Role

Question 1

Strategic role of finance (4 things)

Answer 1

maintain and report financial information
forecast future finances
distribute funds to different parts
source funds

Question 2

Short term role

Answer 2

SHORT: release funds when needed, ensure laws are followed, manage transactions

Question 3

long term role

Answer 3

LONG: maintain low levels of debt, allow growth and leave option open for owners

Question 4

Short and long term financial objectives

Answer 4

SHORT: liquidity, solvency
LONG: efficiency, profitability, growth

Question 5

Efficiency

Answer 5

minimising costs and maximising profit in order to use its resources efficiently

Question 6

solvency

Answer 6

the extent to which a business can meet its long term (more than 12 months) commitments/debts.

Question 7

profitability

Answer 7

the ability for a business to maximise profits

Question 8

growth

Answer 8

ability of a business to increase its size in the long term: using its asset structure to increase sales, profit and market share

Question 9

liquidity

Answer 9

the extent to which a business can meet its financial commitments/debts in the short term (less than 12 months)