Finance Revision (Full Syllabus) Flashcards
What are the long term objectives and goals of a business called?
The strategic role
What are the 5 financial objectives of a business?
Profitability, Growth, Efficiency, Liquidity and Solvency (PLEGS)
What are the two types of objectives a business can have?
Short-term and long-term
Define Interdependance
The way in which each of the four key business function relies on each other to operate.
What is the first sub-heading of the finance syllabus
Roles of financial management
What are the three topics of ‘financial roles’?
Strategic role, objectives and interdependence
What is the second sub-heading of the finance syllabus?
Influences on financial management
What are the three examples of internal sources of finance?
Retained profits, capital invested by owners and sales of unwanted assets
What are the two types of external sources of finance?
Debt and equity
When the business is lended money through an institution such as the bank it’s called…
Debt
When the business is lended money in exchange through shareholders it’s called…
Equity
Within debt finance, what are the two types of borrowing that can be applied?
Short-term & long-term borrowing
What are the three of examples of short-term borrowing?
Overdraft, Commercial and factoring (COF)
What are the four examples of long-term borrowing?
Mortgage, leasing, debentures and unsecured notes (DULM)
What are the two sub-topics of equity finance?
Ordinary shares and private equity
What are the four types of ordinary shares?
New issues, right issues, share purchase plans and placements
What are the seven different financial institutions?
Banks, investment banks, financial companies, life insurance, Australian Securities Exchange, Unit trusts and superannuation funds.
What are the global market influences?
Economic outlook, availability of funds and interest rates
What are the influences of government?
Australian securities and investment commission, company taxation
What is the third sub-heading of the finance syllabus?
Processes of financial managemnt
What are the five parts of planning and implementing?
Financial needs, budgets, record systems, financial risks and financial controls
What are two advantages of equity finance?
What are two advantages of debt finance?
What are two disadvantages of equity finance?
