Question

(Imagine\make up a branding agency and answer the following questions)/(the question is meant to be vague and so is the answer)

-What kind of financial analysis and decision-making methods are used by corporate treasurers and financial managers in the internship organization?

-What kinds of incentives are used in order to create more effective and efficient organization?

Answer 1

There are three main methods of financial analysis:

1. Horizontal and vertical analysis

When using the horizontal analysis method, financial information is compared over a sequence of reporting periods. The vertical analysis method allows analysing financial information in a proportional manner, where every line item on a financial statement is recorded as a proportion of another item. Naturally, this implies that each line item detailed on the income statement is quantified as a proportion of gross sales, whereas each line item detailed on a balance sheet is quantified as a proportion of total assets.

2. Ratio analysis

Ratios are used to calculate the comparative size of a number in relation to another number. After a ratio is calculated, it can be used to compare a similar ratio calculated for a previous period, or a ratio founded on an average of a particular industry in order to establish whether the company’s performance is in harmony with set expectations. In a typical financial analysis exercise, the majority of ratios will be within set expectations while a few will highlight potential issues, thereby attracting the reviewer’s attention. Ratios have been generalised into four categories namely: liquidity ratios, activity ratios, leverage ratios, and profitability ratios.

3. Trend analysis

This entails reviewing financial statements of three or more periods, an extension of horizontal analysis. The earliest year in the set data represents the base year. In trend analysis, users assess statements for incremental change patterns. A change in financial statements can indicate that there are either increased income or decreased expenses

and where

According to Patterson, Grenny, McMillan, and Switzler, there’s four common ways of making decisions:

1. Command – decisions are made with no involvement.
2. Consult – invite input from others.
3. Vote – discuss options and then call for a vote.
4. Consensus – talk until everyone agrees to one decision.

1. Command Style Decision Making

According to Patterson, Grenny, McMillan and Switzler, command is when there’s no involvement:

“Let’s start with decisions that are made with no involvement whatsoever. This happens in one of two ways. Either outside forces place demands on us (demands that leave us no wiggle room), or we turn decisions over to others and then follow their lead. We don’t care enough to be involved – let someone else do the work.”

2. Consult Style Decision Making

According to Patterson, Grenny, McMillan and Switzler, consult is when you ask for input:

“Consulting is a process whereby decision makers invite others to influence them before they make their choice. You can consult with experts, a representative population, or even everyone who wants to offer an opinion.

Consulting can be an efficient way of gaining ideas and support without bogging down the decision making process. At least not too much. Wise leaders, parents, and even couples frequently make decisions in this way. They gather ideas, evaluate options, make a choice, and then inform the broader population.”

3. Vote Style Decision Making

Patterson, Grenny, McMillan and Switzler, suggest only using a vote when team members agree to support whatever decision is made:

“Voting is best suited to situations where efficiency is the highest value – and you’re selecting from a number of good options. Members of the team realize they may not get their first choice, but frankly they don’t want to waste time talking the issue to death.

They may discuss options for a while and then call for a vote. When facing several decent options, voting is a great time saver but should never be used when team members don’t agree to support whatever decision is made. In these cases, consensus is required.”

4. Consensus Style Decision Making

Patterson, Grenny, McMillan and Switzler, suggest using consensus when there’s high stakes or you need everyone to fully support the final decision:

This method can be both a great blessing and a frustrating curse. Consensus means that you talk until everyone honestly agrees to one decision. This method can produce tremendous unity and high-quality decisions. If misapplied, it can also be a horrible waste of time. It should only be used with (1) high-stakes and complex issues or (2) issues where everyone absolutely must support the final choice.

kinds of incentives are used in order to create more effective and efficient organization are-

· Monetary incentives- Those incentives which satisfy the subordinates by providing them rewards in terms of rupees. Money has been recognized as a chief source of satisfying the needs of people. Money is also helpful to satisfy the social needs by possessing various material items. Therefore, money not only satisfies psychological needs but also the security and social needs. Therefore, in many factories, various wage plans and bonus schemes are introduced to motivate and stimulate the people to work.

· Non-monetary incentives- Besides the monetary incentives, there are certain non-financial incentives which can satisfy the ego and self- actualization needs of employees. The incentives which cannot be measured in terms of money are under the category of “Non- monetary incentives”. Whenever a manager has to satisfy the psychological needs of the subordinates, he makes use of non-financial incentives. Non- financial incentives can be of the following types:-

1. Security of service- Job security is an incentive which provides great motivation to employees. If his job is secured, he will put maximum efforts to achieve the objectives of the enterprise. This also helps since he is very far off from mental tension and he can give his best to the enterprise.
2. Praise or recognition- The praise or recognition is another non- financial incentive which satisfies the ego needs of the employees. Sometimes praise becomes more effective than any other incentive. The employees will respond more to praise and try to give the best of their abilities to a concern.
3. Suggestion scheme- The organization should look forward to taking suggestions and inviting suggestion schemes from the subordinates. This inculcates a spirit of participation in the employees. This can be done by publishing various articles written by employees to improve the work environment which can be published in various magazines of the company. This also is helpful to motivate the employees to feel important and they can also be in search for innovative methods which can be applied for better work methods. This ultimately helps in growing a concern and adapting new methods of operations.
4. Job enrichment- Job enrichment is another non- monetary incentive in which the job of a worker can be enriched. This can be done by increasing his responsibilities, giving him an important designation, increasing the content and nature of the work. This way efficient worker can get challenging jobs in which they can prove their worth. This also helps in the greatest motivation of the efficient employees.
5. Promotion opportunities- Promotion is an effective tool to increase the spirit to work in a concern. If the employees are provided opportunities for the advancement and growth, they feel satisfied and contented and they become more committed to the organization.