions made by managers with the success or failure of their companies? Answer: Financial information is necessary in each and every company as it gives an overview of the current trends and comparison becomes easy due to that. Decisions are based upon the financial information and that makes the work of the managers easier to predict the future action. The financial information is basically present in different form that helps in the flow of operations within an organization (Brown, Beekes and Verhoeven, 2011). In any organization, it is important to understand the cash flows, segregation of various incomes as well as expenses, capital structure, and most importantly nature of various assets as well as liabilities. Decision making process becomes easy with the help of financial information. Managers can take decisions by viewing at the income statement that helps them to analyze what expenses are on higher or lower side. Weakness of specified organization can also be analyzed by the managers and they can take necessary actions to minimize in the variations that will affect the financial performance. Capital structure will make the managers take decisions on the various cost of capital associated to the organization (Anandarajan, Anandarajan and Srinivasan, 2012). The decisions taken by the managers should be focused in order to gain success in the long course of time. Financial ratios help the managers to predict the future activities in terms of liquidity as well as profitability of the business concern. There are number of challenges that are faced by the managers because they predict the future in terms of financial information. Collection of data as well as preparation of financial statements gives an overview of the financial position of a business enterprise. If the information given is not correct and fails to depict the real picture of the business, then managers will face a lot of challenge to come up with solutions that will help in the success of an organization. If the financial data indulge in false manipulation, then the managers will find it difficult in taking corrective decisions because those manipulative data will directly hamper the growth of the company to a great extent (Brief and Peasnell, 2013). Nexus is one of the successful companies in United States whose turnover is over 32.9 Euros. They have been in the transport sector and is doing successfully well with high professional working under the company. One of the recent claims of this company is that they hav e supplied two tipper trucks that showed in the BBC series. Their main aim is to run the business and achieve the goals in the year 2008 to gain the global recognition. This company aims at producing trucks both as short term as well as on rental basis. One of the failure companies in the year 2015 was HMV that is based in United States. This company has lost millions of dollars on the basis of staff, suppliers as well as landlords. There was a problem in the administration department that was noticed by the CEO of the company (Byrne et al. 2012). The main reason for the failure was lack of checks of balances that produced loss for the company on an overall basis. Reference List Anandarajan, M., Anandarajan, A., and Srinivasan, C. A. (Eds.). (2012).Business intelligence techniques: a perspective from accounting and finance. Springer Science Business Media. Brief, R. P., and Peasnell, K. V. (2013).Clean surplus: A link between accounting and finance. Routledge. Brown, P., Beekes, W., and Verhoeven, P. (2011). Corporate governance, accounting and finance: A review.Accounting finance,51(1), 96-172. Byrne, M., Chughtai, A. A., Flood, B., and Willis, P. (2012). Job satisfaction among accounting and finance academics: empirical evidence from Irish higher education institutions.Journal of Higher Education Policy and Management,34(2), 153-167.