Financial Information Within The NHS

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Question :

Unit 7.4   Finance for Strategic Managers 

Scenario

You are a longstanding manager in a family firm which is a small but growing organisation.  Your particular responsibility is finance. A new member of the family has just joined the firm fresh from completing a post graduate (level 7) qualification at college. He  is clear that in order to ensure the business’s continued success he must develop the financial skills required to assess and manage finance within the business.  He wishes to begin by understanding the role of financial information in business strategy and given your experience he has asked for your advice.

Heintends to create a file on finance for strategic managers which he can use as an aide memories. 

Activity 1

Prepare the first section of the file providing examples where appropriate.

This must have the following sub sections

  1. an assessment of why financial information is needed in business
  2. an identification of the business risks related to financial decisions
  3. a summary of the financial information needed to make strategic business decisions.

Assessment Criteria 1.1/1.2/1.3


Activity 2

The second section of the file must provide information on published financial statements.  You must include at least one actual example of published accounts in order to illustrate the points you are making. This section must include

  1. an explanation of the purpose, structure and content of published accounts. 
  2. your interpretation of the financial information in these accounts
  3. a calculation of the financial ratios from the accounts and an explanation of how they support strategic decision making 

Assessment Criteria 2/1.2/2.2/3


Activity 3

The new manager has made it clear that he needs to understand how businesses assess and finance various activities.  The next section of the file must therefore cover

  1. an explanation which clearly distinguishes between long and short-term financial requirements for businesses
  2. a table comparing the sources of long and short term finance for businesses
  3. an examination of cash flow management techniques and an assessment of why the management of cash flow is so important.

Assessment Criteria 3/1, 3/2, 3/3


Task 4

As the business is growing, the new manager wishes to have a section of the file which considers a number of issues related to expansion

In this section of the file you must

     1.   consider different business ownership structures and analyse the corporate governance, legal and regulatory requirements of these.  For each of these structures compare and contrast the roles and accountability of owners and managers in making decisions.

     2.   carry out an evaluation of methods for appraising strategic capital or investment projects.

Assessment Criteria 3/4, 4/1, 4/2


Guidelines for assessors 

The assessment criteria for the unit specify the standard a learner is expected to meet.  They demonstrate that the learning outcomes have been achieved.  The suggested evidence listed below is how learners can demonstrate that they have met the required standard.

Task numberACsSuggested evidence
11.1/1.2/1.3This section of the file must include an explanation and assessment of why financial information is required and where it is used in business. The learner must also clearly identify the business risks and how they are inter related with financial decisions. This task also requires the learner to provide a comprehensive summary of the financial information required for strategic decision making.

22.1/2.2/2.3.In this section of the file the learner must demonstrate their ability to analyse published financial statements and accounts. Using this data learners must:
  • clearly explain the structure and content of the accounts and why they are important. 
  • produce a thorough analysis of the financial information
  • calculate financial ratios and clearly show how they support strategic business decisions.

33.1, 3.2, 3.3The learner should explain the meaning of long and short term financial requirements and clearly show the difference between them.  The table must be comprehensive and show different financing methods appropriate to different types of assets.  There needs to be a range of techniques to manage cash flow and the learner must show their understanding of the critical nature of cash flow management.
 43.4, 4.1, 4.2In the final section the learner must demonstrate their understanding of different ownership structures and the implications of these. The learner should analyse a range of different ownership structures.  For each of these the learner must analyse the governance, legal and regulatory requirements. There then needs to be a clarification of the roles of owners and managers in each structure which also compares and contrasts these roles and their accountabilities.
There must be a balanced and thorough evaluation of the appraisal methods for strategic capital and investment projects.


