Finance Revision (Full Syllabus)

Question 1

What are the long term objectives and goals of a business called?

Answer 1

The strategic role

Question 2

What are the 5 financial objectives of a business?

Answer 2

Profitability, Growth, Efficiency, Liquidity and Solvency (PLEGS)

Question 3

What are the two types of objectives a business can have?

Answer 3

Short-term and long-term

Question 4

Define Interdependance

Answer 4

The way in which each of the four key business function relies on each other to operate.

Question 5

What is the first sub-heading of the finance syllabus

Answer 5

Roles of financial management

Question 6

What are the three topics of ‘financial roles’?

Answer 6

Strategic role, objectives and interdependence

Question 7

What is the second sub-heading of the finance syllabus?

Answer 7

Influences on financial management

Question 8

What are the three examples of internal sources of finance?

Answer 8

Retained profits, capital invested by owners and sales of unwanted assets

Question 9

What are the two types of external sources of finance?

Answer 9

Debt and equity

Question 10

When the business is lended money through an institution such as the bank it’s called…

Answer 10

Debt

Question 11

When the business is lended money in exchange through shareholders it’s called…

Answer 11

Equity

Question 12

Within debt finance, what are the two types of borrowing that can be applied?

Answer 12

Short-term & long-term borrowing

Question 13

What are the three of examples of short-term borrowing?

Answer 13

Overdraft, Commercial and factoring (COF)

Question 14

What are the four examples of long-term borrowing?

Answer 14

Mortgage, leasing, debentures and unsecured notes (DULM)

Question 15

What are the two sub-topics of equity finance?

Answer 15

Ordinary shares and private equity

Question 16

What are the four types of ordinary shares?

Answer 16

New issues, right issues, share purchase plans and placements

Question 17

What are the seven different financial institutions?

Answer 17

Banks, investment banks, financial companies, life insurance, Australian Securities Exchange, Unit trusts and superannuation funds.

Question 17

What are the global market influences?

Answer 17

Economic outlook, availability of funds and interest rates

Question 18

What are the influences of government?

Answer 18

Australian securities and investment commission, company taxation

Question 19

What is the third sub-heading of the finance syllabus?

Answer 19

Processes of financial managemnt

Question 20

What are the five parts of planning and implementing?

Answer 20

Financial needs, budgets, record systems, financial risks and financial controls

Question 21

What are two advantages of equity finance?

Question 22

What are two advantages of debt finance?

Question 23

What are two disadvantages of equity finance?

Question 24

What are two disadvantages of debt finace?

Question 25

What are the three financial statements?

Answer 25

Cash flow statement, income statement, balance sheet

Question 26

What are the four types of financial rations?

Answer 26

Liquidity, gearing, profitability and efficiency

Question 27

What is the ‘current ratio’ apart of?

Answer 27

Liquidity

Question 28

What is the ‘debt to equity ratio’ apart of?

Answer 28

Gearing

Question 29

What are the three profitability ratios?

Answer 29

Gross profit ratio, net profit ratio and return on total equity ratio

Question 30

What are the two efficiency ratios?

Answer 30

Expense ratio and accounts receivable turnover ratio

Question 31

What two ratios are expressed as ratios?

Answer 31

Current ratio and debt to equity ratio

Question 32

What ratios are expressed as percentages?

Answer 32

Profitability and efficiency