Unit 5 Ch16 - Financial Objectives Part 1 (A)

What is the first stage in the financial decision making process?

• Set financial objectives

• Analyse financials

• Make financial decision

• Implement financial decision

• Review

Fill in the blank. A financial objective is a _______ or target pursued by the finance department (or function) within an organisation.

• Goal

• Revenue

• Profit

• Cost

• Cash flow

True or False. Objectives are short-term goals established to coordinate the business.

• False

• True

True or false. Financial objectives need to consistent with other functional objectives and align to the overall corporate objectives.

• True

• False

Select all the benefits of setting financial objectives:

• Help to attract finance (e.g. loans from bank)

• Reduce the risk of business failure

• Provide transparency for shareholders about their investments

• Precisely meet customer needs

• Deliver on time

Select all of the financial objectives:

• Revenue, cost, and profit

• Cash flow

• Investment

• Capital structure

• Interest rates

For a single product, what is the formula for Revenue

• Price/Quantity

• Price x Quantity

• Price + Quantity

• Price - Quantity

• Quantity/Price

Select all the ways that a revenue objective can be expressed:

• A set amount

• Percentage increase

• Percentage of market share

• Profit margin

• None of the answers

True or False: Revenue objectives may be used by businesses seeking to build a customer base and establish themselves in a chosen market.

• True

• False

If a product is price elastic, how would you increase revenue?

• Decrease price

• Increase price

• Keep price the same

• None of the answers