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Answer :


Finance for Strategic Managers


Introduction

Looking at the competitive environment of current corporate market managers have various responsibility regarding carrying out the operations. In particular finance managers play crucial role because he/she have authority and responsibility regarding managing the inflow and outflow of funds within the company so that desired results and outcomes can be generated (Duffy, 2000). Herein, researcher has undertaken the case of healthcare organization, which requires proper management of money so that proper medical services can be given to the patients. Therefore, investigator focuses on evaluating the need of financial information within the NHS along with this, its financial position has been evaluated on the basis of ratio analysis. Further, variance between short and long term economic requirement of business is illustrated with the help of different cash flow management tools and their significances. Lastly, ownership structure of structure and accountability of managerial level people in making decisions has been understood and viability of project is computed through the capital budgeting techniques. 

Activity 1

1. Assessment of why financial information is needed in business

To carry out the operations of business, varied information is required and especially financial information so that managers can make smart and effective decisions. Following are the financial information required by the managers of NHS:

  • Raise finance: The main purpose of gathering information related to economic prospects is to evaluate the need of funds or money within the NHS. Further, it assist in analyzing the current position of NHS and if required managers can take potential measures accordingly (Guzman, 2015).Furthermore, through the means of assessing the information such as, firm's expenditures, revenues, operational performance, assets, liabilities and owner's equity, finance manager of NHS can make smart decisions of the raising the funds as well as the selecting the best suitable source. In a family firm like the case study organization selected it is required to identify the factors that are responsible to get financial information. On the other hand, it is required to raise finance, supportive investment decision and sending as well as meeting the targets. It is also essential to identify the risks involved with the business risk in family firm and do effective actions. 
  • Supportive investment decisions: having adequate and proper financial information leads to assist the managerial people to make smart and effective investment decisions. However, it is because, for investing the fund managers should identify the position of available funds which can be done only by assessing financial information. Herein, in-depth analysis of profitability statement assist the managers in making smart decision regarding use of reserves and surplus effectively. 
  • Setting and meeting targets: On the basis of current financial position, managers of NHS set the future targets of business and accordingly employ the strategies to accomplish the goals (Kaplan and Atkinson, 2015). Apart from monetary decision it is important for the managers to organize meetings at regular intervals to assess the human resources needs and wants which indeed are the integral part of NHS. 
  • Managing risks: NHS being of the biggest healthcare system in UK, needs to manage its risks and uncertainties in every department. Thus, managers requires proper financial information to manage all the risks associated with funding because without proper funds NHS will be unable to provide superior quality of medical services to its patients. In addition to it, to overcome technological failures and financial shortage as well as to meet needs of changing environment, managers requires proper information (Ryan, 2009). Furthermore, financial information assist managers in making use of available assists in effective and efficient manner so that better revenue and profitability can be generated. By the means of this risks associated with use of cash flows can be managed adequately as well as future investment decisions can be taken appropriately. 
  • Satisfying external and internal needs: In context to NHS, managers need such information because it helps in satisfying internal and external need of business i.e. employees, shareholders, suppliers, creditors, customers etc. Every stakeholder has its own interest within the functioning of NHS, thus, providing them adequate and accurate information will assist the course of stakeholders to make effective and smart decisions regarding future contingency. 

2. Business risks related to financial decisions

There are several risks and uncertainties associated with the NHS and it may directly hamper the decisions related financial position. Thus, managerial level people require adequate and accurate internal and external information to support their decisions so that hurdles and hindrance can be avoided or mitigated. 

  • Market risk: In decision making process, market risk is considered as the most because constantly changing environment of corporate world, companies facing various risks associated with it (Kevin and et. al, 2010). Further, NHS managers required to assess the conditions of market appropriately so that they minimize the effect of risk on services and operations. Herein, NHS management can take wrong decision regarding purchase of new medical equipment. It is because if the machinery is unable to satisfy the needs and wants of patients than it may possess high strategic risk for the NHS. 
  • Operational risk: It is considered as the most common risk in all because it is an influencing risk that hampers the financial decisions of NHS managers. It is linked to the internal process of the hospital functioning (Ryan, 2009). The operational risks should be evaluated bearing in mind that the convenient corrective steps are emphasized upon in order to negate the exposures of the company and guarantee required responses are achieved. 
  • Compliance risk: There are various law and regulations that NHS has to comply in terms of operating smoothly within the market. However, change in policies or regulations like trade policies, health and safety regulations, taxation policy etc. may impact on the financial decision of business (Schuster, 2007). By this means, the management of the company should ensure that the compliance procedures are properly represented and communicated throughout chains of management to prevent misinterpretations and confusion. 
  • Physical risk: This includes risks to the employees in the organization and the tangible assets. For instance, some common physical risks that can be pointed out are: Risk of fires; vandalism; theft, etc. The various ways the management of the NHS manages such risk factors are: taking out insurance; installing safety features in the likes of fire and smoke alarms, making the employees aware of the various kinds of threats surrounding them, etc.
  • Strategic risk: Strategies are designed to take an organization closer to its objectives. But the fact that it may adversely affect them cannot be denied. The decision itself might be a wrong one, or the execution of it could have been gone wrong. Low sale realization, neglected deadlines or unexpected inflows of cash, are examples of such risks.

