Use of financial indicators as a tool for decision making in companies.
At present, organizations are facing the various changes of a globalized world, which has led them to seek different strategies that allow them to operate in a competitive business world, orienting their actions to maintain levels of productivity and effectiveness to sustain themselves in a potential market, according to the demands of the same, for which the use of financial indicators that allow making decisions focused on financial productivity is decisive.
In this regard, Bodie and Merton (2003) indicate, "The starting point for making this type of decision is the determination of a feasible financing plan for the company. Once this plan is completed, the next step is to decide on the optimal financing mix". Generally, organizations face financial problems that are difficult to manage: facing financial costs, risk, low profitability, conflicts to finance themselves with their own and permanent resources, ineffective investment decisions, control of operations, distribution of dividends, among others.
For this reason, a company facing a difficult and convulsed environment with the problems described above, must implement measures that allow it to be more competitive and efficient from the economic and financial perspective, so that it makes better use of its resources to obtain higher productivity and better results with lower costs; reason that implies the need to carry out an exhaustive analysis of the economic and financial situation of the activity it carries out. To this end, it is essential for company managers to know the main economic and financial indicators and their respective interpretation, which leads to deepen and apply financial analysis as a fundamental basis for effective financial decision making.
In this sense, Pérez, E (2010) define financial analysis as "an instrument available to management, which serves to predict the results that some strategic decisions may produce in the future performance of the company". Indeed, financial analysis is a key tool for the management of any organization, since it contemplates a set of principles and procedures used in the transformation of accounting, economic and financial information that, once processed, is useful for making investment, financing, planning and control decisions with greater ease and relevance, in addition to making it possible to compare the results obtained by a company over a given period of time with the results of other similar businesses.
Another instrument that goes hand in hand with the above are the financial indicators, which provide great information about the operation and financial position of the company, basically when they are calculated for a series of periods, this allows to determine averages and trends and also when they are compared between several companies of the same industry; because, only through the financial indicators it is possible to compare companies of the same activity regardless of their size.
The foregoing indicates that the results obtained from the analysis of the financial statements facilitate the possibility of analyzing the evolution of the company over time, determine the efficiency in the use of economic and financial resources and visualize the performance of the company's financial management, since this is fundamentally related to decision making regarding the size and composition of assets, the level and structure of financing and the dividend policies established in a company.
Reference Consulted
Bodie C. and Merton R. (2003), Globalization and the financial system. Finance Management 2003. [Available Online]: https://books.google.com/books/about/Finanzas.html?id=DDwrOgAACAAJ Consultation 2018.
Pérez, E (2010), Application of Management Indicators as a tool for decision making in the company Galeos Motors, C.A., Unpublished graduate work for the University of Carabobo.< /li>