Studentshare
Subjects
Finance & Accounting
Do financial management decisions influence firm value

Do financial management decisions influence firm value - Essay Example

Summary

Name Instructor Task Date a) Discuss the main financial management decisions taken by BP (British Petroleum) and how they are related Financial management decision involve adopting an inventive, open-learning approach to introduce the main principles of financial management in an accessible, non-technical way that help the business to achieve its goals and objectives (Lawrence, 2011)…

Download full paper File format: .doc, available for editing

GRAB THE BEST PAPER97.2% of users find it useful

Do financial management decisions influence firm value

Read Text Preview

Subject: Finance & Accounting
Type: Essay
Level: Undergraduate
Pages: 4 (1000 words)
Downloads: 2
Author: aleen19

Extract of sample "Do financial management decisions influence firm value"

Download file to see previous pages

Investment Decisions The BP is a well-established company that diversified into business such as chemicals, coal, gas, minerals and nutrition that would improve the effectiveness of the company. This diversification strategy led to problems in allocating investment resources between the different division’s projects of the large conglomerate. According to Dayananda (2002), the investment has led to losses that demonstrate that the company could not successfully compete in the fiercely competitive international oil business while also trying to compete in other business.

Owing to the volatile prices, BP shifted to the financial tool to help it to accomplish its strategies goals. According to Kent & Gerald (2011), the company began to concentrate primary on the investment business; problems of fitting corporate decisions into both the strategic and financial framework of the company are difficult to resolve. This led to a conclusion that the investment decisions were based upon dissimilar theories that sometimes contracted each other. BP investment growth focused on three areas of great interest; deep-water production, global gas including unconventional gas, and managing some of the major globe oilfields.

In each field, BP has made significant advances. Financial Decisions Eugene & Michael (2010) demonstrate that finding useful financial tools to make informed investment decisions has traditionally been the point of interest of corporate financial officers. The most widely accepted financial decision focus mainly on a narrow range of internal variables, quantitative information, shorter-term results, control processes, and techniques to determine specific risks of the BP. McDonald (2001) indicate that BP outlined financial decisions to further enhance efficiency and condense costs within the company with the main purpose of improving its annual underlying pre-tax profitability.

The company is expected to enhance capital efficiency and improve returns in the coming years. Finally, BP's financial management decisio

...Download file to see next pages Read More

Cite this document

APA
MLA
CHICAGO

(“Do financial management decisions influence firm value Essay”, n.d.)
Do financial management decisions influence firm value Essay. Retrieved from https://studentshare.org/finance-accounting/1437638-do-financial-management-decisions-influence-firm

(Do Financial Management Decisions Influence Firm Value Essay)
Do Financial Management Decisions Influence Firm Value Essay. https://studentshare.org/finance-accounting/1437638-do-financial-management-decisions-influence-firm.

“Do Financial Management Decisions Influence Firm Value Essay”, n.d. https://studentshare.org/finance-accounting/1437638-do-financial-management-decisions-influence-firm.

Cited: 0 times

CHECK THESE SAMPLES OF Do financial management decisions influence firm value

Strategic Investment Decisions

STRATEGIC INVESTMENT DECISIONS INTRODUCTION Primary objective of the firm is to maximize value of the firm or more defined to state would be enlightened value maximization as titled in the research of Jensen (2001).... Enlightened value maximization is aimed not only to benefit the shareholders that claim only financial benefit but also to maximize value for entire stakeholders of internal and external domain.... Managers of the firm themselves receive impact from their traits leading to influenced preferences in making decision....

12 Pages (3000 words) Essay

Capital Structure Determinants and Factors Affecting Capital Structure Decisions

Collateral value of assets is believed to have defined effects on how managers manage firms' capital.... The current state of literature of theoretical and empirical literature does not provide a single, comprehensive answer to the problem of capital structure decisions and the aspects, which influence them.... It would be fair to assume that key aspects, which influence capital structure decisions, will vary across firms and depend on the circumstances of each particular decision....

8 Pages (2000 words) Essay

Making Financial Decision Based on Financial Information

nbsp; British Airways was not resistant to outside factors distressing the aviation industry, but the IA Group which spent a great deal of 2011 in delivering powerful operational and financial performance, was able to establish firm foundations for a brilliant future.... “Current ratio is a financial ratio that measures whether or not a company has enough resources to pay its debt over the next business cycle (usually 12 months) by comparing the firm's current assets to its current liabilities” (Current radio Interpretation 2009)....

7 Pages (1750 words) Case Study

Financial Accounting. Relevance and Reliability

This is one of the important characteristics of a business which directly influence the return on the investment of the existing investors of a business and it is also the key important factor to the potential investors by which they are generally influenced to invest in company.... Net cash flow of a business is directly influence the return for the investors of a business so it is another important factor of a business which financial stateme... The main objective accounting policies and standards is to produce fair valued accounting information that is reliable and relevant to the purpose of the financial statements....

14 Pages (3500 words) Dissertation

Management Decisions

The paper gives detailed information about management decisions.... management decisions in a business revolve around value maximization of the stockholders.... This is enhanced through consumption and investment channels that exist in the product and financial market management decisions.... This paperwork focuses on management decisions to regulate stock prices and input cost in order to enhance the economic growth of the firm....

13 Pages (3250 words) Term Paper

Capital Structure and Performance of UK Financial Institutions

Reflections 68 References 71 Bibliography 77 Appendices 80 Table 1 – Regression Model of Royal Bank of Scotland 80 Table 2 – Regression Model of Standard Chartered Plc 84 Table 3 – Regression Model of Barclays Plc 89 Table 4 – Regression Model of HSBC 93 Table 5 – Regression Model of Lloyds 97 Chapter 1: Introduction The functions of financial management of a firm deal with the management of the sources from which funds are received and the effective utilization of such funds....

63 Pages (15750 words) Dissertation

Shareholders Value, Assets and Liabilities Perspective

The accounting approach does not measure the large gaps between the true value of the firm and the observed market value.... The accountant uses a document called the balance sheet to depict the financial condition of the firm at any point of time.... Assets are resources that help the firm generate future cash inflows or reduce outflows.... hellip; Liabilities are the claims to the assets of the firm.... The balance sheet equation is: Transactions that affect the financial position of the firm are recorded in the balance sheet....

6 Pages (1500 words) Essay

Capital Funding Structure

nbsp; It has to be efficiently managed on account of its impact on the shareholder value.... The higher the ROIC, the more is the value generated by the company.... he efficient management of available resources maximizes the value of the company.... nbsp;… The firm can use its capital structure to influence the behaviour of its competitors, suppliers, and customers.... A highly reputed firm can take advantage of its powerful position to command favourable deal from the suppliers....

10 Pages (2500 words) Case Study