3. Summary of the financial information needed to make strategic business decisions

Before making any strategic financial decisions, it is important for the managerial level people of NHS to gather appropriate information from the financial statements of the company so that they can justify their decisions. Following are the wide range of information that is required to make strategic business decisions:

  • Income and expenditure account: As the NHS is a not for profit organization, the financial standards require it to prepare an income and expenditure account. (Barrett, 2007). The revenue side of the said account will highlight the revenues received by the concern from sources such as subscription fees, donations, subsidies, etc., while the expenditure side will show the expenses in the likes of operating, administrative, fixed and variable expenses. This account prepared at the end of the financial year will provide the managers information required to plan and undertake growth prospects. 
  • Cash inflow and outflow: The cash flow statement of concerns like the NHS reflects the operating, financing and investment expenses and inflows. The management can then analytical decisions as to which activity they can provide more caution to and which activity requires significant improvement to improve the organization’s efficiency.  
  • Cash projections: Forecasting of cash or cash equivalents is based on the budgeting or other forecasting techniques. This is done to prepare cash budgets and make budgetary forecasts (Sofat and Hiro, 2011). Cash flow projections forecast on whether a firm needs to borrow funds, and the time of such borrowing and the methods of financing of such debts over a financial year.

ACTIVITY 2

1. Purpose, structure and content of published accounts

Company publishes its account to provide wide range of accurate and reliable information to different stakeholders:

  • Investors: Investors of NHS requires the information relating to profitability position, liquidity earnings of the company, solvency position and goodwill so that they can make decisions regarding future investments. In this, investors assess the ability of firm based on return on equity and return on investment so that reliability of future investment can be evaluated properly and according to this smart decisions can be made. 
  • Employees: The employees of the organization rely on the financial accounts on the fact that they need to know the financial status of the company they are employed in, so as to assess their growth opportunities in the organization and their current status in the market conditions.  (Kraemer-Eis and Lang, 2012) 
  • Suppliers: These people provide medical equipment’s to NHS thus, need to assess their liquidity position so that can make decisions on credit period as well as ability to meet short and long term financial obligations (Guzman, 2015).
  • Creditors: The creditors of NHS require access to the financial information to make decisions such as the grant of loans, rates of interest to be charged, duration of the loan that is to be granted, etc.
  • Customers: The customers of NHS need to know the financial position of the company in order to take decisions such as investment in the shares of the company, rates of dividend, etc.
  • Government: The government is the apex body that needs to have access to the financial information of the company. Tax payments, compliance to regulations, adherence to anti-fraud mechanisms are some reasons why the government needs such information. 


On the other hand, it is required to understand the structure as well as published accounts. Effective following of hierarchy in business would be helpful to understand the process of working and interpret financial data in the published accounts.


Structure of Financial Information and its contents:

  • Balance Sheet – It states the assets and liabilities of the company in a particular format. The difference between the assets and liabilities is the equity of the company. Therefore, Assets = Liabilities + Shareholder’s Equity. The figures of the contents of the balance sheet should always be equal. 
  • Cash Flow Statement – It reflects the cash inflows and outflows of the organization throughout the financial year in operating, financing and investing activities. 
  • Income Statement – Used for not for profit organizations, these statements reflect the profitability of the organization over a period. The figures in this statement may not always be in terms of cash, because the company may deal in extended payment terms. 





