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    Economics Presentation 45 Anwesha Chowdhury

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    Economics Presentation 45 Anwesha Chowdhury

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    ANWESHA CHOWDHURY
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    3 views7 pages

    Economics Presentation 45 Anwesha Chowdhury

    Uploaded by

    ANWESHA CHOWDHURY
    g

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    NAME:ANWESHA CHOWDHURY

    STREAM-CSE AIML
    SECTION-I
    ROLL NO-14230822045
    YEAR-2ND
    SUBJECT-ECONOMICS FOR ENGINEERS
    SUBJECT CODE-HSMC-301
    TOPIC-HOW FINANCE IS A TOOL FOR
    DECISION MAKING PROCESS
    INTRODUCTION

    Finance serves as a powerful and indispensable tool for decision-making processes by


    providing valuable insights, analytical methods, and data-driven approaches. Whether
    in personal orbusiness contexts, finance enables individuals and organizations to
    assess potential investments, manage risks, evaluate costs and benefits, optimize
    resource allocation, and plan for the future.
    Through techniques like capital budgeting, risk assessment, cost-benefit analysis, and
    financial planning, finance empowers decision-makers to make informed choices,
    maximize returns,and achieve financial goals. It plays a crucial role in guiding strategic
    decisions, ensuring financial stability, and driving growth and profitability for
    businesses, while also helping individuals secure their financial well-being and plan for
    a secure future.
    The financial decision-making process refers to the set of actions that individuals or
    corporations take to identify, assess, and choose among several financial possibilities
    or options.It entails analysing financial data, considering the advantages and
    disadvantages of various options, and making decisions that are consistent with their
    overall financial goals and objectives.
    Budgeting, investing, borrowing, and risk management are all examples of financial
    decisions that can be influenced by a variety of factors such as economic conditions,
    regulatory environment, and personal preferences.Effective financial decision-making
    necessitates a thorough comprehension of financial ideas and principles, as well as the
    capacity to make sound decisions based on appropriate data and analysis.
    What is Finance?

    Finance is the study of how people and organizations allocate resources over time.It involves making decisions about what to
    invest in, how much money to borrow, and how to manage risk.Finance plays a critical role in decision making because it
    provides a framework for evaluating different options. By analysing the costs and benefits of different choices,individuals and
    organizations can make informed decisions that maximize their returns and minimize their risks.
    Financial accounting is important because it enables firms to keep track of all their financial activities. It is the process by
    which businesses record and report the financial data that flows in and out of their operations, allowing both corporate
    managers and outside investors and analysts to evaluate the firm's health and make informed decisions .
    how finance is a decision making tool

    1)Performing Financial Statement Analysis:-


    Financial statements are among the most important resources at your disposal when it comes to decision-making. You should not only know how
    to read them, but interpret and analyse the data they present.Understanding the numbers on your organization’s balance sheet can indicate its
    current financial position. By examining its cash flow statement , you can gain insight into how cash is being generated and used. Through
    reviewing its income statement,we can gauge how your business is doing in relation to its expected performance.

    2) Evaluating Investment Opportunities: Finance plays a central role in assessing investment opportunities. By analyzing financial data, such as
    cash flow projections,return on investment (ROI) calculations, and net present value (NPV) assessments, decision-makers can identify profitable
    ventures and potential risks. Through tools like cost-benefit analysis and financial modeling, finance helps individuals and businesses make
    informed choices about allocating their capital to projects that promise the highest Returns.
    3. Accounting and Asset Allocation: Finance is the pillar around which effective budgeting and resource allocation are built.Financial data is used by decision-
    makers to develop budgets that are in line with their strategic goals, operational needs, and financial limits. Appropriate resource allocation ensures that the
    organisation optimises its operations and maximises efficiency, resulting in enhanced performance and profitability.

    4. Risk Management: Making sound decisions requires successfully managing risks. Finance enables the assessment and management of risks associated with
    various possibilities. Techniques like as sensitivity analysis, scenario planning, and risk-adjusted return estimates can help you evaluate potential hazards and
    build risk management measures. Decision-makers can make educated decisions that protect the organization's financial well-being by taking risk into account.
    5. Capital Structure and Financing Decisions: An organization's capital structure can have a substantial impact on its financial health and stability. Finance is critical
    in guiding decisions on financing sources such as equity, debt, or a combination of the two. The right mix of finance can alter the cost of capital and the
    organization's overall risk profile. Decision-makers can decide the best appropriate capital structure to support the organization's growth and financial objectives
    by using financial tools such as cost of capital calculations and leverage ratio.

    6. Financial Ratio Analysis: Finance permits the use of financial ratios to measure the performance and financial health of an organisation. Ratios such as the
    current ratio, debt-to-equity ratio, and return on equity provide information on a company's liquidity, leverage, and profitability. These measurements are used by
    decision-makers to benchmark against industry peers and identify areas for improvement.
    CONCLUSION

    The accounting data recorded on a company's financial statements, including the balance
    sheet, income statement, and cash flow statement, is highly relied on in fundamental
    analysis. Financial statements for publicly traded corporations are prepared and submitted to
    the Securities and Exchange Commission (SEC) in accordance with the Financial Accounting
    Standard Board's (FASB) financial accounting rules. Financial statement analysis is critical for
    every firm looking to expand and increase revenue. It should not be compromised because it
    improves corporate operations efficiency. Better protocols and competent analysts can aid in
    the process of deep analysis.
    ACKNOWLEDGEMENT

    I want to thank my economics professor Md.Sahanur Islam


    sir for giving me this opportunity to do this presentation
    on a informative topic.
    I would also like to thank our principal Tirthankar Dutta sir
    for allowing us to be a part of his college and prepare this
    presentation of our subject.
    I would also like to express my thanks to my parents for
    their continuous support towards me while preparing this
    presentation.

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