2. Understanding financial objectives

Question 1

Cash flow targets

Answer 1

A financial objective focused on maintaining a healthy cash balance.

Question 2

Cost minimisation

Answer 2

The process by which businesses attempt to maximise profits by keeping costs low.

Question 3

ROCE targets

Answer 3

The minimum percentage return a business strives to achieve from the capital employed in business activities

Question 4

Shareholders return

Answer 4

The financial rewards to a shareholder in return for their investment; includes dividends paid or increased share value.

Question 5

Satisficing

Answer 5

Aiming to achieve a satisfactory level of profit.

Question 6

Executive director

Answer 6

A member of the board of directors who also holds a position of responsibility in the business on a day to day basis. (EG Marketing director, or Finance director)

Question 7

Non-executive directors

Answer 7

A member of the board of directors who does not work for the business on a day to day basis but sits on the board in an advisory on consultative role.