Processes
Influences
Strategies
Strategies
Role of Finance
100

Name one limitation of a financial report

Normalised earnings, Capitalising Expenses, Valuing Assets, Timing issues

100

what is an internal source of finance?

(owners equity or retained profits)

100
  1. What are the three strategies under cash flow management?
  • Distribution of payments
  • Discounts for early payment
  • Factoring
100
  1. What are the three Cost controls?
  • Fixed and variable.
  • Cost centres
  • Expense minimisation
100

what are the strategic roles of financial management

business objective goals, strategic plan, Managing financial roles

200

What is one benefit of equity financing

  • Owners do not have to be repaid for their capital after a certain period
  • Cheaper than other sources of finance as there is no interest payments
  • Equity has lower risk for the business and the owner
  • Equity financing is better in weak external conditions, as there are no fixed obligations
200

How long is short term borrowing?

(repaid in 1-2 years)

200
  1. How do businesses control current assets?
  • Cash
  • Receivables
  • Inventories
200
  1. How do businesses control current liabilities?
  • Payables
  • Loans
  • Overdrafts
200

What are the Objectives of financial management

Profitability, Growth, Efficiency, Liquidity and Solvency

300

What is the liquidity ratio

(Current assets ÷ Current Liabilities)

300

What is factoring?

(Short term debt financing that involves selling the business’ accounts that involves the business’ accounts receivable to a debt factor)

300
  1. What are the strategies to control current liabilities?
  • Leasing
  • Sales and Lease back
300
  1. What are the 3 fixed and variable costs which can be lowered?
  • Energy
  • Raw Materials
  • Cost of labour
300

what are the business objectives and goals

Increase divide end yields, Maintain an environmentally friendly business, be market leader with in 5 years

400

What are the three methods of comparative ratio analysis

Same business over time, Similar business, Against standards

400

Name 3 examples of financial institutions

(possible answers: investment banks, finance companies, superannuation funds, life insurance companies, unit trusts/ASX)

400
  1. What are the benefits of factoring?
  • Turns accounts receivable into cash earlier than payments from customers are due.
  • Useful because the business saves on the admin costs.
400
  1. What are the types of expense minimisation which businesses can employ?
  • Financial Expenses
  • Administrative Expenses
  • Selling Expenses
400

- Difference between short term and long term Objectives

short term is tactical (12 month) and operational (day to day). While, long term is strategic plans that generally take more than 5 years

500

What are the three methods of financial ratio analysis

  • Vertical analysis compares figures within one financial year
  • Horizontal analysis compares figures from different financial years
  • Trend analysis compares figures for periods of three to five years
500

What are the 4 examples of long-term borrowing?

(mortgage, debentures, unsecured note, leasing)

500
  1. What are the methods of international payments?
  • Payment in advance
  • Letter of credit
  • Clean payment
  • Bill of exchange
500
  1. What are the 5 main headings under global financial management?
  • Exchange rates
  • Interest Rates
  • Methods of international payments
  • Hedging
  • Derivatives
500

why is their interdependent between marketing and finance

Finance provides money and marketing generates sales

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