Finance

3830 Words Jun 14th, 2014 16 Pages
EBMA Level 8 Diploma in strategic Business Research and Leadership Direction
Unit Title: Strategic Financial Analysis and Planning

Table of Contents

Executive Summary 3

1.Critique and evaluate research ....... 4

2.Critically apply modern financial tools 6

3.Use main types of investment appraisal tools 8

4.Critically evaluate the importance of research 10

References 11

Executive Summary

The decision making of management is very crucial and involves various analysis to be performed. There are various ratios and methods that can be useful for mitigating the risks and increasing the expected returns with investments. The financial forecast is a mix of the behaviour,
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Whether the transactions’ expected returns are as per fair terms of contract. (Andrei, 2000)
The good financial contracts must have the benefits as below:
The decision making consideration, including whether to enter a related party transaction.
To make informed decisions about whether to obtain securities or manage speculation goods. The contracts should hold financial benefits of transactions.
Directors’ recommendations
Directors’ curiosity in the result of transaction (if any)
An assessment of the financial benefit
The related party’s active concern (if any)
Dilution effect of the transaction on active members’ welfare (if applicable), and
Any other realistically mandatory information.
The contract should also cover the information that needs to be included in the disclosures, about related party transactions.

1.4 Critically analyse modern portfolio theory and option price theory for financial decision making

Harry Markowitz 1991, developed a theory of “Portfolio choice”, that allows the investors to examine the risk as per the expected returns. In modern World, this theory is known as Modern portfolio theory (MPT). It attempts to attain the best portfolio expected return for a predefined portfolio risk, or to minimise the risk for the predefined expected returns, by a careful choice of assets. Though it’s a widely used theory, still has been challenged widely. The critics question the feasibility of theory as a strategy for

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