5. Selecting financial strategies

Question 1

Financial Strategy

Answer 1

The long term financial plan of action to achieve the financial objectives of the business

Question 2

Sources of finance

Answer 2

The range of options available to firms to fund business operations including banks, venture capitalist and share capital.

Question 3

Rights issue

Answer 3

Selling new issues of shares to existing shareholders in a company so that their control over the business is not changed.

Question 4

Profit centres

Answer 4

A section of a business for which costs and revenues, and therefore profit can be identified.

Question 5

Capital expenditure

Answer 5

The purchase of assets that will remain in the business in the medium to long run, accounted for in the balance sheet.