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It is crucial for students to understand the business environment they are operating and how it affects their daily operations. Understanding strategic management concepts can help you achieve higher levels of success as an individual or company owner. You will be able to make decisions that have positive impacts on your organization’s performance, customer satisfaction and profitability.
- Explain why corporations use financial accounting information for decision-making?
- b) How does a firm decide which investment projects should be undertaken?
- c) What is meant by corporate governance?
- d) Explain why firms engage in mergers and acquisitions?
Because a firm’s management prepares financial statements, they can be used to make decisions. Managers use the net income number from the profit and loss statement as their starting point because it shows how much money the company earned or lost during a specific period. They may then add other numbers, such as sales data and costs of goods sold, to help them make better decisions.