Chapter 36 - Finance And Accounting Strategy Flashcards
1
Q
Contents of an annual report
A
- Financial Statements
- Chairmans Statement
- Chief Executive’s Report
- Auditor’s Report
- Notes to the accounts
2
Q
Stakeholder - Manager
A
- Measure the performance of the business to compare against previous targets
- Help take strategic decisions
- Set budgets for the future
3
Q
Stakeholder - Banks
A
- Decide whether to lend money to businesses
- Assess to allow overdraft
- Decide to continue the overdraft facility
4
Q
Stakeholder - Suppliers
A
- See if the business is liquid enough to pay debts
- Assess whether the business is a good credit risk
- Demand early repayment
5
Q
Stakeholder - Customers
A
- Assess whether the business is secure
- Determine whether they can supply goods
- Security
6
Q
Stakeholder - Government and Tax Authorities
A
- Calculate how much tax is due
- Determine whether the business is likely to expand and create more jobs
- Assess whether the business might shut down
- Lawful enough
7
Q
Stakeholder - Shareholders ( Including Potentials )
A
- Assess the value of the business and their investment
- Business is profitable
- Determine what share of profit shareholders get
- Decide if the business has potential growth
- Compare performance with other competitors
- Sell or buy shares
8
Q
Stakeholder - Employees
A
- Assess whether the business is secure enough to pay wages and salaries
- Determine whether a business will grow or reduce in size
- Job security
- Wage increase can be afforded by the business
- Compare wages in an average of the industry
9
Q
Stakeholder - Local Community
A
- Business is profitable and good for the local community
- Business closure - loss of jobs
10
Q
Impact of ratios
A
- New Product Development
- Rationalisation
- Market Development
- Low price strategy