Formats of published accounts:

Revenue: 
             Gross Sales 
             Less : Sales Returns / Allowance  
             Net Sales 
Cost of Goods Sold:
             Purchases
             Delivery Charges  
             Cost of goods sold
            Gross sales profit (Loss)
Expenses:
             Expenses 1
             Expenses 2
             Expenses 3
             Total Expenses: 
             Net Operating Income 
Other Income:
            Income 1
            Income 2
            Income 3
            Total Other Income:
 Net Income (Loss):





 XXXX.XX 
 XXXX.XX 



 XXXX.XX 
 XXXX.XX 
 XXXX.XX 



 XXXX.XX 
 XXXX.XX 
 XXXX.XX 



 XXXX.XX 
 XXXX.XX 




 XXXX.XX 
 XXXX.XX 

 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 


Format of Balance Sheet:

Liabilities AmountAssets Amount 
Current Liabilities 
Creditors
Bills Payable 
Bank Overdraft 





Fixed Liabilities 
Bank Loan 
Secured Loan
Other long term Loan 





Capital and Net Profit 

 XXXX.XX 
 XXXX.XX 
 XXXX.XX 






 XXXX.XX 
 XXXX.XX 
 XXXX.XX 

Current Assets 
Cash in bank 
Accounts receivable 
Inventory 
Prepaid Expenses 
Other Current Assets 

Total Current Assets 

Fixed Assets
Machinery &Equipment’s
Furniture & Fixtures 
Leasehold Improvements 
Land & Buildings 
Other Fixed Assets (Less Accumulated depreciation)
Total Fixed Assets 

Other Assets 
Intangibles 
Deposits
Goodwill
Other 
Total assets 

 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 




 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 



 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 
 XXXX.XX 


2. Interpretation of the financial information in these accounts

The tools that the managers of NHS can utilise to get information from financial statements are:

Ratio Analysis: Ratio analysis is a financial tool that assists in evaluating profitability, solvency, liquidity and efficiency position of NHS so that if required potential measures can be employed in different areas and better results can be generated. Further, with the help of ratio analysis managers of NHS can compare the performance of business with past results, industry standards or competitor’s performance so that decision can be made on future contingency (Kevin and et. al, 2010). All these expenditures are recorded in balance sheet of NHS (Srinivasan, 2012). 

3. Ratio Calculation of a profit making company:

RatiosFormula2015
Profitability ratios
Gross profit
694
Net profit
2177
Net Sales
647573
Gross Profit Ratio(Gross Profit/ Net Sales) *1000.11%
Net Profit Ratio(Net Profit/ Net Sales) *1000.34%
Liquidity ratios
Current Assets
128451
Current Liabilities
89307
Closing Stock
8491
Current RatioCurrent Assets / current Liabilities1.4383083073
Quick Ratio(Cu. Assets - Cl. Stock)/Cu. Liabilities1.3432317735
Return on capital employed

Total assets
290711
Current liability
89307
Capital employed
215309
Net profit
2177
Return on capital employed:(Net Profit)/ (Capital employed)1.01%
Asset turnover or efficiency ratio
Sales revenue
647573
Total asset
290711
Asset turnover ratioSales revenue / Total assets2.2275490092


Interpretation:

The above computation shows that the management of the profit making company is inefficient in managing the funds in a way that would help the growth of the organization. GP and NP reflect the gross and net profits of the company based on its net sales respectively. Since the GP and NP of the company is 0.11%, and 0.34% respectively, it clearly indicates that despite being a NPO, the management is able to cover all its expenses from its operational performance. The Current and Quick ratios reflect the ability of the company to pay off its short term liabilities using its current assets. The liquidity position of NHS shows satisfactory results at 1.43 and 1.34, which indicate the capability of the firm in meeting its short-term financial obligations through its current assets. 

