Using Financial Reports to Make Decisions
The general and comprehensive report which details all the aspect of the organization were instrumental in assisting Intel to make decisions on how the organization was to be improved or developed. For instance, in reviewing the annual net revenue for Intel for the past ten years, Intel was able to determine that although the organization remains profitable due to the total revenue obtained at the end of the year, the net revenue has still declined as compared to the previous year.
Through this particular information, Intel was able to assess the changes or modifications in the organizational processes, operations, policies, and practices, which resulted to the decline in sales. From the analyses, Intel pointed out key issues that should be addressed in the following year, such as cutting down the rate and cost of production following the results of the Geographic Breakdown of Revenue.
From these particular data, Intel was able to decide the volume of goods and services that shall be produced for each geographical region based on the market demand in order to prevent the wastage of financial resources, production time, overall production cost, human capital, and so on. Moreover, the organization monitors how Intel spends for the Capital Additions to Property, Plant and Equipment, as well as Research and Development.
In these cases, the organization was able to determine whether there was a need to increase or further minimize the cost for the development of the facilities or equipment based on the rate of technical production and the problems encountered in the process. In addition, the increased cost allocated to Research and Development was also reviewed and tied to the results of the net revenue in order to determine the effect of Research and Development in the organization’s financial growth.
By and large, the financial statements and evaluations were all connected with the net revenue in order to determine how each aspect contributed or hindered to the development of Intel. Conclusion In reviewing the financial statements of Intel and analyzing the organization’s progress thereafter, we realize the importance of such reports in guiding how organizations are to direct and facilitate growth and expansion under different aspects of the organization.
In addition, we have also realized how the financial statement may become a strategic tool in increasing the capital or resources of the organization by attracting new investors or strengthening the organization’s relationship with current investors. Most importantly, financial statements are critical in the organization’s planning and implementation of decisions that shall help in the process of advancing its position in the corporate arena. Overall, the financial statement is an indispensable tool that sets the stage for organizational growth and development.