Sectorial Historical Financial Performance
Introduction.
Finance as part of the Business Sciences arises with the need to give clear answers to the management that did not understand their own daily work and required specific techniques for the analysis of the financial performance of their companies. At the beginning of the 1901 and 1920, the interest in finance was concentrated in the monetary registry of the company’s operations and the descriptive study of institutions and operations of the capital market.
Years later, financial theory was expanded around the liquidity and financial structure of companies; In the fifties, the modern approach of finance began, when a strong economic expansion occurred through financing and investment decisions; and later in the eighties and ninety years deepening the studies of the use in finance as well as the use of microeconomic foundations, quantitative techniques, computer applications and at the same time giving rise to financial engineering, causing an expansion of new products and financial structures.
Developing.
Finishing with all of the above, companies decided that they must maximize their market value causing with that the development of corporate finances, where financing and investment decisions are included that affect the value of the company. According to many discrepancies within finance, financial administration techniques were given, where currently the financial function includes the budget structure, as well as the short and long term decisions, which are carried out Through future project what you want to achieve and the resources that must be implemented to achieve it, with it, born business management.
One of the definitions provided is that of Robles, who says that it is a technique of the financial administration with which the study, evaluation and projection of the financial statements of an organization or company is intended, visualizing the results in advance. It is a tool that tells us where the company has been, where it is now and where it goes.
Rosillón, points out that the analysis of financial management lies in identifying the economic and financial aspects that show the conditions under which a company operates with respect to the level of liquidity, solvency, management and profitability, facilitating decision making within business activities. It is important to note that financial management is not only of great importance in companies already created but also in those that are in the process of creation. Authors such as Varela, Meléndez, Frixione and Mejía agree that in the process of creating the company this method or administrative tool has significant value.
Financial planning is the means by which companies can visualize the results of the different organizational areas in quantitative terms and thus intervene in them so that an economic balance is achieved at all levels of the company, facing the challenges and changes that imposes the environment in the best way, since it becomes the basis for successful decision making, allowing future business behaviors and their repercussions on the economic, accounting and financial situation of the same.
A conscious management based on anticipating money needs and their correct execution, seeking financial performance and safety standards, through proper planning of the budget system is a key tool that modern administrations have for the fulfillment of their goals and objectives To this is added the changing environment of the markets.
Based on the times, we could talk about three fundamental types of financial planning according to Valdés, which are:
• Long -term financial planning, this planning is what is normally carried out with a period of three to five years.
• Financial planning in the short term the planning that is carried out in a period of less than one year is known.
• Operational planning that is carried out every day.
On the other hand, it is identified in the process of modeling and financial projection, the need to have well defined and clarified the parameters or variables that impact the results, both internal (of the company) and external and external (macroeconomic factors, legal policies), already that the results of the projection depend largely on these.
Three coincident elements are identified in general, key in the financial planning process:
1. Cash planning understood as the elaboration of cash budgets. Without an adequate level of cash and despite the level that the profits present the company is exposed to failure.
two. Utilities planning is obtained through proform financial statements, which show early levels of income, assets, liabilities and social capital.
3. Cash budgets and proforma states are useful not only for internal financial planning; but are part of the information demanded by both present and future lenders.
Conclusions.
Only through financial management, it is possible financial acquires real importance; As a business management tool that helps improve the financial results and decisions taken within the organization, as well as its impact on the creation of sustainable companies over time, which could speak of a culture of generation of generation of value in these new economic units.
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