Activity 3

1. Long and short-term financial requirements for businesses

Financial need takes place in every kind of organization. They can be classified on the basis of time under two heads:

Short-term finance is essential to meet daily requirements of the business and this is useful for managing business liquidity. Every business has to incur several expenditures; therefore, it is necessary to have proper cash reserve ratio (Palepu and Healy, 2007). Short-term finance requirements need to be satisfied in order to meet the operating expenses of the business. The sources of raising short term funds are – operating activities, loan from banks, etc.  

Long term financing, on the other hand, are requirements of funds for longer time duration, say, 15-20 years. Long-term finance is essential for the purpose of purchasing land, machinery and in the areas where huge investment is required. Corporate bonds, equity funding, loans, retained earnings and selling of fixed assets are some of the sources through which financial arrangements are made (Hershey, Austin and Gutierrez, 2015). Long-term finance requirements need to be satisfied because it aids the company in supporting long-term initiatives such as construction of a production facility, making acquisitions, financing events such as the repurchasing of shares, etc. Acquisition of long-term funds helps a company in the end to meet its goals and objectives. 

Long term business might be essential for business organizations. This kind of financing includes multiyear reimbursement terms that can some of the time keep going for a considerable length of time. While transient advances may have higher loan fees at first, entrepreneurs who go up against long term financing ordinarily end up paying more in intrigue. This is on the grounds that the long term length enables enthusiasm to develop after some time. It is additionally commonly increasingly troublesome for an entrepreneur to get long term financing. This is on the grounds that they should adhere to progressively customary loaning procedures much of the time and battle with the strict passing models set up by bigger banks. At last, which sort of financing choice is best relies upon your particular business needs. For most entrepreneurs, a momentary advance will probably be progressively appropriate. Be that as it may, now and then long term financing might be essential. In any case, it's essential to work with a moneylender who comprehends the operations of independent companies and can tailor your advance to help your prosperity.

2. Sources of finance

There are various sources of funds available with NHS such as internal, external and other and from all such sources, NHS could manage all the necessary activities and operations. 

Short term finance sourcesLong term finance sources
Short-term finance sources are the one where in NHS can raise money with the help of personal capital and retained earnings. In order to deliver quality services to the patients, it is essential for NHS to have basic services and such services can only be delivered if NHS has the arrangement of short-term modes of financing (Nobes, 2014). 
Retained earnings: Under this NHS can make use of funds that are available with it. Through this, it can meet it short-term requirements for funds in an effective manner. It enables the company to raise funds from its own sources without external sources, but the amount of funds that can be raised is limited to the financial position of the company. 
Bank overdraft: It is regarded as the facility wherein the firm can withdraw greater amount in comparison with the balance that exists in the account of an individual. However, bank overdraft rates are usually very high and therefore, the companies tend to avoid it as a source of raising funds.   
Long-term finance sources are useful in the case where in large amount of investment is required for business processes. (Chand, 2015). These sources are useful for NHS for retaining its position in health care sector: 
Bank loan: Loan from banks are offered for a fixed duration of time and it is regarded as the most suitable financial source that assists in meeting the long-term need for funds. However, high bank rates and stringent policies for grant of loans are a disadvantage of this source.
Leasing: In this NHS can take assets for certain duration of time for which is required to make payment of rent. The advantage of this is in terms when the cost of assets is greater than rental price. However, the disadvantage lies in the fact that the company is never in direct ownership of the asset and regular charges in terms of maintenance and repairs need to be made. 


3. Cash flow management technique

Cash flow statement is useful in managing all the organizational operations in effectual manner and through this, expenditures can also be recorded in optimum manner. NHS can record all the expenses and income with the help of cash flow management and this further investment can also be made (Liao, 2013). The importance of Cash Flow management techniques are:

  • Represents the health of the business: A positive cash flow represents that the inflow of cash exceeds the outflow of it and therefore, reflects growth in the business. In the long run, for the cash flow of the company to be positive, it is required that it generates high sales level, to be considered successful. 
  • Budget Projections: Besides representing the financial records in the present financial year, they help the management in planning and forecasting budget constraints for later years as well. The organization can then set their objectives as per the set standards.
  • Taking corrective actions: After analyzing current year statements, cash flow management techniques can help an organization in investigating what went wrong for them and taking remedial measures to prevent similar errors in the future. 

