Finance Content Chunk 4

Question 1

What falls under ‘Cash Flow Management’ in the Syllabus?

Answer 1

• Cash flow statements
• Distribution of payments, discount for early payments, factoring

Question 2

What falls under ‘Working Capital Management in the Syllabus?

Answer 2

• Control of Current Assets- Cash, receivables, inventories

Control of Current Liabilities- Payables, Loans, Overdrafts

Strategies- Leasing, Sale and Lease Back

Question 3

Why is Control of Current Assets and Liabilities Important?

Answer 3

Selecting the optimal amount of each current asset and minimises costs for current liabilities

Question 4

What is Sale and Lease Back?

Answer 4

Selling of an owned asset e.g. property to a lessor and leasing through fixed payments for specified period

Question 5

What falls under ‘Profitability Management’ in the Syllabus

Answer 5

• Cost controls- fixed and variable, cost centres and expense minimisation

Revenue controls- marketing objectives

Question 6

Define ‘Fixed’ and ‘Variable’ costs

Answer 6

• Fixed costs do not vary with output e.g. rent, interest and depreciation
• Variable costs do vary with output e.g. raw materials and direct labour

Question 7

Define ‘Cost Centres’

Answer 7

Department or section that generates costs that can be calculated and monitored.

Question 8

Define ‘Expense Minimisation’

Answer 8

Cutting costs in areas to minimise waste

Question 9

What falls under ‘Global Financial Management’ in the Syllabus?

Answer 9

• Exchange rates
• Interest rates
• Methods of international payment- payment in advance, letter of credit, clean payment, bill of exchange
• Hedging
• Derivatives