Role
What acronym is used for the objectives of the finance function?
PLEGS
What is the acronym for the Influences on Finance and what does it stand for?
SIGG
Sources of Finance
Institutions
Government
Global Market Influences
What is the acronym for Institutions as an influence on Finance?
BUFSAIL
What is the acronym for Planning and Implementing in Finance Processes?
RBCRN
(red and blue corner)
Which topic (KBF and RIPS)?
TASI
Marketing / Role
Give the formulas for how to calculate the Gross Profit and Net Profit of a business, using the terms Cost of Goods Sold, Gross Profit, Revenue and Expenses
Revenue - COGS = Gross profit
Gross profit - Expenses = Net profit
What type of finance is Owner's Equity, and what are 2 examples?
personal savings, inheritance, gift, payout from being made redundant, personal loan
What is a prospectus and how does it relate to Institutions?
A prospectus is a detailed summary of a business public company issued to prospective shareholders, to help them decide whether or not to invest their money into the business. It is related to Institutions as public businesses are listed on the ASX (Australian Securities Exchange), which is one of the BUFSAIL.
What does RBCRN stand for?
Records
Budgets
Controls
Risks
Needs
Which topic (KFB and RIPS)?
PLEGS
Finance / Role
Define Liquidity
the measure of how quickly an asset can be converted into cash, therefore determining the ability of the business to pay short-term debts as they fall due.
Identify 3 sources of Debt finance suitable for short-term borrowing
Overdraft, Commercial Bills, Factoring
How do the Bank's interest rates impact a business's financial decisions? Use the terms high interest rate, low interest rate and expenses.
When there is a high interest rate, businesses will be less likely to take out loans. When there is a low interest rate, businesses are more likely to take out loans. The interest a business has to pay forms part of its expenses.
Identify 3 factors that determine a business's financial needs
Size of business, stage of economic cycle, future plans for growth, capacity to source finance, management skills
What acronym for Marketing Processes?
SMEIDI
Identify 4 ways a business might obtain the Growth objective
increasing physical size of business
increasing the value of assets
increasing sales and profits
increasing market share
opening more branches/stores
taking over or purchasing a competitor
diversifying and taking over another business
expanding the business's range of products
Name 4 types of Debt finance suitable for long-term borrowing
Mortgages, Debentures, Unsecured notes and Leasing
What does ASIC stand for and how does it influence finance decisions?
ASIC (the Australian Securities and Investments Commission) is Australia’s integrated corporate, markets, financial services, and consumer credit regulator.
Legal requirement
Helps managers make accurate business decisions
Give the acronyms for the strategies of Operations and Marketing.
4Ps - 3Ps + E and G
POGOSQuINT
Which goal of finance is reflected in the expense ratio, what is the formula, how is the result expressed and what does it mean?
Efficiency
Total expenses / total sales.
The result is expressed as a %
The lower the result, the more efficient the business
What is the difference between New Issues and Rights Issues as a source of Public Equity Finance?
New issues are when shares are offered for the first time on the ASX. Rights Issues are when existing shareholders are offered the purchase of more shares.
4 influences of the global market on a business's finance decisions.
Overseas interest rates on loans/borrowings (beneficial if they are lower)
Exchange rates – need to be considered when buying/selling goods and services at a global scale or making deals
International laws or legislation in other countries (including tax) needs to be followed
If global economic outlook is dim businesses generally reduce activities and find ways to further reduce costs
Financial controls protect against which 4 most common causes of financial problems and losses
Theft
Fraud
Damage or loss of assets
Errors in record systems
Give all acronyms for the Influences on Marketing
FEC
PEGS
TAPES
WIPD