Role of Financial Management Yr 12 Business Studies

Financial management refers to:

• planning, organising and monitoring of financial resources

• planning, monitoring and controlling financial resources

• planning, organising and controlling financial resources

• organising, monitoring and controlling financial resources

The strategic role of financial management is to:

• provide financial resources to implement strategic plan

• provide guidelines to implement the strategic plan

• outline the financial plans of the business

• provide a system of recording financial statements

Which of the following is NOT and objective of financial management?

• Liquidity

• Solvency

• Growth

• Expenses

Profitability refers to:

• how much money is made on selling your products

• the ability to make a financial return from business activities

• the main driving purpose for running a business

• the return on capital and growth in sales

Growth in a business can be generated by:

• an increase of competitors in the market

• advances in technology and access to resources

• an increase in size and value of a business

• opportunities to expand globally

Efficiency is generated by:

• maximising returns for minimal costs

• increasing the number of inputs and outputs

• lowering costs of production

• increasing competitiveness in the market

Liquidity refers to:

• how much money a business has available in the bank

• the level of current liabilities compared to current assets

• the ease with which an asset can be converted into cash

• the amount of short-term assets a business has

Solvency refers to:

• the level of cash-flow in a business

• the extent to which the current assets of a business exceed current liabilities

• the extent to which current liabilities of a business exceed current assets

• short-term financial goals of a business

Short-term financial objectives are:

• concerned with growing the business

• concerned with increasing profitability

• concerned with increasing efficiency

• concerned with managing cash flow and meeting current debts

Long-term financial objectives are:

• concerned with meeting current debts of the business

• concerned with growing the business

• concerned with increasing capital investment

• concerned with meeting shareholder expectations