BUSINESS STUDIES - FINANCE MANAGEMENT
EXAM QUESTIONS AND ANSWERS 100%
ACCURATE!!
,Definition of Finance management - ANSWERthe planning and monitoring of a
business' financial resources to enable the business to achieve its financial objectives.
Strategic Roles of Financial Management - ANSWER- Sourcing finances
- preparing budgets and forecasting future finances
- maintaining sufficient cash flow
Strategic plan - ANSWERencompasses a long-term view of where the business is
going, how it will get there and a monitoring process to keep track of progress along the
way.
Objectives of Financial Management - ANSWER- profitability, growth, efficiency,
liquidity, solvency
- short-term and long-term
Objectives of Financial Management - Profitability - ANSWERthe ability of a business to
maximise its profits.
Strats to improve profitability - ANSWERTo ensure profit maximisation, financial
management must monitor revenue, pricing policies, costs, expenses and assets.
Objectives of Financial Management - Liquidity - ANSWERthe extent to which a
business can meet its financial obligations in the short term.
Strats to improve Liquidity - ANSWERBusinesses must have sufficient cash flow to
meet their financial obligations or be able to convert current assets into cash.
By controlling cash flow, financial managers will ensure they have adequate funds when
needed.
Objectives of Financial Management - Efficiency - ANSWERThe ability of the business
to minimise its costs and manage its assets so that maximum profit is achieved with the
lowest possible level of assets.
Strats to improve Efficiency - ANSWERAims to monitor levels of inventory , cash, and
the collection of receivables so that businesses are able to pay their debts when they
are due.
, Long Term Financial Objectives: - ANSWERDetermined for a set period of time, they
tend to be broad goals such as increasing profit or market share, and each will require a
series of short-term goals to assist in its achievement.
Finance interdependence on Marketing - ANSWERIncreases market share using
increased promotions and improvements to product.
Finance depends on marketing to generate funds, and finance is in charge of allocating
the business' funds to marketing strategies such as Qantas' new lounges, check in
facilities and new carriers flying into China.
Finance interdependence on Operations - ANSWERIdentifying potential changes to
supplier to reduce costs. Operations also require funds such as to increase their budget
on capital expenditure from $2.5 billion in 2012 to $2.8 billion in 2013 for Qantas
Finance interdependence on HR - ANSWERHuman resources require funds to
remunerate staff as well as to fund effective human resource strategies such as training
and development, spending over $300 million a year on staff training for Qantas
Capital - ANSWEROwners contribute financial resources to a business when it is
established and throughout the business lifetime.
Drawings - ANSWERThe withdrawal of profits by the owner is recorded as drawings
under equity in the balance sheet.
Accounts Receivable - ANSWERMoney owed by customers (individuals or
corporations) to another entity in exchange for goods or services that have been
delivered or used, but not yet paid for.
Current Assets - ANSWERcash and other assets that are expected to be used, sold or
converted into cash within 12 months. These include cash in the bank, accounts
receivable, inventory and prepaid expenses.
Current Liabilities - ANSWERdebts that are due to be paid within 12 months. These
include accounts payable, bank overdrafts, short-term loans, interest payable on loans
and salaries payable.
Non-Current Assets - ANSWERassets that include amounts expected to be recovered
more than 12 months after the reporting period.
EXAM QUESTIONS AND ANSWERS 100%
ACCURATE!!
,Definition of Finance management - ANSWERthe planning and monitoring of a
business' financial resources to enable the business to achieve its financial objectives.
Strategic Roles of Financial Management - ANSWER- Sourcing finances
- preparing budgets and forecasting future finances
- maintaining sufficient cash flow
Strategic plan - ANSWERencompasses a long-term view of where the business is
going, how it will get there and a monitoring process to keep track of progress along the
way.
Objectives of Financial Management - ANSWER- profitability, growth, efficiency,
liquidity, solvency
- short-term and long-term
Objectives of Financial Management - Profitability - ANSWERthe ability of a business to
maximise its profits.
Strats to improve profitability - ANSWERTo ensure profit maximisation, financial
management must monitor revenue, pricing policies, costs, expenses and assets.
Objectives of Financial Management - Liquidity - ANSWERthe extent to which a
business can meet its financial obligations in the short term.
Strats to improve Liquidity - ANSWERBusinesses must have sufficient cash flow to
meet their financial obligations or be able to convert current assets into cash.
By controlling cash flow, financial managers will ensure they have adequate funds when
needed.
Objectives of Financial Management - Efficiency - ANSWERThe ability of the business
to minimise its costs and manage its assets so that maximum profit is achieved with the
lowest possible level of assets.
Strats to improve Efficiency - ANSWERAims to monitor levels of inventory , cash, and
the collection of receivables so that businesses are able to pay their debts when they
are due.
, Long Term Financial Objectives: - ANSWERDetermined for a set period of time, they
tend to be broad goals such as increasing profit or market share, and each will require a
series of short-term goals to assist in its achievement.
Finance interdependence on Marketing - ANSWERIncreases market share using
increased promotions and improvements to product.
Finance depends on marketing to generate funds, and finance is in charge of allocating
the business' funds to marketing strategies such as Qantas' new lounges, check in
facilities and new carriers flying into China.
Finance interdependence on Operations - ANSWERIdentifying potential changes to
supplier to reduce costs. Operations also require funds such as to increase their budget
on capital expenditure from $2.5 billion in 2012 to $2.8 billion in 2013 for Qantas
Finance interdependence on HR - ANSWERHuman resources require funds to
remunerate staff as well as to fund effective human resource strategies such as training
and development, spending over $300 million a year on staff training for Qantas
Capital - ANSWEROwners contribute financial resources to a business when it is
established and throughout the business lifetime.
Drawings - ANSWERThe withdrawal of profits by the owner is recorded as drawings
under equity in the balance sheet.
Accounts Receivable - ANSWERMoney owed by customers (individuals or
corporations) to another entity in exchange for goods or services that have been
delivered or used, but not yet paid for.
Current Assets - ANSWERcash and other assets that are expected to be used, sold or
converted into cash within 12 months. These include cash in the bank, accounts
receivable, inventory and prepaid expenses.
Current Liabilities - ANSWERdebts that are due to be paid within 12 months. These
include accounts payable, bank overdrafts, short-term loans, interest payable on loans
and salaries payable.
Non-Current Assets - ANSWERassets that include amounts expected to be recovered
more than 12 months after the reporting period.