4. Methods of appraising capital strategy projects

The following techniques outline the assessment of strategic capital/investment projects:

  • Accounting rate of return method: Also known as ‘return on investment’, this methods employs the normal techniques of accounting and measures the increase in profit resulting to an increase in investment by expressing such profit as a percentage of that particular capital investment. 
  • Payback period method: Expressed in a  year, the payback period incorporates the casn inflows from a capital investment project to balance with the cash outflows. The main aim of this method is to recognize the recuperation of the initial capital invested in the project. In other words, in this method, the cash inflows will be equal to cash outflows of the concerned project. 
  • Net present value method: The objective of any organization in general is to form wealth by utilizing present and future resources. The cash inflows must exceed all cash outflows to ensure the creation of such wealth. The process of Net Present Value involves discounting cash inflows and outflows distributable to a capital investment project by a pre-calculated weighted average cost of capital. 
  • Internal rate of return method: IRR can be described as a percentage of discount rate that is used in the appraisal of capital investments, which equalizes the cost of a project and the future cash inflows that are to be generated by it.
  • Terminal value method: It is assumed here that each cashflow ativity is reinvested in another project at a preset rate of interest. At the same time, it is assumed that each cash inflow activity is reinvested in another project immediately after the completion of one project. Only if the current value of the total of compounded reinvested cash inflows is bigger in amount than the current value of outflows, the projected plan is accepted. 


ACTIVITY 4

1. Various business ownership structure, roles and accountability of owners and managers in decision making

  • Ownership structure: There is presence of three types of business structure that possess their own requirement of financials as well as various responsibilities of demonstrating financial information. The structure of the firm involves sole trader, limited company as well as partnership. In case of sole trade single person owns and manages the firm. He makes investment of his own funds for the purpose of generating income. On the other hand partnership is regarded as the association among two or more individuals in which the they make investment of their capital and shares the amount of profitability. In contrast to this company is the legal body that came into occurrence by the means of taking into account of certain company laws.     
  • Corporate governance and Legal as well as regulatory requirements: There are various corporate governance, legal and regulatory requirement for the firm like public and private (Kroes and Manikas, 2014). For the purpose of starting up new business private business requires share capital of £1. On the other hand public limited firms needs share capital of £50000 in order to form share capital for starting up new venture. In addition to this public limited needs to denominate shares of the organization in home currency. 
  • Roles and responsibilities: The owners of the organization possess the responsibility to offer sufficient rights to the managers in order to ensure management. On the other hand, executive has crucial role towards management of the business operating functions. They possess the responsibility to make analysis of organization's historical performance and take right decision on right time. 
  • 2. Evaluating methods for appraisal of strategic capital or investment projects

Investment appraisal is considered as the process that can be utilized for assessment of whether the investment project is worth to be conducted. The technique of capital budgeting involves net present value. This has been computed in the manner stated below: 

Net present value: It is referred to as the method that states difference among the total discounted cash inflows and initial investment. 

Net present value

YearCash flow of A (£)P.V factor @ 10%Present Value (£)
1175000.90915907.5
2250000.82620650
3200000.75115020
4325000.68322198
Total present value (£)

73775.5
Initial investment (£)

50000
Net present value (£)

23775.5


YearCash flow of A (£)P.V factor @ 10%Present Value (£)
1237500.90921589
2237500.82619618
3237500.75117836
4237500.68316221
Total present value (£)

75264
Initial investment (£)

50000
Net present value (£)

25264


Interpretation: It can be interpreted that Project B needs to be selected as it possess greater NPV. However decision regarding rejection of Project A is required to be done by organization. 

