HSC Financial Management Strategies

What are cash inflows the result of?

• Payments to suppliers and interest earned on investments

• Receipt of dividends and the business’s loan repayments

• Payments of dividends and issues of shares

• Cash sales and the collection of accounts receivable

Which of the following are examples of variable costs?

• Leases, rent and salaries

• Leases, rent and wages

• Rent, telephone and electricity

• Inputs, raw materials and casual

  wages

What are cost centres used to determine?

• Which costs in the business are the highest

• The contribution to total costs of different sections of a business

• Which products bring in the most revenue

• Which machinery needs replacing

What value can be used to determine the liquidity of a business?

• The amount of cash held by the business

• The working capital or current ratio

• The value of all assets held by a

  business

• The value of all liabilities of a

  business

Which asset would take the longest to become liquid?

• Cash

• Debtors

• Work in Progress

• Non-current assets

Which of the following is an inventory management system?

• Barcodes

• ASIC

• ATO

• JIT

In Business Studies, accounts receivable is referred to by another term. What is this term?

• Suppliers

• Prepaid expenses

• Creditors

• Debtors

It has been recommended to Reginald that he use factoring. Which of the following best explains what factoring is?

• The selling of a business’s current debtors to a specialist debt collecting firm

• The selling of a business’s current liabilities to a specialist debt collecting firm

• A business reducing its total liabilities

• A business increasing its total assets

What is the most appropriate strategy for a financial manager to use for debt finance?

• Obtain short-term loans instead of

  long-term loans

• Ensure that debt is only used to

  purchase non-current assets

• Organise the repayment of loans

  over as many years as possible

• Shop around for the lowest interest

  rates and most suitable repayment

  terms for the business

Why do currency fluctuations represent a financial risk to business?

• Interest rates can increase without warning.

• Conversion from one currency to another can result in lower revenue and higher expenses.

• International banks impose transaction fees.

• Tourists will require more spending money.