Finance Flashcards
(Financial management
What is finance?
Finance is the planning and monitoring of a business financial resources to enable the business to achieve its financial objectives
What is the strategic role of finance?
To ensure that a business achieves its goals and objectives
What is financial management?
It’s the organisation/control of cash inflow and outflow, the assets and liabilities of the business.
What is the acronym for objectives of financial management?
PEGLS
What is profitability
The ability of a business to maximise profits and satisfy the needs of stakeholders
What is efficiency
The ability to minimise costs and manage assets in order to maximise profits
What is growth
The abilty of the business to increase in size over time
What is liquidity (remember lower)
The ability to meet financial commitments in the short term (under 12 months)
What is solvency
The ability to meet financial commitments in the longer term (over 12 months)
How long are short term financial objectives?
They are operational (day-to-day) plans and tactical (1-2 years)
How long are long term financial objectives?
They are strategic (2 years+)
Done
Done
