finance role

Question 1

what is finance?

Answer 1

financial management is the analysis, interpretation and evaluation of all financial records of a business

Question 2

what is a financial manager’s role

Answer 2

It is a financial manager’s responsibility to source finance that will enable the business to achieve its strategic goals.

Question 3

what is the broad strategic role of finance

Answer 3

To ensure a business can operate, grow, and achieve their goals through the management of financial resources.

Question 4

how can a financial strategic role be maintained (5)

Answer 4

• Set financial objectives
• Prepare budget/financial statements
• Maintain sufficient cash-flow
• Distribute funds to other KBF’s

Question 5

what are the 5 financial objectives?

Answer 5

• profitability
• growth
• efficiency
• liquidity
• solvency

Question 6

what is profitability and how is data collected?

Answer 6

Ability of a business to maximise their revenues and minimising costs

Gross profit , Net profit (income)

Question 7

what is growth and how is data collected?

Answer 7

Ability of a business to increase their size and value over the long term.

–> Ensures business is thinking sustainability in terms of future.

data : Market share and number of outlets

Question 8

what is efficiency and how is it collected?

Answer 8

Ability of a business to maximise the use of their assets in the most cost-effective way.

–> Maximises outputs whilst minimising inputs

Data : Expenses (income)

Question 9

what is liquidity and how is it collected?

Answer 9

Ability of a business to meet their short-term financial commitments (within twelve months)

-balance sheet

Question 10

what is solvency and how is it collected

Answer 10

Ability of a business to meet their long-term financial commitments (exceeds twelve months)

-balance sheet

Question 11

what r short term goals? what do they priortise?

Answer 11

Tactical ( 1-2 years) and operational (day-day) plans

often priortise efficiency and profit goals

Question 12

what r long term goals?

Answer 12

Relate to the strategic plans of a business. They’re built off short term goals.

are broad goals- e.g. - to increase profit or market share

Question 13

what r the three main aspects of a financial strategic role

Answer 13

• Investment
• Financing deals : deals with items on the right side of balance sheet, liabilities and owner’s equity
• Asset management deals

Question 14

External factors are responsible 4 making the strategic role of financial management more…. 3 d’s

Answer 14

dynamic, diverse and demanding

Question 15

what r external factors that impact financial management

Answer 15

• Increased Corporate regulation and governance responsibilities. Financial management must ensure all records are correct, truthful and in the public domain.
• Tax laws : complex set of tax rates and regulations, which could save the company expenses
• Technological changes
• Ethical concerns
• Globalisation

Question 16

whats a common issue that arises between short-long term goals as well as interdependence of kbfs

Answer 16

Conflicts can occur between short-term and long-term objectives e.g. Long-term maybe growth, which is costly, while a short-term goal may be to increase profits, and these contradict each other.

Question 17

how does finance and operation depend on one another

Answer 17

The finance department provides the funds to manage the production process such as
* Purchasing inputs

finance relies on operations to balance their costs to provide necassary quality and make investments in order to increase efficiency

Question 18

what does finance mainly rely upon other kbfs 4

Answer 18

efficiency n profitability

Question 19

how do marketting n finance rely upon one another

Answer 19

more effective promotion/marketting strats are, higher profits. budgets and forecasts must be established

marketting generates the revenue through promotion and sellling of products 2 consumers. it also provides the info of market research and profit forecast/info

Question 20

how does HR and finance rely upon one another

Answer 20

finance dep sets budgets as well as rewards scheme. the department sets aside funds 4 training of employees

HR manages employees, and provides ongoing rewards and incentives to enhance performance of employees