FINANCE SUMMARY QUESTIONS AND ANSWERS UPDATED

FINANCE SUMMARY QUESTIONS AND
ANSWERS UPDATED 2024 - 2025
Role,of,financial,management,,,ANS,--,Strategic,role,of,financial,management

-,Objectives,of,financial,management

,-,profitability,,growth,,efficiency,,liquidity,,solvency

,-,short-term,and,long-term

-,Interdependence,with,other,key,business,functions



Strategic,role,of,financial,management,,,ANS,--
,Financial,management,is,the,panning,and,monitoring,of,a,businesses,financial,resources,in,order,to,allo
w,the,business,to,achieve,its,financial,objectives

-
,The,strategic,role,of,financial,management,refers,specifically,to,the,strategies,that,are,adopted,by,the,b
usiness,to,achieve,its,short-term,and,long-term,objectives.,

-
,The,goals,of,a,business,can,include,increasing,market,share,and,profit.,These,goals,are,translated,into,ob
jectives,that,aim,to,provide,greater,details,and,outcomes.,This,means,they,can,be,measured,and,evaluat
ed,for,current,and,future,plans.



Objectives,of,financial,management

,-,profitability,,growth,,efficiency,,liquidity,,solvency

,-,short-term,and,long-term,,,ANS,--
,The,main,objectives,of,financial,management,include,profitability,,liquidity,,efficiency,,growth,,solvency,
-,short-term,and,long-term.,

-,The,short-
term,objectives,of,a,business,include,both,tactical,and,operational,plans,of,a,business,,which,would,be,re
viewed,regularly,to,determine,if,targets,are,being,met.,

-,The,long-
term,objectives,of,a,business,include,strategic,plans,of,a,business,and,are,set,for,a,period,of,time,more,th
an,five,years.,They,form,the,basis,on,which,all,short-term,goals,are,established.

, Interdependence,with,other,key,business,functions,,,ANS,--
,Interdependence,of,the,key,business,functions,means,that,each,function,is,not,able,to,operate,in,isolatio
n,successfully,-,it,relies,on,the,others,to,perform,its,role,in,achieving,the,broader,goals,of,a,business.,

-,Finance,plays,a,crucial,role,in,funding,extra,resources.



Influences,on,financial,management,,,ANS,--,Internal,sources,of,finance,-,retained,profits

-,External,sources,of,finance

,-,debt,-,short-term,borrowing,(overdraft,,commercial,bills,,factoring),,long-
term,borrowing,(mortgage,,debentures,,unsecured,notes,,leasing)

,-,equity,-,ordinary,shares,(new,issues,,rights,issues,,placements,,share,purchase,plans),,private,equity

-,Financial,institutions,-
,banks,,investment,banks,,finance,companies,,superannuation,funds,,life,insurance,companies,,unit,trust
s,and,the,Australian,Securities,Exchange

-,Influence,of,government,-,Australian,Securities,and,Investments,Commission,,company,taxation

-,Global,market,influences,-,economic,outlook,,availability,of,funds,,interest,rates



Internal,sources,of,finance,-,retained,profits,,,ANS,--
,The,main,sources,of,internal,finance,are,owners,equity,and,retained,profits,,which,are,the,business,profi
ts,that,are,not,distributed,by,shareholders,but,are,commonly,used,as,a,source,of,finance,for,current,or,fu
ture,expenses,such,as,capital,equipment.



External,sources,of,finance

,-,debt,-,short-term,borrowing,(overdraft,,commercial,bills,,factoring),,long-
term,borrowing,(mortgage,,debentures,,unsecured,notes,,leasing)

,-,equity,-
,ordinary,shares,(new,issues,,rights,issues,,placements,,share,purchase,plans),,private,equity,,,ANS,--
,External,finance,is,the,funds,provided,by,sources,outside,the,business,such,as,financial,institutions,,gove
rnments,and,suppliers.,

-,External,sources,of,finance,are,broadly,categorized,as,either,debt,or,equity-
,each,will,influence,the,financial,management,decisions,of,a,business.,

-,Debt,finance,can,be,short-term,borrowings,such,as,overdrafts,,commercial,bills,and,factoring,,or,long-
term,borrowings,such,as,mortgages,,debentures,,unsecure,notes,and,leasing.,

-,Equity,refers,to,the,cash,raised,by,a,company,by:,

,-,Issuing,ordinary,shares,to,the