Abacus Distribution plc Essay Example | Topics and Well Written Essays - 1500 words

Abacus Distribution plc - Essay Example The Group has adopted a customer service policy with more personalised local service and a strong technical support. This ensures the company’s performance in providing quality products and support from a strongly motivated workforce. The company has an office in Asia with manufacturing operations extended in the Far East to supply European customers, quality products at competitive prices. In general, the objective of a company must be to create value for its shareholders. Value is represented by the market price of the company’s common stock, which in turn is a function of the firm’s investment, financing, and dividend decisions. The basic idea of managing finance in any business venture therefore is to acquire assets and invest in new products and services where expected return exceeds their cost, to finance with those instruments where there is particular advantage, tax or otherwise and to undertake a meaningful dividend policy for stockholders. (Ross et al.) These functions define the scope and role of financial management in any organisation. The financial management function thus concerns the acquisition, financing, and management of assets with the overall organisational goals in mind. In line with the above principles of financial management the company has taken the following actions in the financial discipline. During the year 2004 the company embarked on a major capital expenditure in upgrading the business system of the company scheduled to be completed in the year 2007. The company has adopted a policy of acquiring large properties on a freehold basis. In line with this policy the company has invested in the acquisition of subsidiaries to the extent of  £2.1 million, a net investment of  £1.1 million in plant, machinery, and equipments, and a small investment of  £0.1 million in land and building. There is an investment of  £50 million representing the acquisition of Deltron Electronics Group UK having subsidiaries in