3.5 1 Setting Financial Objectives

Question 1

What are financial objectives

Answer 1

The specific goals set in relation to the management of an organisations monetary resources that will enable a company to achieve its corporate objectives.

Question 2

The value of financial objectives

Answer 2

• Well set financial objectives contribute to the achievement of corporate objectives
• Sets clear budgets, allowing for decisions to be made about resource allocation (allows managers to know what constraints they’re operation with - easier to make decisions)
• Creates clarity and purpose
• Allows success to be measured and reviewed
• Enables the business to secure external finance e.g bank loans/investments