Read Through The Instructions And Respond Accordingly.

Instructions: Apply these below instructions for the topic below and provide answer with 150- 200 words in APA format 

1. Challenge something that has been posted 

2. Pose a related question or issue

3. Suggest a different perspective or interpretation 

4. Pull in related information from other sources with proper citation – books, articles, websites, courses, etc.  

Please read below:

Part 1 – Financial Acumen

If company is the body, finance is the blood. Financial acumen is not all about numbers and percentages and ratios but it more about interpreting those numbers and rations and act and re-act based on them to improve the business performance of the company. It all about having and creating a mindset for understanding the consequences and generating the value from any investment. In traditional and small companies, privetly owned small to medium sized businesses, only owners and directors and in some cases manger has the knowledge about managing the financial ratios and ability to create and interpret profit and loss statements, budgeting and ROI. It is considered more as a technical function of the business and treated as a more privet /confidential information in many companies and hence as a result , employees do not have the visibility for the business and do not know if and how they are making an impact in the company.

Global financial crises are the evidence of lack of financial acumen in board rooms and it depicts that even top CEOs from banking and insurance industries were either lacking the knowledge about financial acumen or they were not quantifying the all different financial ratios correctly. It is one of the most important qualification for CEOs and board directors to understand the implication of business decision and risks and returns associated with them. Yes it would be really great if all the employees, investors and shareholders could understand and interpret financial number and react to that or at least alarm the board members to react to the situation but it’s minimum requirement that top management react to it . Also it is necessary for most of the managers to understand and interpret these numbers as finance is the only way to depict the performance of the business. Not understanding the financial acumen exists in many businesses around the globe and it will turn out to be a hurdle in company’s success.

On the other side, Investing in employees and training them to learn and understand financial acumen could help companies make financially sound decisions and grow stronger and faster. This gives them ability to not only look at numbers and interpret them but also look at bigger picture and make decision with confidence. Once we have the financial acumen knowledge all we need to do is look at those quarterly reports and performance numbers for the company before investing in them or buying stocks.

Now if we look at benefits of establish solid financial acumen within the organization, they are many based on the type of a business structure and industry. By establishing the solid acumen of the company, it enables everyone to understand how and what makes the money and adds the most value for the business and how they are impacting those numbers. Also it also helps diagnose and improve what is working and what is not working. So far in my professional experience, I have always worked for a company’s who’s very well established and financially stable and knowledge when it comes to financial acumen. My company had a solid KPIs defined with targets and goals to achieve by departments and teams followed by monthly and weekly reviews. This not only helped my company achieve goals and grow but also enabled to look further ahead and see if there are in dark clouds coming and be prepared for it.