4.1 Analyse the corporate governance, legal and regulatory requirements of different business ownership structures

Gliedt and Hoicka (2015) stated that it is important to focus on corporate governance systems that emphasize on the policy makers. Liberalization, privatization as well as deregulation of the activities can be helpful to shift decision making responsibility from the government to private sectors. It is important for the organization to have adequate experience on the process. The effectiveness of corporate governance mechanism is not taken as granted. There are several investments in the organization, where is important to focus on exchanged payment process and promise of future returns. Comparison of the value of the market places can be helpful to understand comparable assets and provides indicator of the grabbing hands. There are several significant process compared to others. 

 The business does not vary in size as well as industry in terms of ownership.  Some of the business process is owned by the persons where people own by the large numbers of the stakeholder. It is important to own through charitable foundations and trusts where different structures can overlap with multiple number of procedures are important. Legal and ownership structure can determine several legal responsibilities and process of dividing profits. It is not essential to go into the detailed legal forms as well as ownership structure that can be helpful for the organization appreciating diversity of business (Falkheimer et al. 2017).  The legal forms as well as ownership structure of the particular business organization to focus on the process.  There are different types of organizational structure such as sole trader, limited company and business partnerships.

In sole trader, a person running the business properly can be helpful to make proper process in the business. Sole traders can keep profits of the business after payment of tax. Hence, it is essential for the organization enhancing the procedures and understands the procedure. 

On the other hand, it is important for the organization to focus on other aspects so that it would be helpful to run business. In addition, it is required to develop such plans so that owners of the organization run business effectively (Ogunsiji and Ladanu, 2017). On the other hand, an organization does not focus on the law regards that makes effective sense to develop legal standing as a person. A limited organization has the rights as well as obligations to develop proper plan. It is also important tom improve productivity of the organization. An organization can set up effective process by running the business. Finance of the limited organization can share specific process by implementation of business process.

 On the other hand, business partnership deals with arrangement of the individuals for sharing ownership of the business (Aguilera et al. 2016). There are several types of partnership where general partnerships as well as limited partnership are obtained. It is important for the organization to set the right process and it is important to set the structures of the business. Legal as well as ownership structure is important for business size as well as industry sector that are not completely independent for the business process. 

4.2 Compare and contrast the accountability for and roles of owners and managers in decision making for different business ownership structures

Legal as well as ownership structures and business size are considered as the major aspects of business. In addition, the sector is not completely independent of each other. The sole traders have tendency in small businesses and not least as a single person rarely has financial capacity to finance a large business.  It is not viable running small work as the physical as well as financial investment needed is so large (Ogunsiji and Ladanu 2017). On the other hand, the industry sector as well as legal form is closely related. The law firms as well as some other professional service firms with more professional working in the United Kingdom are legally required setting up the partnerships as well as no other ownership and legal structure is permitted.

It is also important to make an evaluation of the requirements for financial information in business. Identification of the risks associated with financial and business decisions can be helpful for the business process (Dittmar and Field 2016).  In addition, financial information needed in strategic business decision making and purpose, structure and content of published accounts can be helpful to gain competitive benefits.  interpretation of financial ratios from the accounts and process of supporting strategic decision making and distinguishes between long and short term financial needs for business as well as comparison of the sources of long and short term finance for business are useful for the enterprise. Cash flow management techniques and evaluation of cash flow management is significant (Christ et al. 2016). Apart from these, business ownership structures and analysis of governance, legal and regulatory requirements and assessment of methods to appraise strategic capital or investment projects are the major procedures of business. 


CONCLUSION 

It can be concluded from the study that financial information is needed for the purpose of decision making. In addition to this it has been inferred that financial position of NHS is sound and it discloses its accounts in an effective manner. The basic success of a business strategy depends on critical factors. Hence, alignment with external environment in an organization needs a realistic internal view of core competencies as well as sustainable competitive benefits. In addition, careful deployment of business strategy and monitoring can assist to get competitive benefits in the market. In the present study, Talent plus UK has been selected as a case study organization. The particular organization is based on IT processing and outsourcing.  The requirement of financial information within the organization and financial position of the particular organization is evaluated. On the other hand, variance between short and long term economic business requirement that would be helpful to understand the business process of the organization. 

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