Finance

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Financial decision making Contents Introduction: 1 Task: 1 1 (a) Ratio analysis on the basis of AstraZeneca Annual Report and Form 20-F Information 2012: 1 (b) Business structure and financial structure (comparison and relative advantages of the chosen organization) 5 (c) Compare and comment on the finances of business: 7 (d)Recommend potential investor for the investment decision: 8 (e)All possible Sources of finance for 500000 and best source 8 (f) Management of working capital: 10 Task 2: 11 (a)Preparations of a cash flow forecast and comment on budget and cash flow: 11 (b)Recommendation for managing cash flow: 12 Task 3: 12 (a)Assessment of projects by financial techniques: 12 (b) Recommendation from the above…show more content…
Here the position of 2011 is more efficient than in 2011. Working capital turnover: This ratio indicates company’s ability to generate revenue with the working capital. The difference between the current asset and the current liability can be termed as the working capital. Formula: Revenue / average working capital Calculations: 2012 = 27973 / {(19048 – 13903) + (23506 - 15752)} / 2 = 4.340 2011 = 33591 / {(23506 - 15752) + (25131 - 16787)} / 2 = 4.170 Interpretations: the position of the working capital ratio in 2012 is better than in 2011. Receivable turnover: receivable turnover represents the efficiency of collecting payment from the account receivables or the debtors. Formula: Revenue / average account receivables Calculations: 2012 = 27973 / (7629 + 8754) / 2 = 3.410 times 2011 = 33591 / (8754 + 7847) / 2 = 4.050 times Interpretations: the rate of collection from the customers in 2011 is higher than in2012. So, the efficiency in respect of the collection decreases in the recent year. Solvency ratios: Company’s ability to pay long term obligations can be termed as solvency. This ratio indicates company’s efficiency to pay long term debt and obligations. The most commonly used ratios for the solvency are: 1. Debt to asset ratio 2. Debt to equity ratio 3. Financial leverage Debt to asset ratio: the percentage of total asset that is financed by

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