Higher BM - Finance

The Finance Department are responsible for:

• Ensuring all employees are working effectively across all areas.

• Ensuring that funds are available for the organisation to achieve it's objectives.

• Supporting the business to market their products and services effectively.

• Generating financial information for support decision making.

• Monitoring the levels of service that the organisation is delivering.

The finance department will complete various functions, such as:

• Creating job adverts for new vacancies in the organisation.

• Prepare budgets for departments to use.

• Dismiss staff if they do not stick to agreed budgets.

• Pay the salaries and wages of the employees.

• Work with the managers to increase the reputation of the business.

The source of finance that a business will use depends upon:

• The size of the business

• The sector they operate in

• How much money the competitors have

• The weather

• The town they operate in

Retained Profits is an example of:

• Internal Finance

• External Finance

• Unsensible Finance

• Long-Term Finance

The quickest source of finance available to a business is:

• Retained Profits

• Mortgage

• Bank Loan

• Sale of Assets

Short-term finance includes:

• Bank Overdraft

• Trade Credit

• Debt Factoring

• Mortgage

• Bank Load

A bank loan can be a useful source of finance, because:

• It allows the business to plan better

• It is paid back with interest

• The payments are usually a fixed amount

When using Hire Purchase, the business does not own the item...

• True

• False

Venture Capitalists can help a business if:

• They want a low interest loan

• Their credit rating is low

• They are a multinational

• They operate in the public sector

Sole traders, when just starting up, are usually financed by:

• Share issue

• Mortgage

• The owners savings

• Hire purchase