Assignment

Assignment 1

Barbara A. Parson

Salem International University

The financial health of an organization is vital as it allows the organization to overcome the rigors of financial reporting standards. The financial analysis tools can help the manager answer important questions about the organization. Also, the financial analysis tool can assist the manger in the daily operations as well as the long term strategic objectives of the organization. The organization’s goals, staff, efficiency, financial statements, profits and loss, balance sheet, and cash flow forecast must be assessed by financial tools. These tasks are accomplished by using tools such as the Balance Sheet Analysis and Cash Flow Analysis ("Microstrategy," n.d.). And so, this paper will discuss several examples and applicable rationale with respect to how financial analysis tools can be used to assess and improve business performance.

Accordingly, the organization must first assess the business performance as this can be done by a review of the business plan. The SWOT analysis tool paired with the financial analysis will provide critical information about issues that will cause problems for the organization. The SWOT analysis will identify strengths, weakness, opportunities and threats. The SWOT analysis will help the organization in an economic downturn. Furthermore, the financial analysis “best practice financial management involves planning and forecasting financials based on the strategic goals of your business, and regularly reviewing actual performance against your forecasts. To conduct a financial analysis of your business, you need to analyze your current financial statements, including profit and loss and cash flow. Look for trends, such as declining sales, that may put your business at risk, and think about the impact they could have on your business's financial performance (“Assess business performance,” 2012).”

As a result, financial analysis tool are popular and widely used...