Importance of the Utility of Financial Indicators for Economic Decision Making.

Written by:Diomer Antonio Galán Rincón.

Bachelor's Degree.Public Accounting / MSc.Science of Higher Education.

When an organization starts its activities, whether they are productive, commercial or service activities, it needs to make decisions regarding a certain event. It must decide how it will allocate its budgetary resources, how it will finance its activities, for this it is necessary to know the financial statements, as one of the best ways for a company to grow and be profitable as well as solvent, therefore, the good management of the finances of a company is the basis of all successful companies.

Therefore, management decision making is done considering as a tool the analysis of financial indicators, which are an instrument that allows us to know the different advances and delays of the organization; in addition, its financial analysis allows us to evaluate and have an adequate control over the decisions taken, being an instrument of great help for the main managers.

It should be noted that the best known indicators are the mission and vision of the organizations, but there are also others that can be determined with operational and strategic planning. It is very important to be able to make use of financial management indicators, since it lies, above all, in the speed and veracity with which the information is transferred to senior management, preventing the information from being misrepresented.

Therefore, a financial administration will provide adequate plans that will help any business to provide better products to its customers at lower prices, pay higher salaries to its workers and generate higher returns for its investors who have placed the necessary funds for the creation and operation of the company. Because the economy, both nationally and globally, is made up of customers, employees and investors, financial planning is the basis for the stability and economic success of the organization.

The aforementioned circumstances can help or weaken the company as an organization, by taking economic measures that have given it a short-term support, without taking full advantage of its potential so that the decisions emanating from the analysis of the financial information provide the benefit in the long term or if possible permanently, therein lies its importance, and that does not jeopardize the investment, the stability of the associates, and in turn causes the company's competitiveness to be diminished against its competitors.

I hope you like my article and I would appreciate all your comments.

1.- Bodie C. and Merton R. (2003), Globalization and the financial system. Financial Management.